Markets were challenged this week by the bears, but they came out for the most part unscathed. For the third consecutive week the Nasdaq outperformed the S&P 500 and Dow, as if fell .2% and the S&P 500 lost .21% so it was by the slimmest of margins, and it rose for a NINTH consecutive Friday, albeit fractionally. The Dow lost .5% but has now completed a 3 week tight pattern as the last three have all CLOSED within just 113 handles of each other. For all the noise the Nasdaq ended the day at or very near the top of its daily range 4 out of 5 days, a bullish trait. The wall of worry is becoming a bit more uneasy as the Russell 2000 which is often a leading indicator was the outlier for the week dropping 1.3%, falling in tandem with financials which are heavily weighted in the benchmark. Its upward sloping 50 day SMA was tested Wednesday-Friday this week and held firm, for now. The JNK lost .9% for the week, and is now on a 3 week losing streak, in the largest weekly volume since the week ending 7/1/16. Good news is that 4 week losing streaks are rare. The caveat being the last time a 4 week slump occurred between the weeks ending 10/30-11/20/15 it went on to drop 8 of the next 12 weeks.

Looking at individual sectors it was the staples that put up the best showing with the XLP higher by 1%, registering its third such gain in the last 4 days. On a weekly basis it rose 2.1% tying its best weekly gain thus far in 2017 with the weeks ending 1/20 and 5/26, and it was easily the best weekly performer too. That leadership could be questionable but the ETF is right at 200 day SMA resistance and the fund did record a death cross earlier in the month. Other noteworthy weekly moves among the major S&P sectors were the financials slipping 2.6% the worst actor. The XLU rose .5% and is on a 6 week winning streak and with the staples strength the flavor was risk off. A group that should be watched closely is the industrials which are quietly losing ground as the XLI is now on a 3 week losing streak losing 2.7% although volume has been tame and it could just be gently retesting the cup base breakout trigger of 69.68 taken out on 9/18.

We all know just how powerful the recent overall tech surge has been, most notably with the semiconductors. Other groups that deserve just as much credit are the homebuilders. The ITB for one is at 10 year highs, gaining 10 of the last 11 weeks and CLOSING above the round 40 number this week, but still attempting to negate the bearish engulfing candle from the 11/2 session. It certainly pays to look deeper when you have robust moves with the pure plays and below is an example of a periphery play and the chart how it was profiled in our Tuesday 10/24 Game Plan. It CLOSED above the 63.25 bull flag trigger on 10/27 and after reporting earnings this Wednesday recorded an admirable bounce almost precisely off the round 60 number and the last 3 days of this week surged more than 11%.

Stocks that can be bought as they take out bull flag formations are BIG. BIG is a retail leader higher by 7% YTD and 23% over last one year period and sports a dividend yield of 1.9%. Earnings have been mostly higher with three consecutive positive reactions gaining 2.9, 3.8 and 1.2% on 5/26, 3/3 and 12/2/16 before a most recent loss of 1% on 8/25. The stock is higher 3 of the last 6 weeks with all 6 trading within the week ending 9/29 which scored a 8.2% advance. Look to enter BIG with a buy stop above a bull flag trigger of 54 which carries a measured move to 61. One can add to above a cup base trigger of 56.64 in a pattern nearly a year long that began the week ending 12/23/16.

Trigger BIG 54.  Stop 52.10.

Stocks that can be bought after recent bullish engulfing candles are TDC. TDC is a technology play higher by 30% YTD and 34% over the last one year period. Earnings have been mostly higher and energetic with gains of 11.3, 8.5 and 8.5% on 11/2, 7/27 and 2/9 and a loss of 8.2% on 4/27. The stock registered a bullish inside week losing 2% this week after a robust combined advance of 10.7% the 2 weeks ending 10/27-11/3. It recently broke above a bullish inverse head and shoulder formation near 33 in a pattern that began the week ending 9/2/16. TDC recorded a bullish engulfing candle on 11/8, coming close to filling in a gap from the 11/1 session and enter at 34.75.

Trigger TDC 34.75.  Stop 33.

Stocks that can be bought as they pullback into recent cup base breakouts are RRR SU. RRR is a casino/gaming play higher by 14% YTD and 22% over the last one year period and sports a dividend yield of 1.5%. Its most recent earnings reaction was its first gain in its last 5 rising by 7.1% on 11/8 and the prior four all lost 3.6, .1, 3.4 and .5% on 8/9, 5/5, 3/8 and 11/8/16. The stock is higher 5 of the last 6 weeks and this week surged by 7.2%, its second best weekly return since coming public in April '16 and volume was very cooperative too. RRR broke above a cup base trigger of 25.04 on 11/8 and enter on a pullback into move at 26.

Trigger RRR 26.  Stop 24.60.

SU is a best in breed energy play from our neighbor to the North higher by 11% YTD and 25% over the last one year period and sports a dividend yield of 2.8%. Earnings have been very well received with FIVE consecutive positive reactions advancing 1.9, 1.7, .2, 2.7 and 5.6% on 10/26, 8/2, 4/27, 2/9 and 10/27/16. The stock is on a 3 week winning streak which rose by a combined 9% and broke above a long bullish inverse head and shoulders formation trigger of 34 the week ending 9/15/17 (the pattern began the week ending 11/28/14 and the head was created between weeks ending 4/24/15 and 12/16/16). SU is on a current 12 session winning streak and broke above a cup base trigger of 35.28 on 11/6 and enter on a pullback at 36.

Trigger SU 35.90.  Stop 34.

Stocks that can be bought as they fill in gaps are COF. COF is a finnie play UNCH YTD and 10% over the last one year period and sports a dividend yield of 1.8%. It has nice earnings momentum with back to back gains of 1.4 and 8.5% on 10/25 and 7/21 after losses of 2.9 and .4% on 4/26 and 1/25. The stock is higher 6 of the last 9 weeks, but did fall 4.9% this week and is back near a breakout from a cup with handle breakout trigger of 88.09 trigger on 10/20. It was unable to break above a flag pattern that began with nice support at 200 day SMA on 10/13, and a good example to wait for PRICE confirmation. Buy COF here with gap fill from 10/19 session.

Trigger COF here.  Stop 84.

Stocks that can be thought of as shorting opportunities are RDFN. RDFN is a recent real estate related IPO lower by 4% since inception in late July and now 38% off most recent 52 week highs. Earnings in short supply but only two instances fell by 5 and 9.8% on 9/8 and 11/10. The stock is lower 6 of last 7 weeks beginning with bearish engulfing week ending 9/29 that fell 10.3%. It registered bearish reversals on 8/3, 8/16, 9/25 and 10/18 lost 12.4, 4.9, 7 and 3.4% in active volume forming top line in descending triangle. Enter RDFN as a short with a sell stop below very round 20 number at 19.75 which carries a measured move to 7.

Trigger RDFN 19.75.  Buy stop 21.20.

Good luck.

The author is flat.

Trigger summaries:

Buy stop above bull flag pattern BIG 54.  Stop 52.10.

Buy after recent bullish engulfing candle TDC 34.75.  Stop 33.

Buy pullback into recent cup base breakout RRR 26.  Stop 24.60.

Buy pullback into recent cup base breakout SU 35.90.  Stop 34.

Buy after recent gap fill COF here.  Stop 84.

Sell stop to short below bearish descending triangle RDFN 19.75.  Buy stop 21.20.

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