Markets did something unusual for the very short term, as they started strong Thursday and one was most likely thinking it would not hold and what did it do? As usual they confounded the most. I have to admit I came away impressed as I thought we would see some softness into the close and there was none of it. Bears had to come away from today scratching their heads. I have been keying most of my positive sentiment on the bull flag breakout of the Russell 2000 which in all frankness never really materialized. It did retest its cup base breakout just above the 1450 number and has not done much wrong and today recaptured its 50 day SMA which is still sloping upwardly firmly even with its recent selloff. The small cap benchmark rose 1.6% Thursday and perhaps most impressive was its shrugging off the financial weakness today as they are a very large weighting in the index.
Looking at individual sectors it was an interesting pair at the top of the performance tables with technology and staples stepping out. The XLK rose by 1.4% certainly helped by some “old tech” plays as CSCO and NTAP both impressed with positive earnings reactions of 5.2 and 15.9% respectively. The old dogs can still teach some of the new pups some tricks as one just needs to take a quick peak at the charts of VMW, RHT, ADBE or INTC just to name a few. The XLK has the look of a nice short flag that began near the 60 number and a move through 64 would be a breakout, and one must admire the taut action it has displayed as the last 2 weeks have both CLOSED within just one penny of each other. Lagging on a strong session today, and to be taken seriously were the energy, utilities and financials. I had made a call recently thinking energy travails were behind it and clearly I look WRONG. Utilities were lower as well by .3% after Wednesday dark cloud cover candle. Stay tuned.
Retail names have been showing some resilience recently, of course there will always be winners and losers but names that reported this morning that witnessed very energetic moves were RH which screamed higher by 25.9% and is now near all time highs made in November ’15 which would be a cup base, but the depth of the base has me uninterested as there are better names to play. WMT had an extraordinary session advancing 10.9% trading at all time highs and just below the very round par number, and is almost assured of a 7th weekly gain in a row tomorrow. BBY and LB both finished lower, but recorded nice reversals intraday, finding support at their 200 day SMAs. Below is the chart of NKE and how it appeared in our Thursday 11/9 Game Plan. The last 3 weeks have digested the 9.5% jump the weeks ending 10/20-27 and broke above a nice bull flag pattern which did find support at its 200 day SMA. It looks poised to travel to the round 60 number which has been resistance the week ending 8/26/16 and again the 6/30-8/17. First it will have to power above an upside gap from the 8/17 session. Will it just do it?