Markets have been firing on all cylinders recently and Wednesday was no exception. The Nasdaq is now in a series of higher highs and lows since January and although it did sit out somewhat today it is on a 4 session winning streak, even with INTC AAPL and MSFT lower on the day early on before eking out mild gains. The Dow showed force higher by 1.4%, the best acting of the big four, courtesy of BA its largest priced component with the second best performance of the 30 stocks. The Russell 2000 now higher 17 of the last 23 days rose .7% and the S&P 500 added .9%. The VIX is now on a 4 day losing streak and looking to CLOSE in the lower half of its weekly range for a sixth consecutive week. Retail looks solid as the XRT approaches a cup base trigger of 49.19. Surely this benefits the XLY, but some real strength is being seen in the automobiles in the discretionary space. TSLA GM and even F have been driving higher.
Looking at individual groups Wednesday it was satisfying for the bulls to see the financials acting as the best performer. The XLF advanced 1.9%, just outdoing its nearest competitor as the materials, via the XLB, which put up a second straight nice showing up 1.85%. And for the second consecutive day the staples and utilities wavered as the XLP and XLU were UNCH and down 2.4%. The XLU seems to be losing its battle with the very round 50 number and the ETF is lower by 15% off its most recent 52 week highs and has declined 4 of the last 5 weeks and this one by 3.5% so far. If that holds it would be its worst showing in almost 7 months. The XLV cleared the 84 level today which it has had trouble with the last 6 weeks and remember this ETF has been wound real tightly as the last 4 weeks all CLOSED within just .42 of each other.
The knock on the markets recently has been the lack of participation of the financials. Of course when the mainstream media talks about this they mean the big money center banks. Wednesday the XLF reclaimed its 200 day SMA and registered its third 1% plus gain in the last 6 sessions. We always mention how broad and diverse groups are and the finnies are one of the largest, and below is the chart of a business service play and how it appeared in our Tuesday 5/6 Game Plan. The stock is nearly 3 years old and for the last month had issues with the round 70 number until breaking above Tuesday. It acted well after breaking above a 61.52 cup base trigger, we know the best breakouts work right away, and now its measured move after trading above the flag is to 76. Never have been a fan of measured moves though as they could be selling too soon and leaving potential big gains on the table.