Markets put in a rather listless session Wednesday, until the last half hour, as the Nasdaq “outperformed” down .1%, while the Dow, S&P 500 and Russell 2000 dropped between .3-.5%. The Nasdaq that I like to key on has started to become very taut in regards to its trade. Today marked the eight consecutive day without a gain or loss of more than 1%. Could one use the “don’t sell a dull market” phrase with that action? Probably not after todays bearish shooting star at all time highs, but one has to come away impressed how it is holding up near former higher and not backing up much. Now of course it is good to stall a bit or base, but one does not want to see to much time pass without another leg higher. A tell perhaps as to “risk on” coming back would be the JNK quietly continuing its 8 day winning streak (today was UNCH registering a doji candle).
Looking at individual sectors it felt soft as just one of the major S&P sectors was able to gain ground Wednesday. Leading were the cyclicals and healthcare adding .2 and UNCH respectively. The XLY is acting well POST breakout, exactly what you want to see, from a 109.44 cup base trigger taken out on 6/7 and is now on a current 9 session winning streak. Of course the ETF benefits from a healthy AMZN which makes up nearly 22% of the fund. The XLV is approaching a bullish ascending triangle trigger of 86 and a break above there will carry a measured move to 93. Lagging Wednesday were the industrials and materials with the XLI and XLB falling .8 and 1.1%. One could make the case for a bullish inverse head and shoulders pattern on the XLI and a move through the 77 area carries a measured move to 84.
I am a big fan of the round number theory. Stocks, or other instruments, tend to stall there or find support. Of course it is not foolproof but the theory is viable. Below is the chart of ROKU and how it appeared in our Tuesday Game Plan this week. The entry was NOT hit, but it does demonstrate how names will find both support and resistance the round numbers. ROKU found support at the 30 number on 4/3 with a bullish engulfing candle which happened to fill in a gap from the 11/9/17 session and also successfully retested a prior cup base breakout trigger of 29.90 originally taken out on 11/9/17 too. It did stall a bit at the 40 figure recently which happened to be good support back in January-February as well. The stock is higher by nearly 11% this week on above average volume already with still two days to go this week.