Markets:
There were many who were uncertain if the premarket strength would hold, and the Dow fended off not one but two intraday declines of 100 handles and one has to come away impressed with the action. It still CLOSED right at its 200 day SMA, and caution is the word of the day for the price weighted index. Keep in mind two of its three largest priced names in the index are in bear market mode with MMM and GS lower by 24 and 20% respectively from their most recent 52 week highs.
The Nasdaq is having a run for its money on a YTD basis, where a once comfortable margin over the Russell 2000 is narrowing. The gap now stands at less than 1% with the Nasdaq up 9.9% compared with the Russell 200o up 9.3% thus far in 2018. The Russell 2000 was the only major benchmark to advance on Tuesday and is now higher 4 of the last 5 sessions after a nice bounce off its rising 50 day SMA following a break above a symmetrical triangle above 1590 in early May.
The VIX is at a critical juncture here as it tests not only a break above a bullish falling wedge from 6/25, but also finding support at both its 5o and 200 day SMAs. It still must be given the benefit of the doubt after breaking above those two aforementioned moving averages as it resided below them for the prior 3 months. Another risk gauge is the junk bond ETF JNK and for all the hoopla it is still making higher lows since the February correction, although it still trades underneath both its 50 and 200 day SMAs.
Sectors:
Technology delivered a long overdue jump Thursday offering fireworks a day after the Fourth, and the bounce was courtesy of a strong semiconductor space. The XLK added 1.4% and a push through 71 would negate a short bearish head and shoulders pattern that began the second week if May. The SMH CLOSED back above its 200 day SMA, after bobbed above and below it similar to the late April episode. Notice the ETF did not make a higher high and it still sits 10% off most recent 52 week highs and trades bearishly wide and loose.
Creating an odd one two punch was the consumer staples that also rose by 1.4%. The XLP is bottoming the “correct way”, slowly and steadily, as the ETF recorded plenty of bullish candles in May (dojis and spinning tops) that suggested the downtrend was losing steam. Respect the last 3 weekly CLOSES have been very taut all within just .10 of each other. The largest component PG, is looking for an eight weekly gain in the last 9 and is fast approaching the round 80 number which was resistance, which was support several months throughout 2016. Bulls do NOT want to see former support become pesky resistance.
Special Situations:
Healthcare has been a group in play and there has been a bit of relative strength in the biotech space with the XBI just 4% off its most recent 52 week highs (XLV is 8% off its and is currently in a cup with handle pattern with a potential buy point above a 85.82 trigger). There has been breathtaking moves within the group with SRPT, most recently witnessed with 37% move on 6/19 after positive data was released. Another stock in the arena which looks promising is RGEN and below is how it appeared in our Thursday 6/28 Game Plan. It is looking for a NINTH consecutive weekly advance, up another 2.9% this week headed into Friday. Notice the last seven have inched higher in a gradual fashion with none of the weeks gaining more than 2.4% following a thrust higher of 13.8% the week ending 5/11. It is now above a year long cup base trigger of 46.91 and the adage goes the longer the base the greater the space following the breakout. Stay tuned.
Markets:
There were many who were uncertain if the premarket strength would hold, and the Dow fended off not one but two intraday declines of 100 handles and one has to come away impressed with the action. It still CLOSED right at its 200 day SMA, and caution is the word of the day for the price weighted index. Keep in mind two of its three largest priced names in the index are in bear market mode with MMM and GS lower by 24 and 20% respectively from their most recent 52 week highs.
The Nasdaq is having a run for its money on a YTD basis, where a once comfortable margin over the Russell 2000 is narrowing. The gap now stands at less than 1% with the Nasdaq up 9.9% compared with the Russell 200o up 9.3% thus far in 2018. The Russell 2000 was the only major benchmark to advance on Tuesday and is now higher 4 of the last 5 sessions after a nice bounce off its rising 50 day SMA following a break above a symmetrical triangle above 1590 in early May.
The VIX is at a critical juncture here as it tests not only a break above a bullish falling wedge from 6/25, but also finding support at both its 5o and 200 day SMAs. It still must be given the benefit of the doubt after breaking above those two aforementioned moving averages as it resided below them for the prior 3 months. Another risk gauge is the junk bond ETF JNK and for all the hoopla it is still making higher lows since the February correction, although it still trades underneath both its 50 and 200 day SMAs.
Sectors:
Technology delivered a long overdue jump Thursday offering fireworks a day after the Fourth, and the bounce was courtesy of a strong semiconductor space. The XLK added 1.4% and a push through 71 would negate a short bearish head and shoulders pattern that began the second week if May. The SMH CLOSED back above its 200 day SMA, after bobbed above and below it similar to the late April episode. Notice the ETF did not make a higher high and it still sits 10% off most recent 52 week highs and trades bearishly wide and loose.
Creating an odd one two punch was the consumer staples that also rose by 1.4%. The XLP is bottoming the “correct way”, slowly and steadily, as the ETF recorded plenty of bullish candles in May (dojis and spinning tops) that suggested the downtrend was losing steam. Respect the last 3 weekly CLOSES have been very taut all within just .10 of each other. The largest component PG, is looking for an eight weekly gain in the last 9 and is fast approaching the round 80 number which was resistance, which was support several months throughout 2016. Bulls do NOT want to see former support become pesky resistance.
Special Situations:
Healthcare has been a group in play and there has been a bit of relative strength in the biotech space with the XBI just 4% off its most recent 52 week highs (XLV is 8% off its and is currently in a cup with handle pattern with a potential buy point above a 85.82 trigger). There has been breathtaking moves within the group with SRPT, most recently witnessed with 37% move on 6/19 after positive data was released. Another stock in the arena which looks promising is RGEN and below is how it appeared in our Thursday 6/28 Game Plan. It is looking for a NINTH consecutive weekly advance, up another 2.9% this week headed into Friday. Notice the last seven have inched higher in a gradual fashion with none of the weeks gaining more than 2.4% following a thrust higher of 13.8% the week ending 5/11. It is now above a year long cup base trigger of 46.91 and the adage goes the longer the base the greater the space following the breakout. Stay tuned.