Markets ended a bumpy week Friday with gains achieved on mediocre volume, compared to the heavy trade downfalls Wednesday and Thursday. The Nasdaq lost 1% on the week, but seemed to find support at its 50 day SMA Thursday. The S&P 500 continues to defend the round 1500 handle for now. I flattened out on Thursday, and perhaps I am wrong, but I am seeing worrisome signs. The building group’s decent persists, as the XHB lost 4% on the week. Top holding LL’s 6% drop on earnings Thursday certainly contributed. The composition of the ETF itself is interesting as only 2 home builders, DHI SPF, reside inside the top 10 holdings. Are agriculture stocks forecasting the benchmarks may go on a diet, pun intended? Former stalwarts in the group CF AGU MOS all lost between 5-8% on the week, and their weakness on a decent tape Friday should be taken note of. I am starting to see an interesting divergence technically in the transport group, which has been bifurcating somewhat. Perhaps some fundamental followers I have could offer a reason as to why, the rails themselves in the last 3 weeks are vastly outperforming their trucking counterparts. Looking at 3 week returns shows KSU up 5%, CP 2%, UNP 1.5%, while CHRW is down 11%, ODFL EXPD both lower by 6% over the same time period. I am assuming it is this rise in energy prices, as rails run hundreds of miles on a single gallon of fuel. Some breakouts were recorded Friday as INFY took out a 53.47 flat base trigger, IP a 43.00 4 week tight trigger, and TAP consuming a 45.86 cup with handle pivot.
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