Markets registered small losses Thursday as the S&P 500’s 7 day winning streak was halted falling .3%. It still remains above its 50 day SMA and volume was lethargic. Going into Friday the index is up 1.7% for the week. The Nasdaq fell .2% and is currently up 1.5% for the week. As we have recently spoke of sector rotation creating better health for the markets, some are putting forth question marks. Retail has been mixed in regards to same store sales, but some recent earnings reports from some companies suggest the consumer is not as vibrant as hoped. We pointed out our concern awhile back when former leaders GPS M were beginning to look fragile from a technical standpoint. And when the generals start to fade, you can bet the entire group will most likely feel the pain. Such names having difficulty keeping pace include LULU RH URBN PVH RL. These companies were former generals like GPS M and their rank has been demoted. It is no wonder GDP growth has been anemic, as the consumer accounts for 2/3rds of GDP. Is this bifurcation from other healthier groups a “canary in the coal mine” scenario? Looks that way so far. The transports are trying to step up and deliver, pun intended, their prior winning ways. The IYT has shown good accumulation since late August and technically may be trying to put a handle on its double bottom base. Volume within the handle has been quiet and cooperative so far. Give it a three more days to form. Its being sent regular mail not overnight delivery.
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