Markets shook off some very temporary weakness early on and went out on highs for the session. The Nasdaq rose .6% and the S&P by .2%. Going into Friday the Nasdaq is higher by .3% and the S&P 500 by .6%. There seems to be an abundance of “this is going to end badly” chatter and indeed it may, but until those chorus calls simmer down it is probably unlikely to happen. New 52 week highs versus 52 week lows are beginning to narrow which could potentially be a concern. On Wednesday new 52 week lows actually outnumbered new highs by a 50 to 52 margin. The NYSE barely kept its head above water with a tally of 63 new highs versus 52 new lows. The lagging energy group was the best sector performer gaining 1.1%. But some other groups are starting to gather momentum, namely the retail and homebuilding names. WSM gapped up 8.3% after reporting earnings, suggesting that the prior quarters 12% loss on 8/28 was a one off event. After all the stock was as consistent as they get. The 3 previous reports were gains of 8.2, 9.8 and 7.6% on 5/22, 3/13 and 11/21/13. RH is looking strong as it approaches the important round 90 handle. It is attempting to record its second straight robust weekly gain, higher this week by 5.7% and last weeks 6.6% advance. Others flexing there muscles after recent earnings reports are WMT TGT DLTR KIRK. Remember the consumers spending habits make up 2/3rds of GDP, so this could be evidence of a recovery gaining steam.

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