Markets were sluggish Thursday and that could be a good sign. We all know the old adage to never sell a dull market. Looking back at the month of April so far neither the Nasdaq or S&P 500 have been higher or lower by more than 1%. As we spoke of yesterday about the slim possibility that we are forming a long term top on the Nasdaq, tops tend to be very volatile and the docile moves recently suggest markets are catching their breath to regain some stamina. Benchmarks were flat today and headed into Friday the Nasdaq is up .2% for the week tacking on to last weeks impressive 2.2% move. The S&P 500 is up .1% and looking for its third consecutive weekly advance. Thursdays winners were consumer staples, financials and energy. Energy is looking for a fifth consecutive weekly advance. Below is a chart of the XLP which is holding up decently despite the fact that 3 of the top 5 holdings in the fund are beneath their 50 and 200 day SMAs (WMT, KO and PG). It would have been 4 of 5 if PM did not record a big gap today. That can be construed as a positive as staples are not the type of sector you want to see thriving. You would prefer to see tech, retail and consumer discretionary names and financials have been perking up. GS is having its own little tug of war at the 200 handle. I think that best of breed name will win that battle and make its way higher.
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