Markets finished hard upon their lows with both the Nasdaq and S&P 500 losing ground by 1.1% for the 4th consecutive down session. The S&P 500 recorded a bearish engulfing week on elevated trade near all time highs, rarely a good scenario, slicing its 50 day SMA in the process. For the week it lost 2.2% and nows tenuously holds onto just a 1% gain YTD. The Nasdaq did complete a bearish dark cloud cover on the weekly Friday also at all time highs and fell 2.3% and still maintains a large advantage over the S&P 500 on a YTD comparison up 7.4% (the Dow is now in negative territory YTD off 1.4%). What worries us the most as we have been through the toughest week with regards to numbers of companies reporting is the possible softening of yet another very important group to the Nasdaq, the true leading index currently. We all know of the semis falling out of favor recently, but this week the biotechs, part of the robust healthcare group, showed vulnerability. BIIB lost one quarter of its value this week in easily the largest weekly volume in more than 5 years. Perhaps it CLOSED at the round 300 handle where it found support dating back to the months of June, July, October and November last year. The speed of Fridays decline is troublesome however. ILMN, like BIIB, reported earnings this week and fell almost 8%. One group that did act well on a horrible tech tape Friday was the software group. So we have one healthy, one easing (healthcare) and one wounded (semis). Names that held up strong in the market adversity Friday were QLIK VRSN PFPT FTNT NOW and N. Below is how we presented CRM in ourWednesday 7/15 Game Plan. If this market can regain its footing a double bottom trigger of 76.31 awaits.
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