Markets took a breather Wednesday with the major averages underwater most of the session and the ended that way as well with the Nasdaq recording a fractional loss and the S&P 500 with a decline of .35%. Volume trends on the Nasdaq are bullish since the break above 5000 and notice the down days, 4 since taking out 5000, have all been generally very narrow ranges which is bullish. One thing the bulls can possibly hang their hats on is the fact that the small caps seem to be acting better this week in regards to the IWM. Thus far for the week the ETF is higher by 2.6% while the Nasdaq and S&P 500 have advanced 1.8 and 1.1% respectively. Energy took the biggest hit Wednesday as the overall group gave back better than 1% and few escaped the route today with the exception of DVN which had a well received earnings reaction higher by almost 3% but CLOSE in the lower half of its daily range. HES also moved higher marginally as it has hired GS to explore a sale of itself. RRC which is lower 54% from recent 52 week highs gained 10% as it sold assets. Concerning is the action of one of the top performing groups currently, the homebuilders. I like to keep an eye not only on the pure plays names but also periphery stocks. This week HW, a former favorite of mine, has slumped more than 13% so far. The chart had the look of a bullish inverse head and shoulders pattern, and another example of why one should always wait for PRICE confirmation. LPX is showing weak relative strength lower by 3.2% this week. To be balanced one name has acted lively, WD has jumped almost 11% this week after a solid earnings report this morning. Below is the chart how it was presented in our Thursday 10/8 Game Plan. Today it blew through a flag pattern and the round 30 number after an earlier breakout above a 28.25 cup base pivot point on 10/8.
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