A one and done, minuteman of a rally for the Nasdaq as it acted limp on hump day, puns galore. Was that all the tech heavy benchmark could muster after ending an 8 session losing streak Tuesday? We have spoken at length about the concern of tech underperformance. After last weeks 7.3% bludgeoning it now rests lower by 2.5% this week thus far. It is heading for a test of the 4500 level on a CLOSING basis which held on 8/24-25 and 9/29/15. Problem is I always remember an old trader a long time ago telling me there is no such thing as a triple bottom. I tweeted earlier that perhaps all these hedge fund managers closing shop, with most staying active with “family offices”, know just how difficult it will be to manage money for clients in the future. Not far behind tech were healthcare and financials as the worst acting groups Wednesday. The XLF undercut its August CLOSING lows for the second time (it did so last September as well) and of course that affects numerous groups with the homebuilders (via XHB) now 23% off recent 52 week highs. Healthcare which has been the 2nd best performing sector for the last 3 years has seen some old best of breed names that were getting shellacked before todays sickness. Monday it was MCK which sunk more than 10% and is now 35% off recent 52 week highs. Wednesday it was ESRX which shed 7% and now sits upon the round 80 number which was instrumental if one “looks left” on the chart. It is now retesting a 79.47 cup base pivot point it took out the week ending 11/21/14 in an 8 month base. Another best of breed name that is acting sickly is CRL. Below is how we profiled the name in last Fridays Game Plan.
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