Markets started the session Wednesday on solid ground, even with a brief pullback in the futures after 830am as Yellen testimony was released, revealing a reluctance on her part to lower rates in the future or provide anything in the way of possible stimulus. For a change the Nasdaq did outperform as the FANG names provided a cushion. The Nasdaq rose .35% Wednesday and was the first day in the last 8 it outperformed the S&P 500. Benchmarks seemed to be hanging on a thread hoping for some dovish comments which never materialized. Transports continue to show strength in a weak market environment and below id the chart of WAB how it was presented in our Wednesday 1/20 Game Plan. Wednesday it recorded a bullish engulfing pattern with support at the round 60 number, a handle which has provided bids most of the year thus far. Financials at the moment are battling with the round numbers of their own with the XLF trying to maintain altitude above the 20 figure. Tuesday the ETF bounced within 2 pennies of the number and I read this weekend that the sovereign wealth funds have been heavily weighted in financials and consumer discretionary names. Any wonder those two sector seemed to be under relentless pressure? The banks of course are out of favor with this administration, are exposed to high yield in energy and may have to live without the benefits of rising interest rates. Thats a bit more than a wall of worry.
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