Markets spent most of the session repairing early losses and put in a respectable day. The major headlines were scaremongering from the likes of Icahn and Soros, great investors undoubtedly, but perhaps past their prime. Some risk appetite was taken off Thursday with the small cap Russell 2000 falling .6% and the Nasdaq by .3% and the S&P 500 lost .2%. For the week headed into Friday both benchmarks are looking at potential 4 week winning streaks, but it is the S&P 500 heading into Friday which is higher by .8% compared to the Nasdaq’s .3% gain. The Nasdaq’s weakness has to be somewhat due to the softness in the biotech group, which may be forecasting a Clinton victory this fall, as she has pulled ahead this week in many polls. Leading sectors today were the “defensive” utility and staples groups, and acting in an inverse fashion the laggard Thursday were the banks, and the utility strength could be viewed as investors make bets that an interest rate hike could be further out than many believe. Retail name remains a group that has become very bifurcated and as always in any group one wants to stick to best of breed names. Value players may prefer beaten up names like M, GPS, WSM or BBBY which are all off between 33 and 51% from their one year highs, but we respect strength. A name that fits that bill is PVH and the chart below is how we presented the name in our Thursday 6/2 Game Plan. It is now just below a double bottom trigger of 98.32 which can also be viewed as a bull flag. A move above the flag pivot would have a measured move to the 112 level.
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