Markets concluded the week Friday on a sour note. It could have been worse as the bears seemingly could have piled on during the session, but benchmarks finished somewhat off their lows. It was the Nasdaq which was the hardest hit once again falling 1.3%. For the week it lost 1% and recorded a bearish engulfing and failed at the very round 5000 figure. The S&P 500 lost .1% and continues its tug of war with the round 2100 number. Looking on its weekly chart one can see just how tight the CLOSES have been with the last 3 all finishing within just 3 handles of each other. That type of coiling action will often resolve itself in a dramatic move, the direction however could be either way. On a YTD basis the S&P 500 is still firmly in control with an advance of 2.5% compared to the Nasdaq’s 2.2% loss. For the day it was energy slumping 2.1%, which seems to capture the attention of investors intently these days. Pouring over the XLE chart one notices the bearish gravestone weekly doji candle right at the round 70 number (on Wednesday it recorded a bearish counterattack candle). The round number theory has played a role with the ETF with the 50 handle holding firm the week ending 1/22. For the week the XLE was the best performer up 1.3%, underscoring the potential danger with the big reversal. It was the staples and utilities which were the second and third best performers each up in the 1% neighborhood. Big question going forward will be if the WTI move above the round 50 number was a bull trap. The markets seemed to be pinning its hopes on a tech revival which has lost its momentum. If energy were to follow suit as it is now we could be in for a long summer.

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