Markets recorded nice intraday comebacks to go out on highs for the session and once again it was the Nasdaq that acted the best with a gain of .3%. The tech heavy index is looking at a fifth potential weekly gain higher by 1.1% heading into Friday. The move has been very impressive yet one gets the feeling that the move could have gone a bit further with many large components in the benchmark like AAPL, MSFT, and FB recorded very nice earnings reactions. The S&P 500 rose .2% Thursday and is lower by .2% so far for the week. The Nasdaq would be going for a fifth consecutive week of outperforming the S&P 500 tomorrow if it were not for a fractional gain of 1.47% the week ending 7/15 (S&P 500 gained 1.49% that week). Investors favored defensive sectors today as it was the staples and utilities that acted the best, just the opposite of Wednesday. Takeaways from recent action include some pause in the homebuilder periphery group and even some stalwarts like SHW and PPG acting shaky. Below is the chart of the exception MAS which was profiled in our Tuesday 7/12 Game Plan. The stock is up better than 9% this week and is lower just 4 session in all of July thus far. Overall we are concerned with selective action in the retail group with stocks like UA NKE GIII CRI and SKX to name a few. Packaging play SEE recorded its second consecutive negative earnings reaction falling almost 4% today after a decline of 8.2% on 4/28 (notice how it was stopped precisely at the round 50 figure today). The path to least resistance is still higher at the moment and one would pay to respect the recent price action until it gives one a reason not too.
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