Markets began the week in quiet fashion with the Nasdaq and S&P 500 finishing off .1%. With the exception of the first half hour of the session the benchmarks spent the entire day in the red. The S&P 500 continues its very tight trade and todays range from top to bottom was less than 8 handles. It is looking like last Tuesday break below the bull flag formation could have been a bear trap. Look for a continuation to the upside to persist. The Nasdaq is on a current 6 week winning streak and over the last few weeks it tends to occur once a year. One 7 week winning streak took place between the weeks ending 2/17-3/30/12 which resulted in the index losing ground 7 of the next 9 weeks. A 6 week streak ensued between 1/4-2/8/13 and the following week ending 2/15 lost less than 2 handles. In 2014 the weeks ending 10/24-11/28/14 were followed the next 2 weeks by almost a combined 3%. And finally on 2015 a 6 week run happened between weeks ending 10/2-11/6/15 and the following week ending 11/13 slumped 4.3%. It is not going out on a limb to say we should see some back and filling. The group which behaved best today was clearly energy with the XLE higher by 1.3% and it is now approaching the round 70 number which it has not CLOSED above since the week ending 7/17/15. The weeks ending 11/6-13/15 both traded intraweek above 70 but finished well below the round number (it did so again the week ending 6/10 this year. Many individual names did back off and reverse Monday and it will be interesting to see how they act for the rest of the week. Healthcare was the worst performing sector with the IBB having issues not surprisingly at the very round 300 number after the bearish dark cloud cover candle last Thursday. Below is the chart of VRTX and how we profiled the name from our Friday 8/5 Game Plan. It seems to be finding support at its own very round number, par.
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