Markets opened the week with decent gains Monday, but overshadowed was the underperformance of the tech group. The Nasdaq did rise however by .3% and the S&P 500 rose by .5%. From the sentiment over the weekend it seemed like many thought Fridays reversal would have consequences today. All of the major S&P sectors did advance with the financial group the best actor and the with the XLK rising .8%. Whether rhetoric you want to believe, whether it is interest rates on the horizon may be rising, it is best to focus primarily on price action, since this is ultimately how we are compensated. Rising in sympathy with the perceived notion of rate increases were the homebuilder and the periphery names. Energy names continue to act well despite the underlying crude commodity struggling somewhat, often a nice tell for equities in the space. Below is how I looked at SM in our Friday 8/19 Game Plan. Looking at the XLE it CLOSED just beneath the round 70 number and has managed only 3 finishes above that figure since breaking above it on 8/18. I believe this group has some of the best potential and one would be wise to scour under the surface for long ideas.
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