Markets finished with tame returns to begin the week Monday and the Nasdaq did CLOSE well off session lows which were off by .8% in the late afternoon. It then went on to record higher highs and lows for the afternoon but did finish down .4%. The S&P 500 was essentially UNCH, and the story yet again was the Russell 2000 which advanced by 1.3% on the expectation of a strong economy going forward. Not only was there bifurcation in the major averages but the sector performance is beginning to sound like a broken record with the banks powerfully higher by 2.6% and it was technology which surrendered 1.5%, via the XLF and XLK. AAPL fell for the fifteenth time in the last 21 sessions losing 2.5% today and did find some buyers near its 200 day SMA which just started sloping higher in late September. It does appear “oversold” as it has hit the oversold 30 RSI number for the first time in the last 6 months and I could see a bounce toward a now declining 50 day SMA which could potentially be the right clavicle in a bearish head and shoulders pattern. The FANG group has been hit hard and all four are now in correction mode as AMZN, FB, AAPL and GOOGL are now 15, 14, 12 and 10% off the respective 52 week highs and we spoke about GOOGL in a recent post regarding the round numbers. The financials are now sprinting higher and some names have really hit their stride. The group is very diverse and below is the chart of MA and how it appeared in our Wednesday 11/2 Game Plan. Monday the stock undercut its 200 day SMA and it suffered a bearish engulfing week at all time highs ending 11/4 and last week recorded a doji candle, which often signal a change of the prior direction. It is a good example of why traders need to be vigilant about losses even when charts look as good as MA. Often the time to be the most concerned is when they look their best. Another way of saying good risk management.
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