Markets traded in a narrow range Friday with the Nasdaq and S&P 500 finishing off session highs but higher fractionally by .1%. The Nasdaq just missed recapturing its 50 day SMA today, but ended the week down 2.65%. It did rise by a combined 7% the prior 3 weeks. The S&P 500 fell 1% on the week and recorded a bearish harami in the process, although it did register a bullish MACD crossover by the slimmest of margins. Looking at sector strength Friday the defensive oriented names dominated with the real estate, utilities and staples groups the best performers on the day. Financials and consumer discretionary were the laggards Friday with the XLF falling 1.1% and the XLY by .55%. For the week however, the clear standouts were the financials and energy with the XLE rising 2.9% with the largest weekly volume since the week ending 3/18. On its weekly chart it climbed back above its 200 day SMA for the first time since June ’15. The ETF is now on its first 4 week winning streak since April and has advanced by a combined 10%. It looks like it could be headed to the very round par number where it had issues between the weeks ending 6/20-7/15/14 (keep in mind the XLE bottomed almost precisely at the round 50 figure the week ending 1/22/16). Speaking of the very round 100 number, another commodity I think will see the price is gold, via the GLD sometime next year. It is the total opposite of the XLE, DOWN 4 weeks in a row and has fallen 10 of the last 18 weeks. The ETF found support there between the weeks ending 11/27-12/18/15. That would complete a rounding top pattern and if it loses that round number, it could have a lot farther to fall. Below is the chart of the shorter term trend, which has some room to bounce.
This article requires a Chartsmarter membership. Please click here to join.