Markets displayed some big bifurcation Wednesday as the Nasdaq powered ahead by .75% and for the week and is higher by a respectable 1.3% so far for the week as it attempts to elude a possible 3 week losing streak, a feat it has not recorded in one full year. On the flip side the Russell 2000 fell .2% and finished hard upon its lows for a second consecutive session and is now crossing back below the round 1400 number for the third time since March. The S&P 500 fell fractionally and needs to move higher soon to avoid a failed breakout above a bull flag which occurred this Monday. Looking at individual sectors it was a carbon copy of Tuesday with healthcare the best performer with the XLV higher by 1.3% and energy lagging seemingly on a daily basis as the XLE floundered another 1.6% today. One would think sentiment is as bad as it can get and there are some names that can be dipped into with decent risk/reward with tight stops. True markets have in the past traded in tandem with oil, and I am old enough to remember the days where lower crude would be a boon for retailers (PLCE and BURL fell by 5.5 and 4.8% respectively Tuesday), but those days are long gone. Markets have been able to rally in the face of very weak energy prices with the time period of 97-98 when WTI fell 60% while the S&P 500 rose by 70%, h/t Urban Camel. I happen to be a big proponent of the round number theory and below is the chart of AERI and how it was profiled in our Wednesday Game this week. Notice how since 6/12 the very round 50 number held on a CLOSING basis every time even though it traded at or below on five separate occasions in the last 7 sessions.
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