Markets continue to climb the wall of worry and the major averages were in the green for almost the entirety of the session. At the expense of sounding like a broken record the Nasdaq led gaining .6% after recording its ninth consecutive gain (the Russell 2000 rose 1%). For the week thus far it has gained more than 1% already and that is on top of the prior weeks robust move of 2.6%. It is now well ahead of its double bottom breakout just above 6300, and if bears want to point to something they can whine about the lack of volume. But as we all know we are paid on PRICE and the action has been undeniable. Could it change on a dime? Of course it can, but remember markets can go on a lot further than any of us believe in both directions, and fighting the trend is fruitless. Bears can mention on a contrarian note that SCHW saw a huge increase in new account openings, 34% worth, in the first half of this year, as small investors are often seen as entering near market tops. Looking at individual groups energy was the best with the XLE rising 1.5% and the ETF is now testing its 50 day SMA for the fifth time this year alone, and conventional wisdom states the more time a line is touched the stronger it becomes. I have no position in any energy related names, but I would say that will be broken to the upside sometime soon (today inched past and would like to see decisive follow through). Will it have legs is the question? Other groups that have been soft include retail and some of these names have been washed out earlier in the year and are trying to catch some footing. Below is the chart of LULU and how it was presented on our 6/30 Game Plan and its 200 day SMA is now beginning to curl upward as the elastic in their products stretches higher.
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