Markets never saw green Thursday and through the course off the session the bleeding continued. The Nasdaq which has been concerning to me at least from the 6/9 session fell by triple digits and almost 2% today and undercut its 50 day SMA just three days after reclaiming it, a very bearish sign. As of yesterday the tech heavy benchmark was higher for the week but now is in jeopardy of registering a fourth consecutive down week, and all four finishing at lows for the weekly range. As with daily charts it is not where you start but where you end up. Keep in mind as well it was been 15 months since the last 4 week losing streak on the Nazz. The S&P 500 also undercut its 50 day SMA and the problem may turn out to be investors are becoming complacent to the fact that another quick recapture is just days away. The indexes rarely just fall out of bed without warning signs and this time is no different whether you want to point to the bearish shooting star candle at all time highs for the S&P 500 on 8/8 which now looks like a bull trap after an intraday flag reversed. The Nasdaq recorded a nasty bearish engulfing candle on 7/27 also at all time highs and the defensive in nature Dow is now the only major average above its 50 day SMA. Once again it was the utilities and staples that “outperformed” as the XLU and XLP fell by .7 and .9% and selling was indiscriminate. Many are blaming this recent weakness to the Trump agenda now almost dead, but it was never really even in motion. What those people that talk about that fail to realize is that it was most likely built in as the indexes look forward by 6 months. One would be wise to scale down their size in the current environment and even monitor names that ignored the shaky tape Thursday. Below it the chart of COH and how it was written in our Wednesday Game Plan this week. Perhaps one very delicate earnings report this week could be forgiven as the previous four all gained ground.
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