Markets put in a powerful session Tuesday and encouraging was the Nasdaq leading with the index higher by 1.4%. It did reclaim its 50 day SMA in the process and was the second consecutive day CLOSING near highs for the day. Early on I had the feeling that this was an important day for if the averages were unable to maintain the big morning gains and rolled over it would have been very difficult for the bulls to come back from that. Certainly there is still work to be done, but today was definitely a positive. It is often said the hard trade is often the correct one and it would have taken lots of courage to step in and go long any of the prior three days before Tuesday, so those that did I commend you. The S&P 500 also recaptured its 50 day SMA marginally today adding 1% and the Russell 2000 gained 1.1% and finished just underneath its 200 day SMA. The rally was broad based Tuesday with 6 of the 9 major S&P sectors rising more than 1% and it was technology that led via the XLK with a jump of 1.5%. Materials and healthcare were the second and third best sector moves and the XLV is on a current 4 week losing streak but the ETF is just 2% off most recent 52 week highs. Looking at some strong material plays benefitting from nice numbers coming out of China are SCCO. Below is how the chart appeared in our Wednesday 8/2 Game Plan and today recorded its second straight CLOSE above the round 40 figure. A peek on the weekly chart shows the stock now traveling toward a long 42.13 cup base trigger in a pattern that began way back during the week ending 1/25/13. The recent flag breakout also carries a measured move to 46.
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