Markets began the session in the green Thursday and never looked back going out near highs, again with the Nasdaq dominating with a gain of .95% and the Russell 2000 added 1%. Since a double bottom at 1350 it is now higher 7 of the last 10 days and is now challenging its 50 day SMA. The S&P 500 rose .6% and for the week headed into Friday the Nasdaq has gained 2.6%, doubling the 1.2% jump for the S&P 500. Looking at individual groups healthcare was a clear standout with the XLV higher by 1.7% and followed up by an impressive materials gain of .8% and energy and technology were the other solid actors. As tech heats up it may be a good idea to watch names that are NOT participating as this could be a tell if things turn sour. Below is the chart of AAOI and how it was looked at in our Friday 8/18 Game Plan. This name was a beloved darling on Wall Street but is now 43% off most recent all time highs and not surprisingly it found trouble right at the very round par figure last month. The measured move is a bit large and never a science but one could logically see a move to the 200 day SMA which would cause a reset and lets both bulls and bears reassess. The stock is LOWER by 5.1% this week as the Nasdaq is perking up. Buyer beware. For a second consecutive day utilities and staples languished near the bottom of the sector showings. It would be wise to mention however that the XLU lost ground just 7 days in all of August with the largest daily loss of the seven just .7%. One caveat for the ETF is the break above a recent cup base trigger of 54.73 on 8/22 was V shaped, often failure prone as one wants to see the shape more smoothed and round.
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