Markets scored lukewarm gains Tuesday after a very strong start to the week. The Dow, Nasdaq and S&P 500 all were mildly higher in the .3% neighborhood, but the outperformer of the day was the Russell 2000 which added .6%. It chart trades a bit wide and loose and looks to be carving out a cup base pattern which does have a V shape to it. Bulls normally like to see more rounded out action. The Nasdaq is at a critical juncture here as it seems to be hesitating at the 6450 number for the third time today and beginning with the ugly engulfing candle from the 7/27 session. The big winner of the day were the financials with the XLF gaining 1.3%, followed by materials and energy. The utilities were the clear laggards with the XLU shedding 1.7%, its worst day since 2/1 and trade was elevated. Getting back to the banks many of the big names are still swimming underneath their 50 day SMAs, although some are trading right at them like MS and BAC. What I have not heard many mention has been the renewed strength in the transports, a subsector in the industrial space. The IYT is on a nice run here gaining 11 of the last 12 sessions and the ETF broke above a double bottom trigger of 170.24 on 9/11 and today demonstrated excellent follow through, just want you want to see from a fledging breakout. Keep in mind the best ones tend to work right away. The fund is benefitting from the strong move from its largest component FDX which had its issues with the very round 200 number dating back to the week ending 12/16/16. The stock did break above a 7 month weekly cup bas trigger of 201.67 the week of 6/2/17 jumping nearly 5%. It is now approaching a 220.09 cup base pivot. The transports are delivering the goods, pun intended.
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