Markets hovered close to the UNCH line again on Wednesday as they digest some recent powerful moves. Looking at some of the secondary indicators suggest that the market could be readying itself for a pullback. On the Nasdaq RSI for one it is still in the process of making lower highs four separate times each of the last 4 months beginning with May. It is important to remember that PRICE is king, and it should be your only signal when making decisions. The S&P 500 is stalling at the very round 2500 number and one would like to see the recent break above a 2491 cup base trigger accelerate higher. The Russell 2000 was once again the best actor Wednesday as it gained .24%. Looking at individual sectors it was energy, the XLE rose 1.25%, that romped higher as crude rose more than 2% and it readying itself for a test at the very round 50 number. Glancing at the WTI chart the 50 figure also roughly aligns itself with the 200 day SMA which is now upward sloping and a move above 50 could be interpreted as a bullish inverse head and shoulders formation with a slanted neckline and a breakout would carry a measured move to 58. Retail names are helping the market along as energy stocks gather steam too, which back in the day would be an unusual development. The XRT, like the XLE, is attempting its own 4 week winning streak and heading into Thursday has jumped 3.2% for the week so far. Peering at a longer term view the ETF may have made a major double bottom with intraweek lows of 37.72 and 37.80 the weeks ending 8/25 and 1/22/16.
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