Markets ended a productive week with lukewarm gains as the Dow and Nasdaq added .3%, the S&P 500 by .2% and again it was the Russell 2000 that outperformed gaining .5%. Volume was strong due to quadruple witching Friday.
For the week the indexes put in reputable advances with the Russell 2000 higher by 2.3% (keep in mind it lost 100 handles rapidly between 7/21-8/18), the Dow rose 2.2% and is on a current 6 session winning streak, the S&P 500 was higher by 1.6% and the Nasdaq by 1.4%. The tech heavy benchmark woes at the 6350 level continue.
Sectors that contributed the most to the respectable weekly gains were the financials and energy as the XLF and XLE rose 2.8 and 2.2% respectively. There has been discussion that leadership came from weak groups such as energy, but I feel that the ongoing rally is just broadening out.
The only two groups that lost ground on the week were the utilities which fell 1.1% and the newly created XLRE which dropped .5%. Both of these ETFs are still looking strong as the XLU is just 2% off most recent all time highs and the XLRE is 1% off its and is still building the right side of a cup base trigger of 34.92 in a 13 month base.
Retail continues to rebound as evidenced by the XRT showing solid relative strength this week higher by 2.8% and is on a current 4 week winning streak. As we know the stock markets tend to overreact to both the up and downside and the group may just be enjoying a logical bounce from oversold conditions. Below is a chart of COST, and how it was presented in our Wednesday 9/13 Game Plan, that was adversely affected with the AMZN/WFM takeover falling more than 13% the weeks ending 6/16-23. It is still 11% off most recent 52 week highs, but back above its 200 day SMA and higher 6 of the last 8 weeks as the right side of a deep cup base takes shape.