Markets concluded a strong week powerfully Friday with the Nasdaq leading the way up .7% and on a current 4 day winning streak. We spoke Wednesday of the need for a follow through and today it was delivered and it is now comfortably above th 6450 level that was pesky resistance since the summer. The tech rich benchmark is now higher 4 of the last 6 weeks, and the weeks ending 9/15 and this week rose 1.4 and 1.1% in firm volume. The S&P 500 has advanced three consecutive weeks and 5 of the last 6, and more impressively all of the last 6 CLOSED at or in the upper half of the weekly range. The Russell 2000 is on a six session winning streak and it seems to being pulled magnetically to the round 1500 number. On a YTD basis the Nasdaq is still in firm control up 20.7%, the S&P 500 by 12.5%, and the Russell 2000 which not long ago was negative for ’17, is now up 9.8%. The bears are losing hairs trying to come to grip with this rally, unless perhaps they are short staples, and they will most likely be hanging their hats now that next month is the scary October.
Looking at individual sectors Friday it was just what bulls like to see with technology, healthcare and the financials the best actors, and becoming a habit it was the staples and utilities that underwhelmed. On a weekly basis it was the XLE that was the best behaved as the ETF gained 1.9% and is now on a 6 week winning streak, as shorts continue to be unwound and perhaps some longer term investors building positions. The XLF added 1.7% and was the second best weekly sector performer. The XLU was the only major S&P group to fall, with a fractional loss of .3%. It is on a 3 week losing streak lower by a combined 4.2% and it is just the second 3 week losing stint since the November-December ’15 period.
Sticking with the energy group we always like to note names that were strong especially if their specific sector was weak on a particular day. Below is the chart of FANG and how it was looked at in this weeks Tuesday Game Plan. Friday it rose almost 1% as many in the space were in the red. This was a former best of breed name and should get its mojo back fairly quickly if this rally in the group continues. It is now just below a bullish ascending triangle trigger of 98 and a breakout would have a measured move to 113. We like to use the term “cluster of evidence”, meaning if a couple of different ways to enter a name align that usually gives the breakout, if it were to occur some more juice. FANG is a good example of this with the triangle coinciding with 200 day SMA resistance. This has the feeling of a beach ball being held underwater to me. A break above 98 could really start this name gushing higher, pun intended.