Markets were somewhat listless Tuesday, which is a good thing as it takes a breather. The Nasdaq, Russell 200 and S&P 500 rose by .2%. The Dow is on a five session winning streak, not long after registering a 9 day streak between 9/8-20. It is now 600 handles above the rising 50 day SMA after touching it on 9/8. The S&P 500 is up 5 days in row, but up only +1.3% during streak and this is the ‘weakest’ 5-day win streak since Aug ’12. (41 total 5-day win streaks) h/t @ryandetrick. Another look at the S&P 500 five session winning streak is brought to us by @urbancamel, with anytime in the last 5 yrs that it advanced 5 straight days, it closed higher 20 of 20 within next 5 days by an average of 1% (average maximum gain within 5 days has been 1% (some higher, some lower). That was as of Monday, and the S&P 500 streak continues with the tally now at 6.
Looking at individual sectors that led Tuesday it was the same old story with cyclical, materials, industrials, finance and technology that were all up lukewarmly. It is a good example of trends that are in motion tend to stay that way for some time. And that goes both ways as the utilities lagged with the XLU off by .3%, but with all the rising rates chatter the ETF is still just 5% off most recent 52 week highs. The fund has sold off in volume however during its current, rare 3 week losing streak with the last 3 weeks recording high volume distribution. The cyclicals are benefitting from a nice move in the homebuilders and automobiles and select retailers. Regarding the autos with all the talk surrounding GM, deservedly so, F is looking for a potential 7 week winning streak and is now comfortably above its 200 day SMA in both price and time, as the stock has traded below it for the last 3 years consistently with some brief spurts above that were always short lived.
Technology will always be a big focus with traders as the group is diverse and where many can find future winners. Many leaders will come from relatively new issues. If one can hitch a ride early when the name is under followed they can reap potential enormous capital gains. Below is a name in the software space now higher by 229% since inception in April ’14 and how it was looked at in our Tuesday 9/5 Game Plan. The stock is on a current 6 week winning streak including last weeks superior move of 6.6%. A purchase above its 50 day SMA was highlighted which it recouped on 9/7 and the double bottom trigger of 23.57 was taken out on 9/29. Keep in mind the generals in the stock market will provide add on opportunities to increase your position and today today all time highs and could be interpreted as a move above a 24.90 cup base trigger. The stock is still in a buy zone and notice how the very round 20 number held up well on 6/12 and a bullish piercing line pattern completed on 8/18 put the right side of the double bottom pattern in.