Markets finished the hump day session close to the UNCH with the Russell 2000 falling .3% recording a bearish engulfing candle after Tuesdays hanging man. It is certainly due for at least a pause here and lets see if it can trade sideways here and potentially form a bull flag. The S&P 500 is now on a 7 session winning streak and looking at a potential 4 week winning streak, which is rare as it registered just one other the last 14 months with a 6 week streak weeks ending between 1/27-3/3/17. The Dow which has not been getting to much focus, is acting well after its recent break above its 22180 cup base trigger which was retested on 9/25 and held firm. It is behaving nicely too above its add on break above the bull flag pivot of 22420 which still has a way to go before its measured move of 23100 is achieved.
Looking at individual sectors Thursday it was the moribund utilities that made the best move with the XLU gaining .1% followed by the cyclicals, healthcare and staples giving the day a risk off feel. Lagging were technology, energy and financials. Todays gain by the XLU erased its weekly loss thus far and the piercing line candle we spoke of from 9/28 is holding firm. Regarding the risk off notion today, REIT’s and telecom rose smartly too. The biotech’s rose .5% via the XBI as it to recently broke above a bull flag trigger of 85 which carries a measured move to 95. The four weeks ending between 9/1-22 all CLOSED very taut within just .96 of each other and that was the fuel for the liftoff last week which rose 3.2%. On the weekly chart it is sniffing out a long weekly cup base trigger of 91.20 which began the week ending 7/24/15 which would record an all time high. The pattern began following a huge move gaining 48 of 66 weeks ending between 8/8/14-7/17/15 which traveled from the round 40 to 90 numbers roughly. Has the current look on the weekly chart as being in the middle of a very powerful third Elliott wave.
Browsing through hundreds of charts a night I have been seeing a lot of certain patterns emerge. Some of my favorites are the bull flag or ascending triangle and below is the chart and how it was presented in our Friday 9/15 Game Plan. Since a bullish engulfing weekly candle ending 8/11 which barked higher by nearly 10%, pun intended, in weekly volume the second strongest since coming public, it has advanced 7 of the last 8 weeks and more than 2% this week so far (the lone down week ending 9/15 lost just .13). It blew past a bull flag trigger of 26.40 and is now higher by 10% from the highlighted trigger. On the weekly chart one can see that it also inched past all time highs of 28.80 just after coming public the week ending 8/7/15. Consider it a break above a 26 month cup base pivot point and the flag breakout still has not achieved its measured move.