Markets spent the early morning hours bobbing above and below the UNCH line, but CLOSED near session lows, but the damage was limited with the S&P 500 and Nasdaq falling less than .2%. The Russell 2000 had a little tougher go of it losing .44% but still digesting the huge recent run up well above the round 1500 number. Helping tech was the behavior of the semiconductors as the SMH is now on a current double digit winning streak lasting 10 days so far. The generals of the space NVDA and MU rose 2.3 and 3.5% respectively, and when the leaders outshine on a lackluster tape that is what you want to see. Gold is starting to look mire attractive as both its 50 and 200 day SMAs are rising and Friday recorded a bullish piercing line off the round 120 number and filled in a gap from 8/8. The ETF is on a 4 week losing streak but fell by a combined 5.2% and each successive week dropped less than the previous one.
Looking into individual groups action Monday it was technology that led with a .25% gain and energy and utilities that were the only major S&P sectors to advance. Lagging were financials and healthcare, and some retail names behaved poorly. We highlighted BBBY in our Monday Game Plan, and when a name in a weak group in an overall strong market uptrend, and lags when its own group bounces you have a prime short candidate. The XRT lost 1.9% today after falling below its 200 day SMA. It has repeatedly encountered trouble there and this time around it CLOSED above lasted 7 days, perhaps creating a bull trap, but its long term line is still downward sloping. Was surprised to see FINL as the top holding in the XRT, but it is well diversified as it it accounts for just 1.46% of the fund.
Healthcare was the worst acting group to begin the week as the XLV, and if you follow RSI (14) it has now made 3 lower highs since hitting the mid 80s in June. Price continued to advance, causing a negative divergence, but again we just focus purely on PRICE action itself, devoid of any indicators. Below is the chart of BIVV and how it appeared in our Friday 9/29 Game Plan, a spinoff from the heavyweight BIIB. BIIB is coming off a nice week gaining 4.6% as MS upgraded the name, while putting peer CELG on the sell block. BIIB is now just below a 330.10 weekly cup with handle trigger that began way back the week ending 3/20/15 as it hit all time highs that week. BIVV is now out of correction mode lower by 9% from most recent 52 week highs and the emerging cup base is looking all the better after a reclaim of its 50 day SMA. Now one can add to or initiate a position above 64.51.