Markets very narrow range pows on with Thursday seeing the major averages holding near the flat line. The Nasdaq and the S&P 500 fell by .2% and the Russell 2000 bounced right off the round 1500 number ending lower by .1%. Maybe something of note is the Nasdaq recording a bearish gravestone doji candle at all time highs. For the week headed into Friday the S&P 500 is unchanged and looking for a fifth consecutive weekly advance. The Nasdaq is also flat and it felt like it should have been higher with FANG names acting lukewarmly. Both GOOGL and AMZN finished off session highs but above the very round 1000 figure, and NFLX is having issues with the 200 number even with upgrades.
Looking at individual sectors the market is omnipotent and it clued us in on some possible issues with the financials as the utilities and staples were solid for a third consecutive session. Both C and JPM recorded ugly reversals Thursday, C the worse off falling more than 3% after each reported earnings this morning. Perhaps BAC and WFC can bring some better action tomorrow after their releases, action as both C and JPM did put up solid reports, but most important is the reaction in the stock price. Retail continues to bleed and at some point it is just going to be too easy to short retail, but we are still most likely in just the 4th or 5th inning of these declines. One must remember the adage that things in motion are more likely to remain in motion than to reverse trend.
Healthcare is such a diverse group but we chatted about the XBI bull flag trigger above 85 and that was taken out and is currently on a 5 session losing streak, but the damage has been limited with the ETF just 2% off most recent 52 week highs. It also is closing in on a cup base trigger of 91.20 in a pattern that began the week ending 7/24/15. Digging deep into the group there have been some big winners, yet below is a sleeper in SGEN. Below is how the stock was portrayed in our Friday 10/6 Game Plan. The stock is higher 6 of the last 7 weeks and this week by more than 7% heading into Friday, but still is 18% off most recent 52 week highs. It burst above a bullish inverse head and shoulders pattern recently and through its 200 day SMA on 10/11. One can stay long above the 200 day but the conundrum exists whether one should buy leaders or laggards trying to play catch up. To give an analogy ALK has lagged the airlines and this week is down fractionally, while a leader like AAL has advanced 2.7% (ALK is 21% off its 52 week high while AAL is just 3% of its). Regardless SGEN should be owned as long as it stays CLOSING above the 200 day.