Markets rejoiced Friday with the Nasdaq having an exceptionally strong session higher by 2.2% recording a rare gap up, courtesy of some big names registering some powerful earnings reactions. Half of the FANG names reported today and AMZN screamed higher by 13.2% and is now above a cup base trigger of 1083.41 in gigantic volume. GOOGL advanced 4.3% but posted a bearish shooting star finishing down more than 30 handles from intraday highs. Not to be outdone INTC and MSFT rose 8 and 6.4% respectively. For the week the Nasdaq is now on a 5 week winning streak and rose 1.1% this week, the best of the major averages. On a YTD basis it still holds a commanding lead up 24.5%, with the Dow not that far behind gaining 18.6% so far in 2017. The Dow and S&P 500 are both on 7 week winning streaks. The Russell 2000 was the only of the aforementioned 4 benchmarks to lose ground this week off by just .1%. Its flag which we have been focused on is intact and the last 4 weeks have all CLOSED extremely taut within less than 8 handles of each other.

Looking at individual groups Friday the tech and cyclicals were outsized winners with the XLK and XLY up by 2.7 and 1.6% respectively, not typos. On the opposite side of the spectrum was the materials and staples groups which lost .5 and .9%. The XLP is off just 7% from most recent 52 week highs, but the fund is lower 3 of the last 5 weeks including losses of 2.4, 1.2 and 1.5% the weeks ending 9/22, 10/20 and 10/27. It was the financials that were surprisingly lower today and with the huge gains one would have thought the rally would have seen more broad based participation. In fact 4 of the 9 major S&P sectors declined Friday. Retail continues to limp along, at least the laggards in the group, with names like M which slumped 7% this week and is now 57% off most recent 52 week highs, without a 2:1 split. MAT lost more than 12% this week and down 57%, like M, from its own 52 week highs. JCP bled lower to the tune of 13.6% this week and is off 71% from most recent highs and the possibility of that going to the round zero number.

The semiconductor group was on a rollercoaster this past week with a tremendous amount of earnings being brought forth. There were some real surprises, to me the largest on the downside was UCTT losing more than a quarter of its value this week on the largest weekly volume in at least 5 years. AMD surrendered 14.3% this week, but of course there were some bright surprises with weekly gains of 9.8% from INTC and 5.7% from MKSI, with INTC on a 9 week winning streak and MKSI seven. Below is the chart of spinoff play FTV from DHR and how it appeared in our Friday 9/29 Game Plan. It is a less followed name in the equipment testing space of the sector, but like many leading names it formed a bull flag after a very healthy run. Thursday evening it reported earnings and today it bounced precisely off the round 70 number, recording a big reversal as well as retesting successfully a bull flag breakout and now sits at all time highs gaining 8 of the last 9 weeks. Admire its very taut trade overall with the exception of Friday.

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