Markets all finished well into the green today with technology leading, as the Nasdaq did record its 8th consecutive Friday advance rising by three quarters of 1%. Of course AAPL had a lot to do with that as it now higher by more than 10% the last 2 weeks and gained 2.6% after reporting earnings Thursdays afternoon. Technology on a weekly basis is demonstrating good relative strength, as for the second straight week it performed better than the S&P 500 and Dow with the week ending 10/27 bested the other three rising 1.1%. Friday did see a bit of divergence in the small caps with the Russell 2000 falling fractionally by .1%, but on the weekly look it lost a glaring .9%. The flag that has been talked about incessantly is becoming long in the tooth, but time is letting the rising 50 day SMA catch up, currently just 2% from todays close. This was the small cap benchmarks first weekly CLOSE below the round 1500 number in the last six, and lets see if that is just a bear trap going into year end.
Looking at individual groups Friday healthcare and technology shared the top spot as the XLV and XLK both rose by .8%. The only sectors that fell among the major S&P group were the cyclicals, materials and financials. The XLK is just taking a well needed pause after a recent flag breakout and has traded very taut with the last 11 sessions ALL trading within an intraday range of just .43. On a weekly basis there were two notable standouts with energy, via the XLE, adding 2% and the XLK advancing by 1.5%. There is something for both the bulls and bears to feast upon with that data as the bulls can justifiably state it is very healthy to have tech lead, and the bears will state that energy showing its might is faulty leadership.
As we have mentioned “old tech” names have really began the flex their muscles. INTC for its normal slow moving self seemingly has gone parabolic, and is on a current 10 week winning streak and higher by almost 14% the last 2 alone. The last 2 weeks have also both traded more than 200 million shares, a feat not seen in almost 2 years dating back to the week ending 1/15/16. VMW has advanced 14 of the last 18 weeks and MSFT is on a 6 week winning streak of its own and this week added fractionally AFTER the prior week rose by more than 6%. As always is the case there will be some exceptions with JNPR stinking up the joint, down 21% from most recent 52 week highs. Below is the chart of IBM and how it was profiled in our Friday 11/3 Game Plan. The earnings related euphoria lasted just a couple of sessions after 10/18, and it has given back more than 6.5% the last 2 weeks. It is lower 8 of the last 10 days and has plenty of room yet to run before its measured move is completed.