Markets once again finished well off session lows, but again lacked achieving much headway. The Nasdaq which at its worst slipped more than 1% in the first half hour ended up down .5%, a lukewarm showing. It just feels uneasy, heavy, but making investment decisions based on gut feelings are very hazardous and should never be done. Almost feels like a game of musical chairs is taking place and the end of the game is almost upon us. On the bright side, give the tech heavy benchmark credit as it has CLOSED at or in the upper half of the daily range the last 6 days, albeit today fractionally so. Sure it would be nice to see a 1% advance in firm trade and it may just do that soon as the markets do a very good job to confound the most. The Russell 2000 recorded yet another bullish hammer candle, but again finished underneath its 50 day SMA for a second straight day, but did register a successful retest of a cup base breakout above 1452 taken out in September.
Looking at individual sectors it was the groups that have been sturdy lately that took a pause, that being the staples and utilities. The only space that acted worse was energy as its spillover continues, pun intended. The XLE lost 1.1% and for the week is off 3.3% and if that holds would be its worst week so far in ’17 (has the look of a weekly bearish evening star pattern too). That is exactly the opposite type of action you do not want to see after a recent breakout, as the best ones tend to work out right away. The XLU and XLP fell .9 and 1.1%, and although the XLU is still above its recent cup base breakout trigger of 56 it did record a bearish dark cloud cover candle today, at all time highs. Acting well today were the financials with the XLF gaining .25%. The ETF is spooning its 50 day SMA not long after a flag breakout on 10/20, but is below the 26.50 pivot.
On soft sessions like Wednesday it can pay future dividends to see which names acted well in the heat. Sure there has been a push toward more defensive names, and trends can last longer than we think as we know. Below is the chart of TSN which we profiled in our Wednesday 10/25 Game Plan. The name is on a 4 session winning streak and has advanced 13 of the last 18 weeks, and perhaps even more impressively has gained 2.8% this week heading into Thursday. Leading names will often give investors a few chances to get in on the way up and Tyson is no exception. The flag breakout has a measured move to the 80 number, but a look on the weekly chart shows a 14 month cup base pattern now with an add on above a 77.15 trigger in a pattern that began the week ending 9/9/16. A move above that pivot would achieve an all time high and make for a tasty trade, pun intended.