Markets ended Friday lower going into a holiday shortened week and it was the Russell 2000 that captured traders attention today and for the week. The small cap benchmark rose .4% today and demonstrated nice follow through after Thursdays climb back above the 50 day SMA. For the week it outperformed the big three advancing 1.2%, followed by the Nasdaq rising .5% and the S&P 500 and Dow falling .1 and .3% respectively. On the Russell 2000 daily chart the 1510 level which was a prior bull flag pattern has now morphed into a double bottom, so key an eye on that level into year end. The Nasdaq had brief spurts into the green today, but the potential 10 Friday winning streak was not to be, but give credit for the fractional .15% loss after Thursday 1.3% gap higher. And it was the second gap up, rare for an index, in the last 3 weeks which is saying something. All the warnings from high yield last weekend, went away rather quietly toward the end of the week after Wednesday bullish counterattack candle. Volume was strong this week as the HYG rose .4%, but that cut in less than half of the prior weeks 1% drop. Perhaps its a bit early to take it off the crowded wall of worry list.
Looking at individual sectors today energy and cyclicals led the way, with the XLU and XLY up in the neighborhood of .5% and lagging somewhat surprisingly were technology and the utilities. A look on the XLK weekly chart however shows constructive action as this weeks slim loss of .2% ended a 7 week winning streak, but has set up a nice 3 week tight pattern as the last three have all CLOSED within just of 15 cents of each other. Looking at all the groups on a weekly basis moves were somewhat muted with just 2 of the 9 major S&P sectors gaining or losing more than 1%. Glaring was the XLE slumping 3.2% and bulls have to dig in right here. The industrials, via the XLI, have now registered their first 4 week losing streak in 18 months, and the combined of muted drop of 3.5% almost equals the XLE weekly loss, and bulls can point to volume each of the last 4 weeks being lower than the average. The XLV is taking the look of a bearish head and shoulders pattern here and the right clavicle has formed below the 50 day SMA which is beginning to slope lower.
The defensive staples and utilities groups are not the only spaces that have been acting well as of late (the XLU did rise .5% this week but did record a bearish shooting star candle at all time highs). We have all read about the need for protein as the population will keep growing at very rapid clips internationally, and many around the world will enter the middle class and will look to step up their diet. We spoke last week of the strength in TSN and this Thursday it broke above a 77.15 cup base trigger in a pattern 14 months long. Below is the chart of peer PPC and how it was profiled in our Thursday 11/2 Game Plan, and it is always important to make sure fellow competitors are acting well and you name is not the only one in the group carrying the heavy load. PPC is now higher 16 of the last 19 weeks and perhaps most impressive was this weeks gain of 1.4%, AFTER the prior week screamed higher by 10%. It has now sprung clear of the round 30 number and this name is behaving anything but conservative and has traveled half way now to its measured move.