Markets registered lukewarm gains Thursday as the Nasdaq followed through in a mild fashion, up .5%, after Wednesday’s bullish engulfing candle. Volume was constrained, and for the week the tech rich index is lower by .5% headed into Friday, and if that holds would be a second consecutive weekly loss. It was helped along by the semiconductors with the SMH rising 1%, but looks like a brick wall may be tough to get through on the upside at the very round par figure, which would also be a test of a broken 50 day SMA. Biotech’s also helped as the IBB rose by 1.4%, but still resides 9% from its most recent 52 week highs. The Russell 2000 was a bright spot, gaining .7% as it recorded its own bullish engulfing candle at its 50 day SMA, ending a 4 day losing streak. Both of the aforementioned benchmarks are doing the right thing so far, quietly finding support at important levels. Nothing flashy, just responsible action.
Looking into individual sectors it was the industrials that led the way with the XLI higher by .9% and it is now nicely above a 73.30 cup base trigger taken out on 11/30 and retested yesterday and held firmly. It now has the look of a bull flag formation and a CLOSE above 75 would give it a measured move to the round 80 number. The airlines were a big part of their outperformance Thursday as the JETS ETF has gained 8% during its current 3 week winning streak and has added 2% this week headed into Friday. The laggards hailed from the conservative utility, healthcare and staples groups. The XLP was a real weakling falling .9%, but volume was subdued and it is still above a double bottom trigger of 56.04 taken out on 11/30. Technology via the XLK is on a 3 session winning streak, but still DOWN for the week thus far by .3%, courtesy of Mondays 1.6% slide. Trade has fallen with each successive session during this streak, and the bulls would be happy going into the weekend if that could change tomorrow.
The longer retail continues to firm up the greater the belief that the move is simply a dead cat bounce. Is it foreshadowing consumers feeling more upbeat, or an economy that will keep growing? Who knows and who cares. The PRICE action in some of these names is telling you what one really needs to know. We have witnessed some excellent earnings reactions to support the bull mode theory with LULU, DG, GIII and VRA all up handsomely this week thus far. Of course you will have laggards, that will keep that moniker, and that includes ASNA and DLTH which are both LOWER by more than double digits this week after reporting and are way off their 52 week highs with ASNA down 76% and DLTH 57%. Below is the chart of ETSY and how it appeared in our Wednesday 12/6 Game Plan. The name is approaching the very round 20 number and has advanced 12.6% this week so far, already on double average weekly trade with one day still to go. It would not surprise me to see this name gravitate toward a 29 cup base trigger that began the week ending 4/24/15 sometime in 2018.