Markets put in a lukewarm week with the Dow rising .4% recording a somewhat bearish spinning top candle, but is higher 13 of the last 16 weeks. The S&P 500 rose .35% and is also higher 13 of the last 16 weeks. The Nasdaq did fall .1%, falling for a second straight week, but both weeks managed to CLOSE in the upper half of the weekly range, as bulls try to absorb any selling pressure. The Russell 2000 which is often a good indicator recorded a doji candle, some may argue a gravestone doji, but it was not registered at all time highs. The bulls get the benefit of the doubt with the burden of proof argument and perhaps the second half of December strength will arise. Will that expected development turn into the January effect which became irrelevant as investors began to anticipate the strategy. The VIX fell below the round 10 number and the UVXY fell beneath the round 10 number after finding nearly precise resistance at the 20 figure the week ending 10/27. The levered ETF was close to the round 10000 number in September ’15 and just CLOSED at 12. If one does not adhere to stops one will be devastated. Protect your capital. There is no similarity to BitCoin here but whatever instrument you engage in respect your well earned money.
Looking at individual groups it was a decent session Friday as all of the nine major S&P sectors gained ground (the materials via the XLB finished UNCH). The best actors were the healthcare and energy arenas with the XLV and XLE rising 1.1 and .9% respectively. More importantly for the week there was some expected bifurcation with five of the S&P sectors rising and four falling. The two best performing groups doubled the gains of the second best actors. The financial and industrials both rose 1.5% and bullishly scored these gains of powerful advances the week before. The XLF rose 5.2% and the XLI 3.1% the week ending 12/1. Seeing that type of follow through in critical areas has the bulls resting a little more comfortably this weekend. Honorable mention goes to the staples as the XLP is now on a current, yet gradual 6 week winning streak up 6.4% in the process and is its first such streak since the weeks ending 2/12-3/18/16. The laggard for the week was the utilities with the XLU ending a 9 week winning streak falling 1%. The ETF for those concerned is still buzzing just 2% off most recent 52 week highs.
The materials group has been showing backbone, pun intended, as the metals groups heat up, mostly the steel and aluminum plays. The XLB is still trading around a 59.72 cup base trigger that it was above intraday four consecutive days between 11/30-12/4 but was never able to CLOSE above it. As well it is dealing with the round 60 number and this should resolve this sometime before year end most likely. The chart of EXP below is an intriguing one as it has its tentacles in some interesting spaces. First it supplies to the homebuilders which has been firing on all cylinders and it does participate in the oil and gas arena and we know how energy has been in a real tug of war between bulls and bears recently. Here is the chart of EXP and how it appeared in our Friday 12/1 Game Plan. It recorded a stellar week advancing 4.3%, on top of the prior weeks 4.8% gain, both coming in active volume. Look more continued upside.