Markets looked good as the Dow rose .5%, as the higher priced names in the benchmark supported a 119 handle move higher. BA rose by 2.3% today as it races toward to the round 300 number, and is up nearly a double over the last one year period. GS gained 3% Tuesday as the stock broke above a cup base trigger of 255.25 in a pattern 9 1/2 months long. The Nasdaq dropped .2% ending a 4 session winning streak as software names lagged. Semiconductors did not help much with the SMH slipping 1% and the very round par number looks as if it is going to be difficult to overcome in the near future. The longer the ETF swims below its 50 day SMA, the more bearish the narrative becomes. Volume has accelerated as prices weighs, and it is looking at just its second 3 week losing streak since the weeks ending 6/10-24/16. The S&P 500 rose .2% and the Russell 2000 fell by the same amount.
Looking at individual sectors there was some clear bifurcation with interest sensitive groups acting in clearly different fashions. It was the financials which continue to skyrocket as it has added another 1% this week so far after the previous two tacked on nearly 7% in energetic volume. The ETF has gained nearly 50% since early November after the election when it blasted above the very round 20 number the week ending 11/11/16. At the other end of the spectrum you have the utilities falling with the XLU off by 1.6%. The ETF is dealing with bearish candles recording a dark cloud cover on 11/15 and then an engulfing candle on 12/1 at lower highs. It is just 3% off most recent 52 week highs, but there are some serious laggards in the space and that could be a real tell going forward for those particular names like SCG, which is now lower by 43% from its most recent 52 week highs.
We continue to pound the table with best of breed names preferably in sectors that are already in uptrends. If not it is best to keep a list of the generals in the space, for when the group comes back into vogue they will normally be the first and strongest of participants. Keep in mind as the overall markets have had another robust year with the S&P 500 up 19% in 2017 for example, there are a plethora of stocks that have performed much better. That is the difference between average and great investors, the ones that can generate alpha. Below is the chart of WING and precisely how it was profiled in our Tuesday 12/5 Game Plan. The casual dining leader traded sideways during a bullish inverse head and shoulders pattern for one year between August ’16-’17 before breaking out from a 33.50 trigger the week ending 8/18 and did capture its measured move to 42 now (not seen on chart below). The chicken play has now moved above a bull flag trigger of 40.75 and could fly toward the round 50 number, pun intended.