Markets put in yet another lukewarm session Wednesday, with the Dow almost putting up another triple digit gain, which would have been its third in the last 4 days. Of course on a percentage basis it is not that impressive anymore in the mid 20000’s. Somewhat encouraging was to see technology join the fray with the Nasdaq gaining .2%, but it ended up with a bearish shooting star. It continues to act bashful near the round 6900, coming within less than 5 handles today alone, recording just one CLOSE above on 11/28. Leading today was the Russell 2000 which added .5% putting in a bullish engulfing candle, which are better seen at market lows. For the fourth consecutive day investors witnessed a higher lower tail as it was unable to hold on to the best of their intraday gains, something for both the bulls and bears to chew on. The S&P 500 finished the day near the UNCH with all of its intraday gains evaporating and it too for back to back days recorded bearish shooting stars.
Looking at individual sectors it was a pretty broad rally with 7 of the 9 major S&P sectors gaining ground with just the energy and financials falling. The XLF lagged badly falling 1.3% and now is DOWN .5% on the week as it looks for its first 5 week winning streak of 2017. The XLE fell fractionally and it feels like the ETF has the beachball held underwater scenario and IF it can CLOSE above the round 70 number should see some healthy appreciation. Leading Wednesday were an assortment of somewhat defensive groups with the staples and healthcare among the top 2 of 3 performers. In the staples space keep an eye on COTY as it approaches the very round 20 number. It has encountered firm resistance there since last November several times (registered one weekly CLOSE above 20 the week ending 7/28 but was quickly thrust back below) and it has gained 4 of the last 5 weeks and is up 9.2% this week so far.
The retail group is one that has just recently seen investors flock back into. Is it the beginning of a true turnaround or just a short squeeze? If it is the latter then it is becoming very long in the tooth, and the bears are getting a little tired of trying to justify their stance and running out of excuses. The name below, EL and how it appeared in our Wednesday 11/8 Game Plan, never wavered while the space seemed to be under constant assault as it seemed each stock was subject to AMZN spells. That was a good tell as it now trades right at all time highs and it has advanced 18 of the last 22 weeks and this week headed into Thursday has tacked on another 1.8% (none of the 4 weeks lost more than 2%). The stock broke above a bull flag trigger of 122.50 on 11/8 and still has 6 handles left of an upside measured move. It is no accident that rivals are being left in the dust with SBH, ULTA and ELF all off 40, 32 and 32% respectively from their most recent 52 week highs. EL’s complexion is indeed looking rosy, pun intended.