Markets rejoiced Thursday with the Dow, S&P 500 and Nasdaq all higher between .7-.8% and all going out strong into the end of the session. More importantly was the action in the Russell 2000 screaming to an all time higher gaining 1.7%. The benchmark is often an indicator of future strength and a look on its chart shows the RSI just barely CLOSING above the 70 level, which suggests it still has room to run as this index touched the mid 80 last October. For the week, with one day left, the major averages are posting pedestrian gains of 1.1, 1 and .9% for the Dow, Nasdaq and S&P 500 respectively. The transports continue to put on a show now on a seven day winning streak and today the IYT drove right through the very round 200 number, pun intended. The ETF is now higher by more than 6% YTD and yet another space that just points to a energetic economy going forward.

Looking at individual groups its the same old story with energy outperforming and utilities underperforming. The trend is your friend. The XLE rose more than 2% Thursday and the magnetic pull toward the 78.55 cup base trigger we have been talking about incessantly is getting stronger by the day. The rally today was very strong with 7 of the 9 major S&P sectors gaining, and four rose 1.3% or more, and just two falling. The staples and utilities lost .1 and .4% respectively and that looks pretty uniform on a weekly basis too. Headed into Friday they are the only two sectors for the week underwater as the XLP is lower by .5% and the XLU by 1.5%. The XLU has now dropped 14 of the last 19 sessions and is now just above the very round 50 figure. It is looking for its fifth weekly loss in the last 6 with awful volume trends and if tomorrow CLOSES near here, will make all 5 finishing right at the low for the weekly range. The most powerful group so far for the week are the XLE and XLI both higher by 2.3%.

The financials have been very strong, with the XLF up 7 of the last 8 sessions and by 2% this week already headed into Friday. Keep in mind the ETF posted a 1.8% gain last week and a 5.1% jump the week ending 12/1 on double average weekly volume. If this group is not under accumulation I am not sure what the definition of the word is. Sure there will be some big earnings reports with JPM and WFC delivering tomorrow morning before the open. The group is very diverse and asset managers have been doing well, and so to have the credit cards name like MA, V, DFS and AXP. Not to be one to miss a party below is the chart of COF and how it appeared in our Monday 1/8 Game Plan. It had a few things going for it, one being the nice action POST breakout from a 9 month cup base trigger. We know the best breakouts tend to work out right away. It also failed to be intimidated by the very round par number which names are likely to do. The bull flag measurement still has 10 handles left, although I could not blame investors wanting to wait for a little weakness to enter.

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