Markets ended up a topsy turvy holiday shortened week in a strong fashion as the major benchmarks all went out on their highs, even as the government shutdown went unresolved as of this writing. The Russell 2000 was the star of the show as it gained 1.3% finishing just shy of the round 1600 number. For the week it lagged however rising by just .4%. The Dow, S&P 500 and Nasdaq all advanced in the 1% neighborhood for the week. I still feel that the bearish candles from Tuesday will have meaning in some way shortly, but that is just conjecture. The weekly candles have more importance than daily ones and all three of the aforementioned indexes have something for both the bulls and bears. Each one of them could be viewed as recording bullish hammers or bearish hanging men. We always stress PRICE action itself it much more meaningful than anything candles, and a great example would be with the DOW that registered consecutive weekly doji candles the weeks ending 12/22-29, and still proceeded higher the last 3 weeks by more than 5%.
Looking at individual sectors Friday it was the staples that came away the winner as it was the only major S&P sector to advance more than 1% with the XLP up 1.1%. It cleared a bull flag trigger of 57.50 on Wednesday and todays follow through was very impressive. The ETF now has a measured move to 63. Discretionary was the second best actor Friday with the XLY adding .9% and has gained 10 of the last 11 weeks with very firm volume trends, as the last distribution week ending 6/9/17, more than 7 months ago. The utilities continue to soften and they were the laggard today with the XLU off .3% and CLOSING one penny below the very round 50 number. On a weekly basis there was bifurcated action with 6 major sectors up and 3 down. The best behaved were the staples as the XLP rose 2.4%, with the runner up being healthcare as the XLV rose 1.9%. Energy was the worst actor as the XLE lost 1.3%, but it could be forgiven as the four weeks before that all advanced and added more than 13% over the time frame. Look for a resumption of the uptrend to continue shortly.
Retail names have been acting impressively even in the midst of a crude recovery. It is an unusual correlation, but remember PRICE alone supersedes all other indicators. The XRT is narrowing in on a huge WEEKLY double bottom breakout trigger of 48.36 that began the week ending 4/3/15, and its pivot was created the week ending 12/9/16. Consumers have been feeling jolly now for sometime and their spending habits are showing. Best in breed names like VFC RL and BBY are all up more than 8% thus far in ’18. WMT is about to record its third weekly CLOSE above the very round par figure as well. Below is a name that has been taken private and went public again, MIK, and how it appeared in our Wednesday 12/13/17 Game Plan. It blasted above a bull flag trigger of 22.30 on 12/19 and has nearly achieved it measured move to 27. Of course the 27 price target it just a guideline and not science, and we think this can continue higher as it builds the right side of a long cup base that began the week ending 6/10/16 with a 31.47 trigger.