Markets screamed higher Friday to end a powerful week after a well received jobs report. One has to come away impressed as often the initial reaction off a big jobs report is faded but today momentum kept proceeding. The leading Nasdaq led with a gain of 1.8%, its third straight Friday gain of more than 1%, as 2/23 and 3/2 added 1.8 and 1.1% respectively. It is now on a six session winning streak, and all 6 days CLOSED at the top of the daily range and Friday hit all time highs. The Russell 2000 acted fine and rose by 4.2% on a weekly basis, equal to that of the Nasdaq, and now has the look of a deep cup base with a potential breakout trigger of 1615. We will continue to keep a close eye on the VIX as it CLOSED below its 50 day SMA for the first time in nearly 2 months. To be fair the last 2 sessions did finish well off the intraday lows, and recorded bullish hammer candles. The bears are clinging onto this fact and it is shaping the look of a bullish falling wedge. Remember it is not necessarily a crime to CLOSE below your 50 day SMA, especially if it is upward sloping, but it must keep a close distance and try to recoup it in a rapid fashion. Next week should give some valuable clues to its direction.
Looking at individual sectors to end the strong week it was the financials, industrials, energy and technology the showed the way. The XLF rose 2.4%, the XLI by 2.2%, and the XLE and XLK rose by 1.9%. The XLE has to be respected for the fight it is putting up at its 200 day SMA which is still rising as its 50 day SMA is doing the opposite. Lagging were the defensive group as the utilities and staples were clearly laggard with the XLP up .6% while the XLU added just .3% on such a strong session. On a weekly basis it was almost exactly the same with the financials and industrials both posting a 4.4% jump and technology rounded out the top 3 with the XLK up 4.2%, all very respectable gains. The staples and utilities lagged on the weekly returns added 1.6 and .9%. The real separation is seen on the YTD basis as the XLK is up better than 10%, cyclicals by 7.6 and financials by 6.4% and showing big relative weakness is consumer staples, energy and the utilities LOWER by 4, 5.3 and 6.2%. The obvious lesson, know your sector.
At ChartSmarter I am always looking to uncover hidden gems. It is not easy and quite frankly there just are not any to report, but with hard work they can often be uncovered. Many times they will come in the form of new issues or spin offs, and some come back from the dead. It is rare but PRICE action will put you on the right path. Below is the chart of QNST and how it appeared in our Thursday 3/8 Game Plan. The marketing name popped up on my radar after clearing the very round 10 figure last November-December, but no WEEKLY CLOSES above. It finally did so the week ending 2/2, which soared by more than 28% in the heaviest weekly volume in the last 5 years. After such a huge run, one who missed the initial move would want the name to trade sideways. That is exactly what this stock did creating a bull flag that which was taken out today rising more than 6% in active trade. Look for a move toward 17 in the near term.