Markets displayed some volatility Wednesday after the Fed announcement at 2pm, but at the end of the day the action was subdued. There was certainly movement in the late afternoon but the finishing prices were pedestrian. Except for the Russell 2000 which we have mentioned will be our guide along with the VIX. It produced a jump of .6% and looks like a handle on its current cup base is shaping up nicely. The Nasdaq lagged as AAPL, the 800lb gorilla in the tech space, fell by 2.1% and is now down 6 of the last 7 days. FB travails continue as it is lower by 9% this week so far and to consider the action of those two behemoths the Nasdaq being just 4% from recent all time highs is somewhat admirable. The S&P 500 reversed Wednesday after coming very close to its 50 day SMA and has spent more time below its 50 day SMA than above it since early February. The VIX recorded a bullish hammer today to CLOSE above its rising 50 day SMA, and the 15 number continues to be defended strongly recently. It is in no mans land here between 15-20 where it has roughly traded for the last 5 weeks. A break in either direction will likely give some foreshadowing for the markets near term.

Looking at individual groups it was energy that led for a second consecutive session with the XLE advancing 2.7%, again a lagging sector but perhaps trying to make a legitimate move higher. It was aided by data released today, and we would prefer to see big moves absent of news. That being said the price action suggests possible continued upside, as it is now breaking to the UPSIDE above a bearish head and shoulders formation and we know moves that break in the opposite direction of how they should, could be very powerful. Lagging were what one would expect to see in bull market behavior with the utilities and staples, both lower by .4 and 1.1% via the XLU and XLP. Rounding out the bottom four was technology unfortunately as the XLK dropped .5%, and it is now on its first 4 session losing streak since last December.

The staples woes do not seem to go away as the XLP hit a new fresh 52 week low today and the ETF now rests 12% off most highs. It is now on an 8 session losing streak, reminiscent of the 7 of 8 day slide between 1/29-2/8. Big names in the fund like PG is now 19% off its most recent 52 week highs. Many pundits in various roundtables at the beginning of 2018 pointed out to avoid staples and utilities and they are proving correct thus far. Below is the chart of another staple heavyweight GIS and how it appeared in our Thursday 3/8 Game Plan. The stock is has now lost more than a quarter of its value down 25% from most recent 52 week highs and has declined 9 of the last 12 weeks. For the technician it does not make much sense to hold this name even with a 4.3% dividend yield. Capital preservation trumps all.

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