Markets reversed hard from intraday highs today, but it was really the Dow that was very firm early on, as the Nasdaq, S&P 500 and Russell 2000 were higher marginally so. When money flocks to the big caps it is one of the traits of an aging bull. The Nasdaq was pummeled and showed no follow through at all from Mondays robust session. It gave back a big chunk of Mondays 3.3% gains and today was the fourth consecutive 2% move for the tech rich index, the first time since October 2011. It has lost ground 8 of the last 11 days, and 9 of them CLOSED in the lower half of their intraday range. Recently it was the troubles of FB that wounded the index, and it still is, now 22% off most recent 52 week highs. Today it was joined by the negative action in NVDA, which slumped below its 50 day SMA for the fourth time since last November. It reversed just 2 pennies below the very round 250 number once again and lost almost 8% Tuesday. The VIX bounced off the very round 20 number today and the volatility seems to be here to stay for awhile.
Looking at individual sectors it was the boring utility and staple sectors that made their presence felt as they were the only major S&P groups to finish up or near UNCH. The XLU rose 1.4% scoring its second highest CLOSE since the last day in January, and its 50 day SMA should begin to incline soon. It was its first CLOSE above the very round 50 number int he last 7 days, and 5 of the 6 were above intraday. The XLP fell 2 pennies Tuesday and it was the flip of Monday as the financial, cyclicals and technology that lagged. Technology via the XLK fell 3% meeting resistance at the 50 day SMA which is starting to flatline, recording a bearish engulfing candle. It is now down 9 of the last 11 sessions and would have been 10 out of 11 if it were not for the fractional four penny gain on 3/15. The ETF is still making higher highs and lows but now sits 9% off most recent 52 week highs and slashing its 50 day SMA for the second time in as many months has the bulls on the defensive.
The bullish ascending triangle is a pattern I have been seeing more of recently as leading names are making higher lows, but unable to pierce above a top horizontal line as names try and overcome the recent market malaise. The ones that break above could very well be your future winners. Below is a chart of a telecommunication technology play HRS and how it appeared in our Wednesday 3/14 Game Plan. It has doubled over the last 2 years after moving off the round 80 number. The name is now higher 6 of the last 9 weeks and has advanced 3.8% this week already. It was having issues CLOSING above the round 160 figure with SEVEN days trading above 160 intraday since the 1/31, but zero CLOSES above until the first two days of this week (today reversed recording a bearish dark cloud cover candle however). The 160 number also served as a breakout above a bullish ascending triangle, which if it could hold here has a measured move to just underneath the round 180 number.