Markets were somewhat bifurcated Wednesday as the Dow lagged off .9%, which is kind of misleading as 27 of 30 of its stocks were lower. The S&P 500 fell .5% and the Nasdaq by .4%. Interestingly enough it was the Russell 2000 that was HIGHER by .2% as it CLOSED above its 50 day SMA for a second straight session. Remember the index is a leading indicator and shows investors have an affinity for risk appetite, but I wonder if people want to be a bit more domesticated and put their capital to work in stocks that have nearly all their revenue derived here in the US. Another head scratcher was the VIX which fell today as the big three obviously did as well. One would think the threat of missile attacks would have sent this instrument higher in a meaningful way, but to its credit it still CLOSED above the very round 20 figure after being underneath it intraday. The markets continue to confound the most as they always have and will continue to do so.
Looking at individual sectors it was the energy group that shined Wednesday as it was the XLE which was the only major S&P group to gain ground rising 1%. I am not a conspiracy theorist in the least bit, but perhaps this space broke out recently as it was aware of impending conflict in the Middle East. If it did breakout on that I would be somewhat skeptical of the move, since I like to see boring, generic, non related news events move markets. That being said the price action is impressive as heading into Thursday the ETF is higher by 4.8%, and if that holds would be its best weekly gain since the 5.5% jump the week ending 4/22/16. Rounding out the top three were the usual defensive areas as the staples and utilities fell by .2 and .1%. Lagging today were the financials and healthcare as the XLF and XLV fell 1.3 and .8% respectively.
The retail space has been feeling upbeat with the prospects of continued economic growth and consumer confidence on the rise. The tax cuts did not hurt and some stocks have been showing the benefits. Below is the chart of ETSY and how it appeared in our Friday 4/6 Game Plan. The stock one year ago was trading in the single digits briefly the week ending 5/5/17 which roared 20% off intraweek lows to CLOSE firmly above 10. It has since tripled with todays finish above the round 30 figure and acted well on a poor tape as well Wednesday. It is higher by more than 9% this week so far and looking for its third double digit weekly increase so far in 2018. The stock broke above a bull flag trigger of 29 on 4/10 and now looks like it wants to challenge all time highs made back in its first week of trading almost precisely 3 years ago, carving out a potential add on cup base trigger of 35.84.