Markets ended the week Friday on somewhat of a damper as the Dow and Nasdaq reversed almost precisely at their now downward sloping 50 day SMAs. The Nasdaq recorded a bearish engulfing candle and the only of the top 4 indexes I watch closely, the Russell 2000, was unable to make it a perfect 5 for 5 up week, but did CLOSE above its 50 day SMA. The Nasdaq is facing some headwinds as one of the big giants, FB is now contending with a “throw back” into a bearish head and shoulders breakdown that aligned with the round 170 number. To be fair it nearly met its measured move to the 145 area, but many will be watching that name intently. GOOGL still remains 14% off its most recent 52 week highs, and has been finding support at the very round 1000 figure since filling in a gap their on 12/5 from the 10/26/17 session (in fact it has recorded zero CLOSES below 1000 in 2018 even though 6 sessions have been underneath intraday). AMZN now has the look of a bear flag and both of these aforementioned names have Washington in their crosshairs at the moment. The thing that caught my eye Friday was the VIX, falling almost 6% as the major averages did give up ground and it is now on a 4 session losing streak and well below its 50 day SMA and the round 20 number, which had been holding firm. For the week it overall had the feel of health as the Nasdaq and Russell 2000 were higher by 2.8 and 2.4% and the Dow and S&P 500 added 1.8 and 2%. On a YTD basis so far the Nasdaq still commands the lead up 2.9% and the Russell 2000 is up .9%, and the S&P 500 and Dow are lower by .6 and 1.4%.
Looking at individual sectors Friday it was once again the energy space that lit up the leaderboard with the XLE advancing 1.1%. The only other major S&P groups to gain ground were the utilities and staples as the XLU and XLP added .8 and .5% respectively. These stubborn defensive areas have been hanging around on a consistent basis long enough to begin to annoy the bulls. Lagging were the sectors bulls want to see participate heavily, with technology, cyclicals and financials falling as the XLK, XLY and XLF dropped .3, .6 and 1.5%. On a weekly basis it was energy again that impressed the most gaining 6%, nearly doubling its second best competitor in technology as the XLK advanced 3.5%. It was the second straight week energy was the top performer, although the XLE fell by .1% the week ending 4/6. One area to keep an eye on is the cyclicals as the XLY has CLOSED very tight, with the last 4 weeks all ending within just 1.1% of each other and to its credit it has finished above the very round 100 number every week this year even though the weeks ending 2/9 and 3/30-4/6 were all under par intraweek.
We have discussed the importance of the consumer propping up retail in general, and it does not apply to just clothing names. It includes casual diners. the group has been bifurcated and in recent years has seen M&A activity with PNRA being taken out. CMG has been a laggard off 36% off most recent 52 week highs even though it has recorded a decent run as of late although the last 5 weeks have CLOSED at or within the lows for the weekly range. One can consider BRJI and WING winners, and below is another leader in the space TXRH and how we profiled the stock in our Friday 4/6 Game Plan. It is now on a 3 week winning streak and registered its second consecutive weekly CLOSE above the round 60 number. The stock broke above a bullish ascending triangle and demonstrated good relative strength Friday as it rose by 1%. It is taking on the look of a bull flag and a move through 62 can be purchased with a measured move to 68.