Markets showed nice strength Wednesday, and again it was good to see the Nasdaq outperform as it rose 1%, and for the fifth consecutive session CLOSED in the upper half of the daily range. The tech heavy index, is now on a four day winning streak, its first such move since a 7 day streak between 3/2-12, which was abruptly ended at all time highs the next day with a nasty bearish engulfing candle on 3/13. The Russell 2000 is now comfortably ahead of a symmetrical triangle breakout trigger of 1585, and the measured move is another 170 handles which would be more than 10% from here. It was interesting to see the S&P 500 climb back above its 50 day SMA today, but being stopped right at the very round 2700 number. The VIX lost more than 7% Wednesday and is now resting upon its upwards loping 200 day SMA, but well below its bearish descending triangle breakdown trigger of 15.
Looking at individual groups it was once again it was energy that impressed the most as accumulation continues. The XLE rose 2%, just its seventh such move in 2018, and the best gain was the 4/10 session that rose 3.3%. The latter broke above its 50 and 200 day SMA, after spending almost 10 weeks below the 200 day. It also broke above a 3 week tight pattern as the last 3 weeks all CLOSED within just .55 of each other and that type of action can lead to very powerful moves. It was good to see the financials act well with the XLF being the second best performer with a gain of 1.5%, and the materials rose by 1.4%. Showing how broad the rally was it was technology and industrials rounding out the top five with a gain of 1.2 and 1.1% for the XLK and XLI. Perhaps even more bullish was the groups that were shunned today as the two worst acting sectors the staples and utilities both lagged with the XLP up .1% and the XLU falling .7%.
The finnies overall have not been swimming very smoothly upstream. The XLF however is showing some sign of life as the ETF is on its first four session winning streak in three months. Bulls would like to see more volume however as the last accumulation week ending 12/1/17 rose by more than 5%. It is lower 8 of the last 14 weeks after being stopped near the round 30 figure in late January and early February, but is up 2.9% this week so far. Of course the financial universe is very diverse and below is a chart of a broker IBKR and how it appeared in our Monday 5/7 Game Plan. It is on a current 6 week winning streak and adding another 5.6% this week headed into Thursday. This name tends to be streaky, and when it does the moves can be very rewarding last witnessed by the 29 of 34 week winning streak the weeks ending between 4/21-12/8/17. It recently broke above a bull flag trigger and the measured move is to 87.