Markets turned modest gains into small losses Thursday, yet once again the Russell 2000 which is often seen as a leading indicator led advancing .55%. It is often said in technical analysis circles that the best breakouts tend to work out right away, and the follow through witnessed today after Wednesdays break above an ascending triangle is certainly encouraging. One could make the argument that when trade talks make headlines in the press, like they did today, investors are bringing their capital back home where the Russell is domestically focused. The other major three benchmarks finished neat the UNCH mark. For the week heading into Friday all three of the aforementioned benchmarks are lower, marginally so, with the Nasdaq and S&P 500 down .3% and the Dow by .5%. The Nasdaq is looking for its first 3 week winning streak since the February correction, so that could be a nice psychological boost if it can manage a gain tomorrow of .4% or better. Talking about breakouts working out in a prompt fashion the ten year edged ahead again Thursday after the bull flag breakout, yet todays spinning top candle may see a pause in the move northward.

Looking at individual groups their was some clear bifurcation as energy which just does not seem to want to stop drilling higher, pun intended. It was the best acting group by a long way, as the industrials were the runner up as the XLI rose modestly by .4%. The XLE was higher by 1.5%, where technology and utilities lagged with the XLK and XLU falling by .5 and .8%. I never discredit PRICE action but perhaps the group is getting somewhat frothy here just from the standpoint the some real laggards have been on a tear. Take CHK for example which is still 27% off most recent 52 week highs, but has rallied by a third of its value this month alone. The cyclicals were hurt somewhat today as the XLY lost .3%. The largest component in the ETF AMZN continues to shy away from the round 1600 number and HD the second largest member sits in correction mode 11% off most recent 52 week highs. It has the look of building a handle on its cup base, but is doing some NOT in the upper half of the cup which makes it faulty prone.

The XLE has been all over the headlines and deservedly so, as it now hovers near either the triple top or on the verge of a major breakout from a bullish ascending triangle nearly a year and a half old. Their have been many that have led, some have been left behind, and some that never joined the party. Below is the chart of CRZO and how it appeared in our Thursday 5/10 Game Plan. To be frank it is well off all time highs, unlike some that are trading near there, but its chart shows some nice traits. It did break above a cup base trigger this week of 25.20, and looks well on its way to extending its winning streak to 8 weeks as it is higher by more than 9% heading into Friday. For Elliott Wave enthusiasts it may be in the middle of a third wave higher, which overwhelmingly is the strongest. It has more than doubled in the last 8 weeks and although I am not a believer in mean reversion this name is playing catch up nicely.

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