Markets ended the week with a slight whimper as the Nasdaq and S&P 500 fell .4 and .3%. The Dow finished UNCH and the Russell 2000 led with s slight gain of .1%. For the week the Russell 2000 was an outlier UP 1.2%, while the Dow and S&P 500 fell .5% and the Nasdaq by .7%. On a YTD basis the Russell 2000 has nearly caught the Nasdaq as it has advanced 5.9% compared to the Nasdaq rising 6.5% (the Dow is UNCH and the S&P 500 is up 1.5% on 2018). The Nasdaq was not helped in any way by some of their “old tech” darlings as CSCO sank nearly 6% for the week, it largest weekly loss in more than a year. AMAT plummeted more than 9%, and it already recorded an 11.3% weekly slump the week ending 2/9. Trade topped more than 100 million shares for the week, just the fourth time that occurred in the last 30 months. It is now in bear market mode and 21% off most recent 52 week highs, and one look at its chart shows very loose and sloppy trade, a hallmark bearish trait. The $TNX did back off some to end the week and it may be in for some further weakness as it completed a bearish evening star pattern.
Looking at individual sectors Friday it was energy and financials that lagged, with energy taking a well deserved day off as the XLE fell by .7%. The financials were the worst performer as the XLF surrendered .9%. The ETF put up a nice 5 session winning streak between 5/4-10 but volume was paltry. The chart has the look of a bull flag or even a bullish falling wedge, but I have no interest in participating unless 28.50 is taken out on a CLOSING basis. The bulls did enjoy seeing the staples lag as well on Friday as the XLP fell by .6%. What should have come as no surprise was CPB falling after an earnings release. It has done so now FIVE straight times losing 12.4, 3.2, 8.2, 8.1 and 2% on 5/18, 2/16, 11/21, 8/31 and 5/19/17. On a weekly basis energy led with a 1.8% gain, bulls are going to want to see them pass the leadership baton soon. They were closely tailed by materials as the XLB jumped 1.7%, recording its first 3 week winning streak of 2018. The only major S&P sectors to fall this week were the financials, technology and utilities with the XLF, XLK and XLU losing 1.1, 1.4 and 2.8% respectively.
Healthcare has been an inconsistent group recently and we have been stressing the medical device names have been the way to go, and that has been moderately correct. Below is the chart of JNCE and how it appeared in our Friday 4/27 Game Plan. There is no way to mince words. We were WRONG, and that is part of the business. No matter how good a chart looks one has to realize when a stop is hit it is game over. For those who disregard the rule of taking small losses it could be painful both in mental and physical capital. This chart was holding a great looking breakout above a long bullish ascending weekly triangle, but on 5/9 the stop was hit. For those that did not adhere to their discipline the name has been nearly sliced in half over the last 2 weeks and is a good example of the saying “nothing good happens under the 200 day SMA”.