Bears would be hard pressed to come up with ways to explain the PRICE action the last couple days with anything but bullish tones. The Nasdaq for one recorded a nice bullish engulfing candle Wednesday CLOSING nearly 100 handles off intraday lows and again Thursday it went out on highs, ending UNCH, but a hammer candle was registered. The bull flag is alive and well. The Russell 2000 is still lingering below Tuesdays bearish engulfing candle, but if has made a powerful run as of late and the action there can be forgiven. The VIX for a second straight day was above its 200 day SMA, yet finished 10% off intraday highs. For the week headed into Friday the Nasdaq is leading advancing .9% so far, followed by the S&P 500 and Dow rising .5 and .4% respectively.
Looking at individual groups it was again shaky leadership as the utilities led as the XLU rose .8% and the industrials were runners up with the XLI gaining .5%. The cyclicals, via the XLY being the only other major S&P sector to rise Thursday, put up a nice showing as select retail names like KSS GPS URBN and even the laggard LB all rose more than 3%. LB acted well after an initial drop after earnings and was stopped at its 50 day SMA Thursday, a line it has been underneath all year thus far. Lagging were the financials down .7% which maybe were down due to a “sell the news” regulation event, but the only problem is they have not really rallied much overall recently. Those wondering if the market could stand on its own without the inclusion of energy are believing now that it can as the XLE is now down 4 of the last 5 sessions and the XLE lagged Thursday lower by 1.6%.
The internet group has been acting well and like any other space it is assorted. Below is the chart of SFIX, and how it was originally presented in our Monday 4/2 Game Plan. The name deals with retail, which group has been on fire, but its weakness leaving it now 33% off most recent 52 week highs is very concerning. The very round 20 number has played a pivotal role here as since the 3/20 session, the have been no CLOSES below 20 even though NINE days since then have been below intraday (notice the round 30 number pushed it back hard on 12/26-27/17). Trouble was brewing once the good looking WEEKLY bull flag failed to generate any follow through and a move under the symmetrical triangle has a measured move to single digits.