Markets continue to impress as they are now in new high ground. Far from backing away from the current altitude they are making a stand. I am a big believer in candlesticks, but obviously know PRICE is omnipotent. Their is truth in price. The Nasdaq up another 1% already this week so far, and is nearing the bearish engulfing candle from 3/13, and the beat of the “most hated bull market in history” keeps moving northward. My opinion, and they are worth nothing at all, is that many are not positioned for more upside and for that reason believe that the indexes are well rested and have stamina to potentially move higher in a meaningful way. It was great to see the Nasdaq and Russell 2000 lead as the benchmarks rose .4 and .7% respectively. The consumer is showing his appetite for spending as retail names are white hot. This week M has advanced more than 12% and has doubled since the weekly bullish engulfing candle the week ending 11/10/17, and now testing the round 40 figure.
Looking at individual sectors the leaderboard was crowded with the right types of groups, if you are a bull. Participation came from materials, cyclicals and technology with the XLB higher by .8, XLY .6 and XLK by .4%. The XLY is looking firm as it approaches a 109.44 cup base trigger in a pattern that began with the beginning of the correction earlier this year on 1/29. The XLY has CLOSED at the top of its weekly range for the last 6 weeks and is now looking to break above the robust run as the ETF advanced 11 of the 12 weeks ending between 11/10/17-1/26. The bulls are welcoming the seemingly habitual presence recently of the staples and utilities lagging. Both the XLP and XLU lost .5 and .6% and were joined there by financials and energy with the XLF and XLE slipping .4 and .3%. The XLF still looks messy to me and the fact that they have not responded to looser regulation and the perceived notion of higher interest rates is concerning.
Healthcare names are mustering some strength with some intermittent busts with the likes of NKTR and CTMX cratering this week and both of those names are now 50 and 37% off their most recent 52 week highs respectively. Interesting they both bounced near the very round 50 and 20 numbers, but for me there is no play on either of them as there are much better fish to fry. One of them that fell apart more than the aforementioned two is VRX, and below is the chart and how it was presented in our Friday 6/1 Game Plan. The stock which rose 6 of the last 8 weeks, with all CLOSING in the upper half of the weekly range. More impressive was the three ending between 5/18-6/1 all finishing tautly within just .16 of each other, which has sent the name higher by nearly 7% so far this week. Keep your eye on this one, pun intended (they have contact lenses in their portfolio of products).