Markets continue to prove their resiliency as the Nasdaq showed the way with a jump of .8%. The S&P 500 and Russell 2000 rose by .2 and .5% and the Dow was off by .1%. The Nasdaq is still garnering the spotlight with good merit CLOSED above yesterdays bearish shooting star showing the PRICE action is omnipotent. It pushed away from the round 7700 number that it was shying away from the last 2 days, and don’t look know but it is higher by 1.5% heading into Friday and if that holds would be a FOURTH consecutive weekly advance of 1% or more. The S&P 500 is trading taut with the last 6 days not finishing up or down more than .4%. It is higher by a more pedestrian .1% this week so far, but one still has to be impressed with last weeks 1.6% jump, breaking through the previous four weeks all CLOSING tightly within just 22 handles of one another. This type of coiling action can lead to explosive moves and perhaps we are beginning to see a possible beach ball held underwater effect going forward as many still seem to be fighting the uptrend and positioned incorrectly.
Looking at individual groups Thursday leadership among the spaces was somewhat dodgy. Utilities led as the XLU gained 1.3%, but it was backed up by some decent sectors as cyclicals and technology also rose nicely by 1 and .7%. The XLU is still 13% off its most recent highs and it still needs to prove itself but going into Friday is higher by 1.9%. It could be filling out the long bottoming pattern here as it trades somewhat sideways, albeit at a lower altitude, with 16 of the last 18 weeks CLOSING between a 48-50 handle. Lagging badly were the financials with the XLF off by .8% and for the week is down 1.7%, giving back nearly all of last weeks 2.2% jump. We discussed how the ETF has failed to show any follow through after decent up weeks since the February slump at the round 30 number. Energy was off once again Thursday and is now down 3 sessions in a row and still seems stung by the bearish engulfing candle on 5/22.
As the markets march higher, if certain stocks are not being dragged along with it one should at the very least be concerned. A rising tide generally lifts all boats, and those that are left behind are usually done so for a reason and could be a tell going forward. Below is that chart of CASA, a recent software IPO and how it was presented in our Tuesday 5/14 Game Plan. It is now 46% off most recent 52 week highs and I like to say trends in motion tend to stay that way more likely than they are to reverse (not my quote). This name is now down 9 of the last 12 weeks and by more than 9% heading into Friday. The bleeding began, with help from some bearish candlesticks that created a double top near 34. A retest on 4/18 with a bearish hanging man candle touched the within the bearish engulfing candle from 3/16 that lost more than 6% on the third largest daily volume ever.