Markets are doing their best to confound the most as the benchmarks rallied well off session lows Friday, as bears were probably salivating at a soft finish to end the week. The Dow rallied nearly 200 handles off intraday lows, the Nasdaq bounced off the round 7700 number and the S&P 500 and Russell 2000 nearly ended the day UNCH. The tight action on the S&P 500 looks to have put in a handle on a cup base that began in late January. The Russell 2000 did record a doji candle, which could indicate a possible weakening of the prevailing trend, but as always PRICE action comes before everything and it has been hard to deny that it has been anything but bullish. On a weekly basis the bulls should feel good heading into the weekend as the Nasdaq broadly outshined its competitors gaining 1.5%. Second best was the Russell 2000 up .7%, the S7P 500 was UNCH and the Dow FELL .9%. On a YTD basis the Nasdaq also comfortably maintains its healthy lead up 12.2%, the Russell 2000 by 9.7%, the S&P 500 4% and the Dow up 1.5% in 2018.
Looking at individual groups at the expense of sounding like a broken record it was defensive in nature as the staples and utilities provided a solid one-two punch with the XLP and XLU adding 1.3 and .7%. In fact both of the two aforementioned groups were the best performing sector 4 of 5 days last week. Lagging very badly Friday was energy as the XLE slumped more than 2%, and it seems all but confirmed that the triple top dating back to late 2016 is now confirmed. It is on a 4 day losing streak and CLOSED just below its 50 day SMA. On a weekly basis the XLE was easily the worst actor falling 3.6%, just 3 weeks after the 4.5% drilling the week ending 5/25. The second worst space was the financials with the XLF losing 2.2% and the best performer was the XLY advancing 2%. Next week will be an interesting one as technology, via the XLK, could potentially complete a 3 week tight pattern as the last two CLOSED within just 4 pennies of each other.
It has been said recently that consumers are spending their hard earned dollars differently than they have in the past. That was spoken about in the months prior to almost the entire retail space being under assault by AMZN. A lot has changed in 2018 as the XRT is now above a 49.19 cup base trigger taken out on 6/8 and the ETF recorded a bullish engulfing candle Friday, just 2 sessions after a bearish evening star was completed as it struggles with the round 50 number. But consumers overall have been spending money and that has also trickled down to the casual diners. We have seen CMG reclaim its best in breed status, SHAK has its groove back and below is the chart of BJRI and how it was presented in our Wednesday 5/29 Game Plan. It has more than doubled since the week ending 9/8/17 and has lost ground just 8 weeks so far this year. No indigestion here for long shareholders, pun intended.