Their was some uniformity within the major benchmarks with the Dow, S&P 500 and Nasdaq all CLOSING the day lower in the .4-.5% neighborhood, it was the Russell 2000 that was a standout. The small cap index ROSE .5% and looks poised to challenge the 1708 level that has given in headaches recently. On the weekly chart a bullish hammer candle is taking shape and perhaps it is still digesting the recent, impressive EIGHT week winning streak. Keep in mind it is also shrugging off the doji candle from the week ending 6/15.
The VIX registered its first back to back daily gains in a month and it has recorded three spinning top candles in the last 8 days, which like the doji, could be suggesting that the weakness in the prevailing downtrend could be softening. It still swims below both its 50 and 200 day SMAs, albeit slightly, and moves above the downward sloping 50 day SMA have thwarted it since the beginning of April (with the exception of late June). Its 6% plus move Thursday, an oversized move for pedestrian markets, may be getting ready to be jump started.
The utilities were the best performer of the major S&P sectors Thursday. The XLU rose by .9% today and I could easily be wrong about their direction. Its 4 week winning streak, which rose nearly 9% between weeks ending 6/15-7/6, was impressive and last week recorded a bullish hammer candle. My concern emanated from the bullish engulfing candle that fell more than 3% on 7/9. Obviously one should pay more attention to longer time frames, so give this group the benefit of the doubt.
Financials were the worst actor trading in an inverse fashion to the bond proxy utilities. The XLF withdrew 1.5% today and yesterdays break above a bullish falling wedge trigger is being retested already. We know the best breakouts work out right away, so this is not the best sign. Lets cut it some slack as it rose 3.5% the first three days of the week before todays backtrack. Volume trends need to firm up as it looks like it may complete a 3 week winning streak tomorrow, but note volume has been absent, and last week recorded a reversal to CLOSE in the lower half of the weekly range.
Tonight we will focus on the retail space, and one can not deny the bullish moves within. The XRT, which is a diverse and liquid consumer ETF, has been fighting its way higher and has been repelled by the very round 50 number recently. Its weekly chart is taken on the look of a bull flag formation, and the last 6 weeks have seen a one up one down week and this week is holding to that higher by 2.9% so far. Below is the chart of M and how it was presented in our Wednesday Game Plan this week. Since mid February it has received support at an upward sloping 50 day SMA FIVE times and on the weekly it may be setting up for a summer move toward an add on 41.43 cup with handle trigger. The consumer is spending, the bear will say they are doing so on borrowed money.