Markets:
The Nasdaq posted a pedestrian gain of .4% considering its largest component put up a powerful gain of more than 5%. Standing in its way was the very round 200 number, but it did recapture the cup base trigger of 194.30 taken out originally on 7/25. Give credit where its due as it recorded its second consecutive spinning top candle CLOSING above its rising 50 day SMA. The fact that AAPL, of course a Dow member now, did not give a better boost to the price weighted index was a surprise as it is only one of four trading above 200.
The S&P 500 has now held the round 2800 number for 12 straight sessions, as it receded nearly 2% recently. Today made the handle on its cup base legitimate, being 5 days in duration now. The Russell 2000 is still battling with resistance at its upward sloping 50 day SMA, similar to the late April-early May occurrence, before taking off gaining 25 off 33 days beginning with the 5/4 session decisively ending above the 50 day SMA.
The market feels heavier than just being a few percent off all time highs. Wednesday brought weakness in airlines, oil, retailers and gold. Feels pretty diverse. The IYT is having issues with the very round 200 number once again, so soon after doing so in early June too. The GLD is looking at a possible 7th loss in the last 8 weeks. The XRT which was having trouble with the very round 50 number is now trying to stay above its 50 day SMA and the JETS ETF, which is somewhat illiquid, is flying at a low altitude off 11% from most recent 52 week highs.
Sectors:
Technology was in focus Wednesday as the group delivered courtesy of AAPL. The XLK was the best major S&P performer rising .6%, outdoing healthcare and financials which rose .2%. The ETF however has CLOSED in the lower half of the daily range the last four days. It has barely made back one third of the losses of 3.3% from 7/27-30 the last couple days, a meager showing. To add to the negative narrative volume has been soft Tuesday and Wednesday, compared to the bloated volume as the fund lost ground Monday and last Friday. The 70 number that was rough resistance in March and May is your line in the sand.
Energy lagged as the XLE fell by 1.5% battling to stay above its 50 day SMA. Since undercutting the important line on 6/15 it has bobbed above and below the line. It has been tough to judge, and I have been getting more bullish on the space and could very well be wrong. Until 79 is taken out on a CLOSING basis I think you have to lean bearish. One still has to overcome the bearish engulfing candle on 5/22, the bearish shooting star from 7/10 and Mondays doji candle followed up by Tuesday bearish engulfing candle. Perhaps there will not be a crude awakening to the upside.
Special Situations:
We are big believers in confirming prices, most importantly on a CLOSING basis. The round number theory is also a favorite and the chart below has both. In our Friday 7/27 Game Plan this is how we profiled PTC, a best in breed software name. It was on the verge on breaking above a bullish ascending triangle formation whose trigger aligned with the very round par number. However the 100 figure was never taken out on a CLOSING basis and has since fallen 8% off most recent all time highs. Those who purchased trying to front run the trigger have payed a price. It is now nearing a gap fill from the 6/8 session. If that should hold one could enter there and add to through a potential double bottom trigger of 99.96. Those pesky round numbers are something.