The Nasdaq made it five straight for the first time in 3 months, and the 50 day SMA which it has successfully retested twice in late June and July is holding up fine. Notice the three of the four previous times it did that it undercut the line between February-April, albeit a short period of time, it spent sometime below it before recapturing it. This is occurring in a weak seasonality period, so give the tech heavy benchmark credit where it is due.
The S&P 500 is now just above its cup with handle trigger and one wants to see follow through in the days ahead. This index is looking for its sixth weekly win in a row, and if it can get going remember it had put on a show advancing 19 of 23 weeks ending between 8/25/17-1/26/18. Focusing in on the shorter term, I have heard many voice concerns with the abundance of times it has bounced off the round 2800 number the last 3 weeks. Some say it weakens support at a certain level, some say it strengthens it. Above all PRICE could care less. Follow that.
Participation was broad during Mondays lukewarm rally with all 9 of the traditional major S&P sectors (no real estate of telecommunications). Hovering at the top of the leaderboard were cyclicals, financials and technology. The XLY sits just 1% off most recent 52 week highs and the last 4 weeks all CLOSED taut within just .95 of each other. The ETF also responded bullishly with its first touch of a rising 50 day SMA after a cup base breakout from a 109.44 trigger on 6/7, often an ideal entry point.
Transports are an intriguing group as the IYT is now attempting to maintain ground above the round 200 figure. It has made higher lows four times, this February, April-June and now key is to gain some momentum above 200. It CLOSED above the figure on 6/12 but quickly surrendered. The ETF is looking for a sixth consecutive up week, which if it happened looks very similar to the 6 week win streak the weeks ending between 5/11-6/15. Only difference this time around volume has been more cooperative.
Retail names have begun to lose their momentum somewhat after being firm throughout much of 2018. It could be transitory, but some former best of breed names have shown some fragile signs. Stocks like GIII, DKS an RL are in correction mode down 14, 12 and 11% from their respective highs. Below is another chart that was a general, TPR the former COH and how it was presented in our Thursday 8/2 Game Plan. It has been unable to recover from the 15.5% weekly slump ending 5/4 which came in the second largest weekly volume in 2 1/2 years. The name dropped more than 2% on Monday and is lower by 18% from its own recent 52 week highs and last week FELL 2.2% as the XRT rose 1.3%. A slow bleed going forward is a distinct possibility and stay short with a stop at 48.40.