The Nasdaq made it 6 straight Tuesday, with an advance of .3%. It did register a spinning top candle at the round 7900 number, which could indicate some fatigue. That was even with its largest component AAPL recording a bearish engulfing candle at all time highs. Perhaps it was affected by the news China may target the name in a trade war. To technicians news is just noise, and a little pullback could be healthy and even warranted as it sits well above its 194.30 cup base trigger it broke above on 7/25.
The VIX printed a bullish hammer candle today, as it traded with a 10 handle for the first time since 5/4, whose session had a much longer tail. It makes sense to buy protection down here while you can as it did find support at the bottom declining line in a bullish falling wedge. It remains nestled beneath both its 50 and 200 day SMAs, with stiff resistance at the latter line four times in the last month. On its weekly chart one can see the last break above a bullish falling wedge occurred in February. The 2/6 session met resistance at the very round 50 number in a rapid break that quickly faltered.
Instead of focusing on sectors that led Tuesday, it was nice to see the laggard action, if you are a bull. The defensive trifecta of healthcare, staples and utilities were the softest performers. My guess is that it is a pause as all three of the aforementioned groups have seen nice action as of late. The XLV which lost ground just 6 times in July, is not shying away from the very round 90 number. The XLU has the look of a weekly cup with handle pattern in a base that began the week ending 11/17/17. The last 3 sessions have all CLOSED within pennies of the 53.39 trigger.
Among the gainers today the XLI completed a handle on its cup base. The buy point is above 77.09 and the ETF has seen distribution this year since February, but notable is the inability of bears to push the instrument lower. As we have mentioned recently it has traded between the round 70-80 numbers, and it seems to being magnetically pulled toward 80 and a move above can be powerful. The fund is acting better without a ton of help from its largest component BA, which has not seen a gain on higher than average daily volume since 5/21. If it can get going look out.
The energy space, which has quite frankly confused bit somewhat, is still in the midst of some big consolidation. The XLE is now just 4% off its most recent 52 week highs and a bearish descending triangle now looks like a symmetrical triangle. The services and equipment OIH is lower by 14%, weighted down by weakness in SLB and HAL which together make up 1/3 of the ETF. Below is a chart of GTLS and how it was presented in our Friday 8/3/Game Plan. It has acted well POST breakout from a recent cup base trigger, important as we know the best ones tend to work out right away. Even more to like is how the leader is offering a potential add on buy point. The generals in a group will do that. A bull flag is now setting up in conjunction with the round 80 number. A move and CLOSE above has a measured move of another 10 handles.