Mega Cap Influence:
One can not judge a book by its cover they say. If one wanted to apply that to markets the meaning would be to look deeper than the 40% weighting the top two holdings of the XLY in AMZN and TSLA. The latter bounced off the very round 800 number and its 200 day SMA as it attempts to carve out a double bottom base. Our thoughts of AMZN are on the chart below, and we think this is a line in the sand here at the very round 3000 number (Tuesday filled in the gap from the 1/24 session). Looking at other stocks isn’t it interesting that FLWS can not even get a bid heading into Valentine’s Day? Talking about the autos is GT the forgotten play and remain constructive on the play above the very round 20 number. MTN, a former best of breed hotel name has a chart that looks like one is skiing down a black diamond trail as it has given up 100 handles in the last 3 months alone. Some recent casual dining IPOs look appetizing. BROS is on the ascent recording a 50% gain in the last 7 sessions after a bullish engulfing candle on 1/24 at the 40 number. Another one in PTLO looks tasty. Above the 30 number which was support on 12/17 should see a quick move to 40 that was resistance in December and early January. Opportunities abound in the discretionary space.