Markets at the expense of sounding like a broken record were near the UNCH line at the end of the day Tuesday with the S&P 500 and Dow hugging the flatline. Helping the Dow was the laggard IBM which still trades in bear market mode 20% off most recent 52 week highs. The Nasdaq rose .15% making a lukewarm rebound after going negative mid session after a nice .55% pop early on. It reclaimed only about one quarter of the losses from Monday but did manage to hold its 50 day SMA for the second consecutive session. The Russell 2000 seems to have endless amounts of stamina and again led rising .3% and is now above the 1450 V shaped cup base and north of the overbought 70 RSI number for the first time in 6 months.
Looking at individual sectors it was technology that led, but one needs to be wary as some of the generals in the space have been wounded this week. Charts like ADBE, which did not violate its 50 day SMA since the first week of the year sliced that line like a hot knife in butter last week. It is now off a rapid 8% from all time highs. Other leaders like WDAY are lower 9 of the last 13 days and also below its 50 day and now in correction mode off 10% from most recent highs. Worse yet it failed twice on a blossoming bullish ascending triangle breakout above a 105 trigger and now is trading right at the very round par figure and looking at its first potential four week losing streak of ’17. Lagging Tuesday were healthcare, utilities and materials.
There has been incessant talk about the FANG plays, perhaps with good reason as they carried the bulk of the market gains upon their shoulders. But they will encounter corrections of course as every name will. Below is the chart of AAPL, obviously not a FANG name but worthy of consideration with its size, and how it was portrayed in our Monday 9/23 Game Plan. There was a “cluster of evidence” with the round number corresponding very closely with a gap fill. I personally think these FANG names will undergo some more selling pressure going forward, but so far AAPL is acting well. GOOGL continues to reside beneath its 50 day SMA which has been sloping lower since late July and now sports a bearish descending triangle pattern with a move below 920 carrying a measured move lower of 90 handles. FB has work ahead as Monday it plunged below its 50 day SMA on volume the fourth largest of ’17 so far and losing the most in a single session since 11/3/16. NFLX looked poised to break above a 191.60 cup base trigger but was stopped at the round 190 number on both 9/21-22. AMZN is now 13% off its recent highs and now spooning the neckline in a bearish head and shoulders formation.