ChartSmarter Monday Game Plan 7/25/16

Markets concluded another positive week with every one of the major S&P sectors gaining ground Friday. It was the utilities that recorded the best advance up 1.3% doubling the second best group, the financials. The Nasdaq rose 1.4% this week and registered its fourth consecutive weekly gain and all of the four CLOSED right at the top of their weekly range. Looking back at the last 2 instances where it rose 4 straight weeks saw the next week rise as well. The week ending 3/18 rose 1% to complete a 5 week winning streak and the week ending 11/6/15 rose by 1.8% to complete a 6th straight weekly advance. One can assume a likely test of recent all time highs made almost exactly a year ago and are just more than 2% from where we stand currently. Looking at weekly sector returns it is encouraging that technology was the best performer with the XLK higher by 1.8%. Interestingly there was some bifurcation this week among the defensive staples and utilities with the XLU advancing 1.5% and the staples declining by .4%. Looking a bit longer out the monthly sector gains continue to demonstrate healthy rotation with the XLV higher by better than 6%. Conversely on the one week and one month energy is the worst performer and it continues to see capital flow away from it and remember that was leading earlier in the year, but that positive correlation no longer exists obviously. Keep stocks in the group on your watchlist as some shrug off a weakening crude price and both HAL and SLB did mention its looks like a bottoming process is in. Below is the chart of SLB we highlighted back in our Tuesday 7/12 Game Plan. This week it recorded just its second weekly CLOSE above the round 80 number in the last 11 months.