ChartSmarter Tuesday Game Plan 2/18/14

Markets concluded a strong move this week Friday going into the holiday shortened week. The leading Nasdaq rose 2.9% last week, gaining ground every day. In fact it has closed up 8 of the last 9 sessions, with virtually all finishing near the highs for the session, bullish traits. This week saw the Nasdaq move into positive territory for 2014 up 1.6% since January 1st. It was the Nasdaq’s strongest weekly advance since the week ending 10/18/13’s 3.2% up move. The S&P 500 moved higher by 2.3% for the week and now is down by just .5% in 2014. It recovered its 50 day SMA this Tuesday and tested it precisely on Thursday and held firm. Volume continues to be the missing link and ongoing theme in 2014. Is that a bearish sign, or can it possibly be interpreted as investors not yet having the belief that this move will continue higher. If it is the latter that could continue to add fuel to the fire. Some positive signs the markets are conveying continue to be merger news. We spoke about the two recent semiconductor names yesterday, and of course this week brought the big media deal with Comcast looking to acquire Time Warner Cable. JOSB this week mentioned its purchase of Eddie Bauer. Notice how MW, previously mentioned as a potential acquirer, found precise 200 day SMA support Friday recovering 5% from the intraday lows. Markets did this week shrug off some poor economic data, a bullish sign. Retail sales, industrial production, manufacturing and capacity utilization all fell. Oh but do not worry. It is just the weather.