ChartSmarter Monday Game Plan

Markets rebounded Friday to finish off a week that was very volatile. The Dow finished each day this week with either a triple digit gain or loss. H/T to @RyanDetrick for the stat. Friday the Nasdaq led the way with a 1% advance, and the S&P 500 gained .9%. Both the Nasdaq and S&P 500 recaptured roughly half of Thursdays vicious day, unfortunately without the volume. They also both reclaimed their 50 day SMAs and next week should be interesting. We decided to go flat into the close as all this erratic action is indicative of topping action to us. For the week the Nasdaq was down 1.5% and the S&P 500 1.4%. In the YTD figures the Nasdaq still maintains a slight advantage higher by 8% compared to the S&P 500’s 7.3% gain. The oversold energy group was the best performer Friday. Impressive given the fact that the UUP is now higher 10 of the last 11 weeks, and the one lower week ending 8/8 was down one penny, so lets just call it an 11 week winning streak. The ETF is approaching a major resistance level at the 23 handle. It slowed its advance in May and July this year and has caused problems dating back to January, and June through August 2012. Many names in the group are setting up some nice bottoming formations, most specifically double bottoms. The XLE rid itself of correction territory on Friday as it was lower by more than 10% until then. The action Wednesday was most impressive this week and it made a stand at the round 90 handle, after finding the altitude above par a bit unnerving. It should gravitate back toward that round figure this fall. Start your engines, I mean watch lists.