ChartSmarter Monday Game Plan 12/15/14

Markets were battered Friday with the S&P 500 taking the worst of the beating lower by 1.6%. It managed to close just above the round 2000 number which aligns with its still upward sloping 50 day SMA. For the week however it lost 3.5% making it the worst weekly loss since the 4.3% drubbing the week ending 5/18/12. It even surpassed the worst week in October which felt very heavy as the week ending 10/10 dropped 3.1%. The Nasdaq attempted to make a stab at going positive on the day in the late afternoon but was unable to muster the energy. It fell 2.7% for the week and both benchmarks Friday went out with elevated volume and strongly upon their lows. Among the sectors clobbered Friday were again the energy and materials which has been a recurring theme recently and it may continue to do so after a conversation I had with a fellow trader. One of my colleagues made a very good point about how he feels like the energy group will not be ripe for bottom picking until the the turn of the year, as he mentioned that portfolio managers will be in no rush to window dress a group that has been demolished. The materials have been clobbered as well. A 6% drop in the XLB this week was its own worst drop since the week ending 5/18/12. FCX is now almost sporting a 6% dividend yield. With materials like steel, copper among others joining the oil pummeling it is hard to look upon all the good economic data coming out and not be skeptical.