ChartSmarter Monday Game Plan 8/24/15

Markets sustained brutal blows this week with Thursday and Friday ushering in the most damage. Both the Nasdaq and S&P 500 lost ground Tuesday through Friday and volume accelerated the last 4 sessions with each successive day. We have been very light the last few months as we were concerned with the potential giant double top in the Nasdaq at 15 year highs. The Nasdaq lost 6.8% this week slicing both its 50 and 200 day SMAs and for those who said we have not had a 10% correction in years, it now rests right at that number 10% off recent all time highs. AAPL, which is the largest component in the index at 7%, is now in bear market mode more than 20% off its recent all time highs. With this weeks carnage the Nasdaq is now lower YTD, albeit down .6%. The S&P 500 fell 5.7% for the week and is now lower by 4.3% YTD. Neither of those benchmarks has lost ground each of the last 3 years, and both showed double digit returns between 2012-2014. The Dow lost 1000 points and recorded a bearish 3 black crows pattern. Of course it is very possible we see some sort of bounce next week but we fell that should be temporary. The Nasdaq weakness has been concerning us and this was the 5th consecutive week it “underperformed” the S&P 500. One of the big reasons with the Nasdaq aside from AAPL, is the action of the benchmarks second largest component GOOGL, just above 5%. Below is precisely how we examined the name in our Thursday 8/13 Game Plan.