ChartSmarter Friday Game Plan 12/2/16

Markets were once agin bifurcated and it was troubling to see the tech reaction for a second straight session. For a second straight day the Nasdaq dropped more than 1%, the first time since the heavy sell off in late June. Keep in mind even during the recent 9 session losing streak it endured between 10/25-11/4 NONE of the nine days dropped more than 1%. It undercut both its 50 day SMA and the recent double bottom trigger of 5312 taken out on 11/17. We all know the best breakouts work right away and conversely it is rarely a good sign to see one fall apart so quickly. The Nasdaq dropped 1.4% Thursday and for the week headed into Friday has surrendered 2.8%. Notable today was the breakdown of best of breed name SNPS which is on pace for its worst week of 2016. The S&P 500 dropped a more subdued .3% and thus far this week is lower by 1%. The Dow continues to outperform and that could be the sign of topping action as investors normally cling onto their largest of blue chip, dividend payers before finally giving in. Looking at individual sectors the best gainers Thursday were energy, industrials and financials acted the sturdiest with the XLF advancing 1.7% (a late push put the materials and discretionary fractionally higher). Technology as a sector was the worst performer with the XLK down 2.1%. The discretionary group almost eked out a gain with the XLY basically UNCH today and now is bull flagging after a recent double bottom breakout above a 80.51 trigger on 11/17. Many names in the space reported earnings this morning and it was overall a bit weak with PVH and LZB forging gains of 1.9 and 5%, but others like EXPR, GES, LE and DG slumped 20.4, 10.2, 4.5 and 5%. We will hear from a slew more after the bell with ULTA, FIVE, BIG, ZUMZ, GIII and ASNA. Below is the chart of BGFV and how it appeared in our Tuesday Game plan this week and is a good example of why one must await PRICE confirmation. It had issues CLOSING above the round 20 number and any who attempted to step in beforehand were given a market lesson today.