Complete Friday Game Plan

Indexes gave back some early gains, displaying hallmark bearish qualities Thursday. Markets that start quick out of the gate, and limp into the close are classic examples of weak, tiring action. The Nasdaq did manage to finish the day up nicely by 3/4%, showing its leadership status. Perhaps it just needed a brief resting period, and the 50 day SMA was there to comfort it. The successful rebound however has been lacking in any meaningful volume. The Nasdaq is lower by just over 1% for the week heading into Friday and the long holiday weekend, while the S&P 500 is off just more than 1.5%. Leading names breaking out are still rare to find, and that’s why the prudent investor is keeping their powder dry. Others that I was monitoring to see how bases were developing include LSTR. Until today the handle on the cup base was coming along splendidly. Today’s heavy volume was not optimal. The SDS chart is telling me the path to least resistance is still down, as Tuesday’s big volume break above the 50 day is still holding. Remember the longer that can remain above the 50 day the better. Caution until its pierced on the downside again.