ChartSmarter Wednesday Game Plan 1/15/14

Markets rebounded nicely Tuesday from Mondays disturbing losses. Volume was not as euphoric as the price action. The Nasdaq performed the best Tuesday as it regained all of the prior sessions fall and then some. It bounced off the 4100 level yesterday as it did on 1/6. The market certainly is doing its proverbial “confound the most”, as volatility reemerges. Yesterday Lockhart discussed additional tapering and the market tanked. When it was originally disclosed on 12/18 the S&P 500 flew higher gaining 1.7%. Perhaps the word “correction” will be erased from an investment dictionaries. Of course I was attempting a stab at some humor there with that last statement, but shallow pullbacks have been bought by complacent investors for a year now. Examining the Nasdaq short spurts of selling in 2013 from 2/20-25, 6/19-24 and 10/3-9 were all devoured. And on all three occasions heavy volume accompanied the moves lower, leaving bears feeling their time had come. If this rally is to have legs you may want to keep an eye on some potential rotation. Today lagging groups like the semiconductors and agriculture rose their hands begging to be noticed by investors sitting on piles of cash. The SMH rose almost 3% on more than double average daily volume. Blast from the past INTC took out a 26.14 cup with handle trigger today, certainly helping the ETF’s cause being its largest component. MOO is just below its own cup with handle pivot point of 54.67. CF has regained best of breed status as it quietly trades at all time highs.