ChartSmarter Tuesday Game Plan 1/28/14

Markets went on a roller coaster ride Monday with the Nasdaq receiving the best joyride as it was at its lowest point down close to 2%. It pierced its 50 day SMA temporarily before making a slight comeback cutting the deficit almost in half. The action was eerily similar to the move of 10/7-8/13 with 10/9/13 staging a turnaround. GOOG the tech rich indexes 2nd largest component at more than 5% also sliced its 50 day SMA briefly, helping the comeback. The S&P 500 fell by .5% after being down nearly 1% at lunchtime. The action in the IWM was concerning as it attempted to climb its way back above its 50 day yet came up short, falling 1.3%. Small caps are a key ingredient to an ongoing bull market, so underperformance within should be noted for potential further weakening signs. Earnings will be flowing in at a very steady pace this week and CAT was responsible for 30 Dow points Monday. Today it gained almost 6% and snapped a 6 day losing streak. CAT took out a 91.77 cup with handle trigger on 1/15 and found good 200 day support Friday. Tomorrow we will get reports from plenty and one in particular I will be watching is NUE. The stock most likely offers good risk reward here as it trades just above 200 day support, where it was comforted numerous times since late 2012. If its peers are any indication the trend is lower. Weekly losses between 7-8% by names like STLD X RS have the group mired in a steep downtrend. SLX found support at its 200 day today. The 200 day seems like a common theme recently.