ChartSmarter Monday Game Plan 2/3/14

They say its not how you start its how you finish. If you judge by the Nasdaq for example it lost .8% to start the month, and concluded the month down .5%. It will be glad to put January in the rear view mirror. The old adage does go. “as goes January so goes the year”, and I assume you will hear plenty of it this weekend ad nauseam. But stats are stats and the indicator has been right almost 75% of the time. The Nasdaq is lower by 1.7% in 2014, with the S&P 500 down by 3.6%. The S&P 500 has now lost ground for 3 consecutive weeks and is below its 50 day SMA now for 6 sessions. It needs to recapture that line for the bulls to regain their confidence. It spent 10 days below that line from 6/20/13-7/3/13, and then again 12 days total between 8/19/13-9/6/13. Volume on this occasion has been more elevated casting doubts this time around that it will be recouped promptly. The S&P 600 continues to be worrisome, as small cap names are a good barometer of the genuine health of the benchmarks, losing more than the other major averages this week by a 1.2% decline. The benchmarks move lower this week was in the face of some decent economic data as GDP came in at 3.2% in Q4, better than expected. Benign housing data from the Case-Schiller index failed to inspire as did good earnings reports from FB GOOG CMG. CMG has been a career killer for anyone trying to short this name into earnings. Weekly gains of last 4 reports were 12% this week with a big outside week to all time highs. Gains of 15, 6 and 7 were recorded the weeks ending 10/17/13, 7/18/13 and 4/18/13 respectively. Overall, with half of the S&P 500 reporting, and gains being the best in two years, you have to question the markets ability to fight north here. Of course the markets do their best to confound the most, so be ready for anything as always. Put on your seat belt for next week is my guess.