ChartSmarter Monday Game Plan 2/10/14

Markets rose increased handsomely Friday to end the week with sizable gains. The S&P 500 rose .8% this week and more importantly did so on the largest weekly volume since the week ending 5/18/12 when it lost 4.3%. It missed a bullish outside week by less than 1 point. The benchmark which fell just shy of finishing above the round 1800 handle is now down by 4.1% YTD. The leading Nasdaq flexed its muscles this week as well rising .5%. Unlike the S&P 500 it was able to recapture its 50 day SMA and for 4 consecutive days closed basically at session highs, a bullish sign. On Monday one would have been foolish to believe that the Nasdaq would erase all of 2.6% losses to begin the week, but it did just exactly that and now lies down 2.9% for 2014. Many were fooled by the initial weakness from the highly awaited jobs number premarket and the indexes had every right to fold an hour into the day as opening gains were thoroughly tested and held firm. Are the skies clear? Time will tell but the January losses of 3.6% for the S&P 500 and 1.7% for the Nasdaq were hard to swallow. As pitchers and catchers reported earlier this month and thinking of it as a 12 inning baseball game it may very well be tough to overcome that rough first inning, as statistics verify. Markets do not go straight up or down and this bearish trend change many believe is underway is being tested as we speak. It is very common for indexes, like individual stocks, to go back and retest where uptrends were broken and that is where we are now. The strong weekly volume we spoke of earlier was due mainly to the huge trade associated with Mondays bludgeoning. This coming Monday should be fun, as the Nasdaq has been lower the last 5 Mondays, with the last 3 being down at least 1%.