ChartSmarter Thursday Game Plan 5/22/14

Markets regained some footing Wednesday, recapturing all of Tuesdays losses. The puzzling volume scenario continues to persist with up days on lower trade and down days on higher volume. The magic round number on the S&P 500 of 1900 remains in focus and the Nasdaq is headed right into a collision with its 50 day SMA. The S&P 500 has the look of moving up to all time highs but perhaps completing a bearish rising wedge. Like I have said bearishness seems to be pervasive on the stream and the Mark Twain quote “whenever you find yourself on the side of the majority, it is time to pause and reflect” for the time being at least rings true. Leading sectors were among the winners Wednesday, just what bulls would like to see. Energy and transports were firm. Names like UNP CP TRN are trading right near all time highs. SAIA “drove” higher by more than 5%, pun intended. Examining the XLE one can see how bullish trade has been. Since the week ending 4/18’s bullish weekly advance of almost 5%, the ETF has traded very tightly with the last 4 weeks all closing within less than 50 cents of each other. This week the ETF is up just more than 1% and has the look of a bullish sideways flag. A move and close above 95 could put it at the round par figure in the near term.