ChartSmarter Tuesday Game Plan 6/10/14

Markets were listless somewhat to start the week, and the Nasdaq led once again. The tech benchmark reversed off highs made near lunchtime when it was up by almost .6%. It finished up .3%. Perhaps it will consolidate up here, where the 4371 handle looms large as that represents decade old plus highs. The S&P 500 finished up .1% near the round 1950 handle that seems to be getting a lot of chatter about. Small caps seem to be not as shy as they have been most of the year as the IWM is now above a 115.12 double bottom pivot point it took out last Friday. Last week it gained a robust 2.7%, although trade was lackluster. We have come up with many possible reasons for the lack of trade, but one I pondered over the weekend is perhaps there is still some disbelief in this rally keeping investors on the sidelines. Once they decide to move back in with abandon and we get a strong push, that may be your time to sell into. As I scan through hundreds of charts a night I am seeing better set ups even at these seemingly “lofty” levels. If we learned anything from markets in recent years past, “markets can remain irrational longer than you can remain solvent”. As the major averages trade tightly some stocks key to an improving economy are doing anything but. Moves in names like PCP up 13% in the last 3 weeks, higher 13 of the last 15 days. JOY up more than 10% in enormous trade last Thursday and Friday and higher again today. I think this rally still has legs.