ChartSmarter Wednesday Game Plan 7/9/14

Markets fell Tuesday and once again it was the Nasdaq which has made up so much ground on the S&P 500 recently that suffered the most damage. Again it dropped almost double what the S&P 500 did, falling 1.35% compared to a .7% decline. The Nasdaq did manage to come off morning sessions lows near 1.8%, but volume was strong today on the move lower. Among sectors, utilities were the only group to escape the selloff Tuesday, and they were the best performing group in the first half of 2014. We have lightened up here on our longs, to have some cash on the sidelines to take advantage of some names that should become more attractive in the coming days. Do we think we are headed for a very significant selloff, no, but you never know. Perhaps now is a time to hide out in the SDS, as it seems to be finding mild support here at the 25 level. It most likely will make a move back to its 50 day SMA, which it has done 6 times since last only to be battered back down into its never ending tailspin. On 4 of those 6 occasions the ETF did break above the 50 day SMA (last August, October and this January and April) temporarily. Maybe this time it will venture up to its 200 day SMA and fool many. AA did kick off earnings season with a beat and is trading up in the after hours as we write. TCS on the other hand was not as resilient. It slumped 15% after the close, and looking at the chart is a great example of how laggards will lag and leaders will lead. The stock went into the close down 43% from its all time highs on New Years Eve.