ChartSmarter Friday Game Plan 7/11/14

Markets fell for the third time in the last four sessions Thursday, but they did finish well off the lows for the day. The Nasdaq once again did take the brunt of the selling falling .5%, but recovered nicely from a morning fall of 1.5%. Heading into Friday it is saddled with a 2% decline for the week. The S&P 500 is looking at a fall of just more than 1% thus far for the week and also finished in the upper half of its daily range. This seems to be the start of some volatile action and lets remember that type of behavior is associated with market tops. We are still right near all time highs, so it is very early to speculate, but just something to be aware of. Bearishness was about as rampant as I have seen on the social media streams and therefore it was not surprising to see benchmarks bounce like they did. Without sounding like a broken record utilities led the way Thursday, being the only major group to finish in the black. The worst performer were the materials lower by more than 1%. Looking at the XLB, the ETF is higher 8 of the last 10 weeks and is trading very tightly just under the round 50 figure. Top component MON has a lot to do with much of those gains, and looks to be setting up nicely for a possible move into its 50 day SMA which aligns almost precisely with the round 120 handle. The stock is lower 9 of the last 10 sessions, but looking at the weekly chart seems to be shaping up a nice looking cup base associated with prior all time highs of 145.80 made back in June 2008. Lets see how that 50 day SMA holds up first.