ChartSmarter Thursday Game Plan 7/17/14

Markets rose on “hump” day Wednesday, but off session highs with the Nasdaq again the under performer although it did rise .2% on the session (surprising given the moves from MSFT and INTC up 4 and 9% respectively and the 4th and 8th largest components). The S&P 500 doubled that gain with a .4% gain, and again the Dow outperformed for a third consecutive day gaining .45%. Some concern stems from the fact that there has been some volatile trade going on which can be indicative of short term market tops. Look at the Nasdaq how it traded very taut between 5/27-7/1. Since then trade has been erratic and may be something to keep an eye on. One group that I am keeping a close eye on that have been behaving poorly are the homebuilders. Even with the decent day by the XHB with a move of .8% it is still down on the week, albeit slightly, and that after last weeks drubbing of almost 5%. Action to be wary of for now come from names like WLH which broke out from a 28.61 double bottom pivot on 6/25, then quickly retreated. With todays move it is back above that pivot but the 6.3% weekly loss last week right after a breakout is worrisome. LL dropped 21.5% last week after reporting earnings and is 54% off recent 52 week highs. OC is in its own personal bear market lower by more than 20% off highs made in early March. It is a good example of waiting for confirmation on a breakout instead of front running it, as a nice 44.03 double bottom trigger was looking to be potentially taken out in early June.