ChartSmarter Friday Game Plan 8/1/14

Markets were roiled Thursday and volume was robust. The Nasdaq took the worst of it down 2.1% and nearing the 4350 handle which the index has bounced off on 7/10 and 7/17. The level doubles as rough 50 day SMA support as well. To give it even more importance it is right at the cup with handle trigger above 4347 the benchmark took out on 6/18. Going into Friday the Nasdaq is lower by 1.8%. The S&P 500 undercut its 50 day SMA Thursday losing 2% looking much like the sessions on 1/24 and 4/10 where the index lost 2.09% each session curiously. The January episode took a lot longer to reclaim, but the April scenario just took 4 days. It is now lower by 2.4% for the week going into Friday. This is certainly a time to be nimble and small and yes cash is a position. As trend followers we like to do just that and their is a feeling we may be potentially undergoing one here. One day certainly does not make a trend but many leading stocks were wounded today. Groups that have been healthy have suddenly turned weak. Transports come to mind. Today ARCB took a very wrong turn clipping off a quarter of its value in one session. Semiconductors we have spoke of here as they were leaders this year and have suddenly fell ill. CODE comes to mind here. The stock which has traded bullishly tight has become bearishly erratic. The stock reported today and declined 7%. This was on top of last weeks bearish outside week losing almost 10%. This is not a time to put your hero suit on.