ChartSmarter Monday Game Plan 8/4/14

Markets finished off session lows Friday, but some technical damage was done this week. The S&P 500 lost 2.7% this week in the largest weekly volume in 3 months, so much for sleepy summer trade. It also undercut its 50 day SMA Thursday. The Nasdaq fell 2.2% for the week and finished just beneath its 50 day SMA as well and is lower 6 of the last 7 days, albeit some have been negligible losses. Both benchmarks are now up 4.2% YTD, and the Dow which we do not pay too much attention too, although it does contain some old big cap plays that investors may flock to soon, is now negative in 2014. What continues to be concerning for us is the behavior of some of the stronger groups in 2014, starting to display distributive characteristics. Energy which we have spoken about last week was slashed this week. The XLE lost 4% this week and is on a current 6 day losing streak undercutting its 50 day SMA. Weekly volume was the largest since the week ending 4/18. It is one thing to see group laggards display fragile action like a BBG falling 15% this week, but when leaders like a CRR drop by the same amount it is worrisome. EOG shredded its 50 day SMA this week losing almost 6% as well. Transports another leading sector saw some big earnings shortfalls this week too. YRCW slumped 18%, OSK 13% and GWR by 7%. It may still be to early to call a trend change here, but several factors are piling up. New 52 week highs versus lows came in at 14 to 93 for the NYSE and 21 to 111 for the Nasdaq.