ChartSmarter Monday Game Plan 8/11/14

Markets rebounded Friday as the S&P 500 rose 1.1% and the Nasdaq tacked on gains of .8%. Those gains enabled the benchmarks to miss a down week as each eked out weekly gains of .4% for Nasdaq and .3% for the S&P 500. On a YTD basis the Nasdaq still holds a very tight lead up 4.7% compared to the S&P 500’s 4.5%. The oversold small cap S&P 600 rose nicely by 1.4% on the week although the index still rests below its 200 day SMA. The best performing group Friday were the utilities, not the best of signs, as the XLU rose 2%, and for the week was UNCH on the best weekly volume in years. We discussed recently how the XLU was due for a bounce as it bounced off the round 40 figure and the oversold RSI 30 handle. This week we will really keep a close eye, on another sector that did well Friday, the energy group. The XLE advanced .8% this week, not a particularly good number given the prior weeks 4% loss. Many like to speak of the abundance of new issues being brought to the market to possibly indicate a top, and some in the energy group that have come public somewhat recently have not fared so well. Names like FI down 37%, MRC by 23%, PE by 18% from their most recent 52 week highs. Like the rail plays from our neighbor to the north Canada (CNI CP still look very good), their energy plays were acting much better than our domestic counterparts, however they have started to break somewhat. Names residing in correction mode are CNQ ECA SU. Keep an eye on the EWC as it has fallen for two consecutive weeks now and is below its 50 day SMA for the first time since January.