ChartSmarter Monday Game Plan 8/18/14

Markets concluded the week higher Friday with mixed action by the benchmarks, but by and large bullish behavior as indexes bounced off session lows. The Nasdaq acted the best as it turned a .8% morning loss into a .3% advance. It also outperformed the S&P 500 for a fifth consecutive week higher by 2.1% compared to the S%P 500’s 1.2% move. The Nasdaq is now just below a 4486 double bottom trigger and a break above will put the index at decade old plus highs. It is besting the S&P 500 on a YTD basis as well up 6.9% to the S&P 500’s 5.8%. Sectors we will continue to monitor for clues as to which direction the markets will be heading into the fall are the transports, energy and retail. The transports did recapture some of their mojo as many of the rail leaders lifted in the 3% range for the week including NSC UNP CP CNI. NSC continues to be our favorite as it bounced off the round par figure this month and retook its 50 day SMA this week. Energy made a brief comeback Friday. Was it the headlines from Ukraine or were they just oversold? It is too early to tell but generals in the group like EOG and DVN look like they may be potentially shaping out bearish head and shoulder patterns. Most concerning of all is the tape of any retail names. The disappointments keep rolling in and this week M was most concerning in my opinion. The stock slumped 4.6% this week, but did manage to find 200 day SMA support. Others that put their share prices “on sale” this week were KATE down 17.5% for the week. FOSL and JWN bled to the tune of 7% as well. This week brings plenty more reports from peers, URBN DKS TGT GPS GME ANN, who have not been knocking the cover off the ball.