The Nasdaq led the way once again to start the holiday shortened week with an advance of .4%. It met resistance earlier in the morning at the round 4600 figure and fell 22 handles, but recaptured everyone of them into the close in bullish fashion. Technicians put great emphasis on CLOSING prices. The S&P 500 undercut its magical round 2000 number intraday, but managed to finish above. It would not be a stretch to say that the bulls and the bears will have a tug of war at both of those round figures. Remember stocks as well as indexes will normally stall at round numbers, and build bases or retreat. Among the losing groups Tuesday was energy. We discussed not to long ago the concern brewing as many in the group had sliced their 50 day SMAs, most in firm trade. Former leaders are now burrowing beneath that important line like an EOG or PXD. One of the issues worrying us was the relative weakness in the Canadian energy names which in early August, began to slip up. The likes of ECA or SU and CNQ all began to falter and that may have been some foreshadowing of what was to come. The overall group needs some repair of their charts and the sooner the better. The more time these charts reside beneath their 50 day SMAs, the more bearish the case becomes. To give one example of why we demand CLOSES above our pivots and price CONFIRMATION, is SU. It never crossed above the 41.25 pivot we had in our Thursday Game Plan, thus avoiding todays almost 3% loss in active trade.
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