ChartSmarter Tuesday Game Plan 10/7/14

Markets enjoyed some brief moments in positive territory this morning, before finishing the session in the red. The Nasdaq fell .5%, in increased trade, and the S&P 500 dropped by .2% and each met resistance at its 50 day SMA. Reviewing the 3 previous instances this occurred on the S&P 500 (where it attempted to reclaim that important moving average after falling underneath) in February, April and August it recaptured it all 3 times with relative ease. Could todays action signal a trend change? The action in the leading transport group is something to keep a very close eye on. The sector has been carrying the load for sometime now and some rotation would be a very welcome sign, but the fact that no one industry has been able to bump it off the top perch for this length of time may be trying to convey something. There has wide some wide and loose trades among some of the generals in the rails with UNP NSC and KSU as of late. CSX has been erratic as well, but was the only one of the aforementioned names today that did not finish lower recording an ugly reversal. The IYT put in a bearish engulfing candle Monday that aligns with both its 50 day SMA and the round 150 number. Of course todays action was dominated by FDX’s dismal session, but 7 of the last 12 days have shown very bearish closes at the very bottom of their daily ranges. The ETF better calibrate its GPS system northward, or the market as a whole could potentially be in for a trip south.