ChartSmarter Tuesday Game Plan 10/14/14

Markets faltered into the close to start the week Monday. Hallmark bearish traits are markets that start off fast, although today does not meet that criteria, but finish off strongly upon the lows. The latter part of that sentence was dramatic. The S&P 500 sank 1.65% and the Nasdaq by 1.5% as volume ballooned. The fact that trade was substantial on a “holiday” was something to be stay aware of. To me the biggest change that has taken place recently has been the one in psychology. Of course I am strictly a technician, but the mindset of people being trained to by each dip I think has taken a blow. Now that being said I believe there will be some very rewarding opportunities on the long side, if you can shorten your timeframe. Surely no one knows exactly how long this bearish stance will live on, but we know there can be some breathtaking rallies in the midst of them. In my opinion, and that means little as price rules everything, they will merely be dead cat bounces. We can basically point to any major sector and dissect its destruction, and scanning through hundreds of charts this weekend, the decline of the economically sensitive paper plays caught our attention. Names like KS down 26% from its most recent 52 week high (chart below). Other strong peers like SEE down 19 of the last 26 days and 18% off its most recent 52 week high. They attempting to put a “wrap” on this market?