ChartSmarter Tuesday Game Plan 11/4/14

Markets were listless to start the week Monday with the Nasdaq eking out a small gain and the S&P 500 UNCH. After the Nasdaq’s 8.5% move the last 2 weeks some consolidation would be welcomed. The S&P 500’s stubbornness to give anything back after its two week romp should be construed as bullish. Without sounding to much like a broken record energy was walloped again today. The XLE did record a bearish “death cross” in late October, although people make the pattern out to be more reliable than it really is. That being said however the downward sloping 50 day SMA and its failure to trade above the neutral 50 RSI figure since late July, with the brief exception of a small period of time in August, should have traders on alert. The ETF has formed a bearish rising wedge and a move below 85.50 can be sold. Perhaps the good fortune of finding to much oil here domestically may ironically turn out to be a negative. To much supply, and an economy not robust enough (although recent GDP and this mornings ISI figures were stronger than forecast) to absorb the excess is worrisome. I have been a skeptic of just how strong the economic recovery really is, but I am always looking at unique ways to really authenticate its health. Perhaps VPRT can shed some light as more activity in business cards suggests the climate is improving. Last Thursday the stock recorded its second straight blockbuster earnings blowout jumping 16.7% after a 30.5% explosion on 7/31. Here is the chart the way it was written verbatim in our Wednesday 9/17 Game Plan. It is now up close to 30% from the highlighted entry.