ChartSmarter Tuesday Game Plan 12/2/14

Markets began the month of December on a sluggish note with the Nasdaq sustaining the most damage basically doubling the losses of the S&P 500 falling 1.3%. Benchmarks started the day in the red and the Dow almost made it to UNCH territory, but the Nasdaq and S&P 500 never made it close. Volume was elevated and perhaps most troubling was that the first day of the trading month is normally a very well received, as the cliche goes trade the first day and stay away. The transports took it on the chin Monday as the IYT dropped 2.5% after a negative intraday reversal Friday to close at session lows, albeit up due to gains in the airlines and trucking groups. Former best of breed name GBX has now slashed 30% off its value in just the last two days. The ETF is working on a current 7 week winning steak. The energy patch staged some decent reversals Monday to the upside after the beating they endured last week. Names like EOG PXD DVN all finished in the black. Of all the aforementioned names DVN looks the best. Many of these names have been severely damaged and DVN is 26% off its most recent 52 week high, but we needed some technical signals to get the green light on any potential entries. That came today via a bullish engulfing candle which happened to coincide with the round 60 handle. When a couple of data points cluster it gives the outcome a greater chance of success. Volume was inflated as well.