ChartSmarter Monday Game Plan 1/5/15

Markets began 2015 with a whimper after a decent start to the session Friday. Early gains were quickly subdued and a late afternoon rally left the Nasdaq and S&P 500 just short of UNCH territory. For 2014 both the Nasdaq and S&P 500 recorded their third consecutive yearly double digit gain with the Nasdaq up 13.4% compared to the S&P 500’s 11.4%. The Dow which we do not focus on to much gained ground for a sixth straight year (the index was up better only once in recent memory with a NINE year winning streak between 1991-99). For the week the Nasdaq finished lower by 1.7% and the S&P 500 by 1.5%. What will 2015 bring? The truth is no one knows but both the bulls and bears can hang their hats on recent developments. Homebuilders showed some decent relative strength and the group is often a good indicator of not only the mood of the consumer, but the genuine health of the overall economy. The XHB rose for a third straight week, and 10 of the last 12, ignoring the overall markets gloomy stance. Bears can look to some contrarian evidence that a top could be forming with TrimTabs data showing both mutual fund and ETF enjoyed their largest weekly inflows ever. When the masses jump on the bandwagon, it can often be a tell that trouble is lurking not to far away. For those looking for a prediction of the best performing group of 2015, I will say energy. Its not far fetched given how low the group has fallen, and take it with a grain of sand. As always pay very close attention to the charts, employ strict discipline, but count on the fact that if energy does indeed happen to lead the way in 2015 yours truly will be reminding you.