ChartSmarter Monday Game Plan 2/23/15

Markets continue to roll along as the indexes started with modest losses early on and from 11am just kept going higher to go out on highs for the session. Both the Nasdaq and S&P 500 rose .6% Friday with decent volume backing up the move. For the traditionally favorable holiday shortened week the Nasdaq gained 1.2% and the S&P 500 .6%. Breadth continues to act very positively with new 52 week highs versus 52 week lows overwhelmingly in the plus column. For the leading Nasdaq Tuesday the tally was 131-15, Wednesday 91/18, Thursday 128-18 and Friday 92-9. My hunch is there will be some stalling action and most likely a prudent pullback after the tech heavy benchmark collides with the very round 5000 handle. Remember a rising tide lifts all boats but some sectors are standing out to us as potential leaders. The homebuilding group which we know has its pulse on not only the genuine feeling of the consumer but with the economy as a whole too. Sure one can look at the pure plays like LEN which is now higher for 5 consecutive weeks and above the round 50 handle, but we like to dig deeper and see how the periphery plays are performing. There we find a couple names like POOL or TILE. Not “household” names, pun intended, but indicative of what is going on around the edges. Below is how our chart appeared in our Friday Game Plan. It is flagging just under the round 70 handle. TILE screamed higher by 15% Thursday after a very well received earnings report and now above its 200 day SMA for the first time in 11 months.