ChartSmarter Wednesday Game Plan 4/1/15

Markets took a battering Tuesday a day after a very strong day to start the week, with both the Nasdaq and S&P 500 losing roughly .9% slicing a very big portion of Monday’s gains. This type of volatility is not considered bullish and volume did rise Tuesday creating a double whammy. To show how broad the losses were none of the 10 major sectors gained ground Tuesday, exactly the opposite of Monday as well. Utilities performed best on a relative basis although they of course lost ground on an absolute basis. Making matters worse perhaps was the softness in the top performing healthcare space dropping 1.4% as a whole. The XLV has looked poorly after its 3/20 reversal from all time highs. Since then it is lower 5 of 7 sessions and quickly approaching its 50 day SMA which has given rough support. Leader CELG sliced its 50 day SMA in more than double average daily volume Tuesday dropping 4%. It did the same thing back on 12/23/12 falling 6.5% on its largest volume in over a year. It reclaimed that line the next session. CELG undercut that line last Wednesday in active trade and attempted to recapture that line Monday at the round 120 handle, but was stopped dead in its tracks and fell today suggesting that prior support has now become resistance. Pay attention to the leaders and what they are trying to say.