Markets finished lower Monday with some bearish reversals in the indexes. The Nasdaq was the hardest hit lower by .6% and reversing near all time highs. Top component AAPL will report earnings after the close and it was higher almost 2% and is just below a 133.70 cup base pivot point. The biotech group was hit very hard today, and we discussed the negative divergence regarding the IBB with volume in Mondays Game Plan. The EFT lost more than 4% today CLOSING right at 50 day SMA support, now for the fourth time since last December and all occurred in very heavy trade. Normally you would like to see just the opposite with light trade on its way down to the moving average and a surge in volume as it bounced off it. That line seems to be getting very heavy. As many in the group were pounded today GILD dropped less than 1%. Perhaps the Ackman rumors will surface at some point soon. Regardless the price action should be respected. Small caps were lagging large cap names Monday and remember they do lead at market tops and bottoms so that should be something to keep an eye on in the near term. Last Monday we discussed the retail XRT which undercut its 50 day SMA in heavy trade 4/17. The ETF underperformed Monday off by 1%, and looking to slice that important line again, and although it rose everyday last week volume was limp, with not one session all week coming in above average daily volume. The XRT is dominated by small cap names and if you put the pieces together a narrative with the small caps is developing. Below is how we profiled XRT in last Mondays Game Plan.
This article requires a Chartsmarter membership. Please click here to join.