ChartSmarter Wednesday Game Plan 10/7/15

Markets fell Tuesday as the S&P 500’s 5 session winning streak came to an end. The benchmark lost .4% chopping intraday losses in half. It has some work to do getting above the round 2000 handle. The Nasdaq was affected again by biotech and fell by .7%. Todays action was constructive in my opinion as the indexes had every right to buckle at lunchtime lows but took a stand. It seems as oil is having a big impact on markets as a correlation now exists. Crude rose more than 5% Tuesday and it is interesting to hear almost a universal call that its bottom is in. Perhaps as we suggested the Glencore debacle last week may be looked at as a defining moment in the overall commodity rebound. But we also hear very sanguine comments with a CNBC guest proposing FCX may be looking to part ways with its energy exposure at the bottom. It does have a few things going for it with the Middle East premium on the rise, a weaker US Dollar (its chart may be on the verge of a “death cross”) and a steady decline in oil rig counts. The perfect storm may be here and the WTI chart has a nice flag pattern following a good looking, bullish 3 white soldiers pattern in late August. You can almost hear the hissing sound as shorts are being unwound and the once firmly inflated “short” tire is anything but at the moment. Materials were the second best performing group Tuesday and perhaps it is fitting as AA gets ready to kick off earnings season Thursday after the close. It roared past a bullish ascending triangle pattern Monday just above the round 10 figure.