ChartSmarter Friday Game Plan 10/9/15

Markets are continuing to defy the bears as indexes went out near highs again after some early weakness. The S&P 500 led gaining .9% and the Nasdaq overcame a deficit of more than 1% intraday to finish higher by .4%. The S&P 500 has now advanced 7 of the last 8 sessions and 6 of the rising moves CLOSED at or near the highs for the daily range. The only exception was the spinning top recorded on 9/29. It recaptured the round 2000 figure on a CLOSING basis something it dreadfully failed at back on 9/17 after a reversal of 1.5% from session highs. Heading into Friday the S&P 500 is up 3.2% and the Nasdaq by 2.3%. The S&P 500 is looking to outperform the Nasdaq for a third consecutive week heading into Friday and it now rests 5.8% off recent all time highs to the Nasdaq’s 8%. Responsible for much of that is the emergence of energy and materials which continue to just pour it on. Many were positioned short there and those stakes could take time to unwind. How long will it take? The obvious answer is no one knows but their certainly seems to be some real rotation into the sectors. Delving into the retail group and talking so much about names retesting their 8/24 lows and holding a subsector of the group, discount plays are not keeping pace and have failed to hold those lows. The charts of DLTR and DG look like anything but “cheap”, pun intended, as both reside 26 and 18% off recent 52 week highs.