ChartSmarter Monday Game Plan 10/26/15

Markets roared ahead Friday to go out on highs for the fourth consecutive week. Both the Nasdaq and S&P 500 recaptured their 200 day SMAs. The S&P 500’s is beginning to tilt upward and the Nasdaq which has outperformed for some time has not seen its 200 day SMA slope lower. Like individual stocks one likes to see this very important line reclaimed in a rapid fashion. It took both 2 months to do so and that may be a concern. However the S&P 500 is up better than 8% in October thus far and a strong October is very often indicative of a continuing rally into year end, according to this blog post by Ryan Detrick. For the week the Nasdaq rallied 3% and the S&P 500 by 2.1%. YTD the Nasdaq is higher by 6.2% and the move Friday the S&P 500 is now up 1%. To give a balanced perspective some concerns were seen in the retail sector which did not participate in Friday’s euphoria. We all know that the consumer makes up 2/3rd’s of GDP so weakness in that group was something to monitor. UA lost 8% this week on the largest weekly volume in 17 months after a ill received earnings report Thursday. VFC lost almost 13% after it reported numbers Friday. Below is a chart of how we profiled SKX in our 9/22 Tuesday Game Plan. Friday it was harpooned lower to the tune of my than 30% (it recently split 3:1 on 10/16). WHR had a flammable reversal Friday as well CLOSING 22 handles off intraday highs. Other concerns are the actions of some former best of breed tech plays such as PANW. The software security play lost 4% Friday and is now on a 5 week losing streak. That being said it is hard to ignore the powerful moves of some of the big tech plays AMZN GOOG and MSFT. They are 3 of the 5 largest components in the Nasdaq. Next week should be interesting to see if the unusual 80 handle which put the index above the round 5000 number will be a bull trap.