ChartSmarter Tuesday Game Plan 11/3/15

Markets opened the month of November with a bang as the Nasdaq led by rising 1.45% and the S&P 500 by 1.2%. The Nasdaq is now sniffing out its all time CLOSING high on 7/20 of 5218.86, which did record a spinning top candle alluding to potential weakness. Of course the week is still very young, but the Nasdaq is looking for its 6th consecutive weekly gain which would be the first since the 6 week streak ending between weeks of 10/24-11/18/14 which rose an impressive 12%. Yes folks seasonality matters. The S&P 500 is continuing its staircase up pattern and many believe it will again take the elevator down in similar fashion to the week ending 8/21’s 5.8% drop and next weeks steep decline before a huge reversal the week ending 8/28 CLOSING 120 handles off intraweek lows on the best weekly volume in years. Every one of the major 10 S&P sector groups rose with healthcare leading the way up almost 2%. Energy, industrials and financials were also robust. Not surprisingly healthcare was among sectors that saw M&A activity with both MDAS and DYAX both up nicely in the 30% neighborhood. The overall group is beginning to show signs that the worst may be over. Names that have been responding well include CLVS which we profiled in our Friday 10/23 Game Plan. It was a stock that never recorded the much talked about “death cross”, admirable considering its company, and the stock showed its leadership characteristics not breaking below its 50 day SMA for the last 5 weeks after retesting a 92.65 double bottom breakout trigger. Below is how the chart was examined in our daily report and it is now 13 handles higher. It always pays to watch the best performing stocks in a group which is under assault to see which ones are weathering the storm the best. They will often be your best actors once the group resumes its uptrend.