Markets were little changed Monday to begin the week with the Nasdaq and S&P 500 closing lower by .1%. Action was not as subdued as the benchmarks would have led you to believe as the Nasdaq was up better than .4%. It did try to go positive in the last hour of the session but was unsuccessful. The tech index did escape recording a bearish engulfing day with the mild rally late in the day, but did sport a doji session which often indicates uncertainty of the prior trend which has been to the upside. Perhaps some exhaustion is unfolding. On a positive note the small caps outperformed today rising .5% and that could be a good indicator going forward. Merger Monday hailed a blockbuster deal with AGN and PFE combining in the largest ever deal in the space and interestingly both lost value Monday. It followed the lackluster performance of the big deal last Monday in the leisure space between MAR and HOT. Monday also brought some disclosures to the commodity space with Elliott announcing a 6.5% stake in AA. The stock rose more than 4% today and met resistance at its 50 day SMA. It continues the trend of high profile names venturing into the commodity space attempting to catch knives. Ichan has been bloodied by FCX and CHK so far. FCX has declined 12 of the last 14 sessions since recording a bearish dark cloud cover candle completed on 11/4. CHK is in free fall now almost 80% off recent 52 week highs. It remains to be seen how theses investments will pan out but it surprises me how few of these big names most likely do not employ technicians. Seeing some of the returns this year of well respected funds suggests they could probably use some help in that arena. Select material plays have been acting well and a name we were WRONG about is best in breed VMC. Here is how we thought the chart would play out in our Tuesday 11/17 Game Plan. A tight stop loss limited the damage.
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