ChartSmarter Monday Game Plan 12/7/14

Markets exploded higher Friday, regaining all of Thursdays weak action. The Nasdaq and S&P 500 rose 2.1% and the IWM “lagged” rising just 1% as a weaker dollar going forward may be here to stay. Of course smaller companies are less effected by a stronger dollar as they derive the vast majority of their revenue domestically. The Nasdaq is now higher 9 of the last 10 weeks and if you were on vacation, the weekly gain of .3% was anything but tepid. The S&P 500 was basically UNCH for the week, however some bullish developments are taking place. The last 3 weeks have traded extremely tight with CLOSES all within 2 handles of each other. That type of action could lead to explosive moves with a breakout above. The 2100 number since 8/21 has recorded only 4 finishes above on Tuesday and early November, but interestingly no weekly CLOSES above. On a YTD basis the Nasdaq, which has now outperformed the S&P 500 for 3 consecutive weeks, is higher by 8.5% and the S&P 500 by 2%. Fridays move to me was a bit suspicious as it seems many were caught on the wrong side of the trade on back to back sessions. Benchmarks have been following almost textbook scenarios on a seasonality basis with ramp ups in early October and now December seems to have been kicked off to the bulky start it often does following an up first day of the month. Not much makes sense these days but one aspect will never be shunned and that is price action. So I will remain long, with occasional sleepless night until the technicals tell me otherwise. Even gold joined the party, and a chart I posted earlier this week shows it bounced not surprisingly off the round par figure which happened to be support “looking left” on the chart dating back to ’09. It rose almost 3% this week snapping a 6 week losing streak and Monday it completed a bullish morning star pattern.