ChartSmarter Friday Game Plan 12/18/15

Markets fell Thursday after very good behavior the first 3 days of the week. The strong correlation between crude and the markets remains as the energy group was the worst performer down better than 2%. 9 of the 10 major S&P groups fell with just the utilities gaining ground, albeit fractionally (XLU is higher by 4.5% this week and up everyday this week so far). The S&P 500 fell 1.5% and Nasdaq lost 1.35%. Both the Nasdaq and the S&P 500 recorded bearish engulfing candles. Heading into Friday the Nasdaq is higher by 1.4% and the S&P 500 by 1.5%. Was the Fed hike yesterday a “sell the news” moment or are the benchmarks just taking a well needed break after some solid moves to begin the week? Select retail names (get ready to hear “select” a lot going forward with the active management versus passive argument seemingly talked about incessantly) were hit Thursday. Looking at some of the ETFs first the XRT is now 15% off recent 52 week highs. This fund seemed to be able to do no wrong as it gradually moved higher through the spring of this year. Once it was unable to take out a good looking cup base trigger of 51.35 that began the week ending 4/3/15 its chart began to decompose. Since the week ending 7/24 which it sliced the round 50 number decisively it has lost ground 12 of the last 21 weeks including some large uncharacteristic losses of 6 and 8.4% the weeks ending 8/21 and 11/13. In its downtrend included a 3 week period between 9/4-18 where the ETF CLOSED on a weekly basis all within just .10 of each other. Below we look at the chart of PVH and how it was written up in our Thursday 10/15 Game Plan. It has dropped 10 of the last 15 weeks and is now off by more than 40% from recent 52 week highs. Notice the flag pole was 20 handles giving it a measured move to 76 where it trades roughly trades at currently. With an RSI in the mid 20’s it may be ready to move higher temporarily.