ChartSmarter Tuesday Game Plan 1/5/16

Markets were greeted the New Year Monday with potentially a big wake up call for ’16 regarding volatility. Of course one can not make a big conclusion on a single session, but today hurt. With less than one hour before 4pm, 6 of the 10 major S&P sectors fell by more than 2%. Thanks to a late afternoon rally none did. The top performer on the day was energy, a sector that has been the worst performer the last 2 years running (one would have expected a better showing with oil given Middle East developments over the long weekend). Technology, healthcare and financials were the worst sectors, each falling by 1.8%. The round number theory came into play with the benchmarks as the Dow (nicely above) and S&P 500 finished above the 17000 and 2000 figures. Obviously this is not infallible as the Nasdaq CLOSED at the 5000 number on last Thursdays holiday shortened session. We have said numerous times when the Nasdaq underperforms its a bad sign for the overall market as it speaks to a lack of risk taking, in a healthy way. One most likely heard ad nauseam how the FANG names were hit hard Monday, and those 4 names were responsible for the bulk of 2015’s moves. Perhaps 2016 will be a year for the gold bugs, as the commodity seems to be acting like it should recently to a degree in turmoil. In the chart below that I originally published in our Monday 12/7 Game Plan it shows how it is holding the round par figure nicely. Since its inception in 2005 the ETF recorded 8 consecutive years of gains, with 5 of the 8 advancing by at least 17.5%. It currently is on a 3 year losing streak having dropped 28.3% in 2013, 2.2% on 2014 and 10.7% in 2015.