Markets woke up with a hangover Monday after some excitement this weekend with so real bullish sentiment over how the indexes closed out last week. The Nasdaq CLOSED 275 handles off Wednesday’s intraday lows and the S&P 500 by almost 100 points of its own. Both the Nasdaq and S&P 500 dropped 1.6%, giving back more than half of Fridays gains. The averages never made it into positive ground and after a failed attempt in the early afternoon they went out on session lows, classic bear market action. The strong correlation between energy and the markets was in full effect Monday with crude slumping by almost 8%. Both Brent and WTI finished near the round 30 figure, and perhaps that will offer some temporary support. The XLE on Wednesday bounced precisely off the round 50 handle to demonstrate the theories influence. A Barron’s article over the weekend highlighted how shares in IP could rally by 50%. Well the must really love it more now after Mondays 10.6% haircut following a downgrade by Citi and with the stock now off 44% from recent 52 week highs one can question the timing of the move, or is it signaling something sinister. Its dividend yield now stands at 5.4%, almost getting frothy. Some rationality seems to be entering the markets and a rare but perhaps welcoming example is gold. Back in our Monday 12/7/15 Game Plan we put up the chart below to highlight how it was acting better after a period of doing just the opposite. Once again the very round par figure showed backbone and it is now more than 6% higher from that session. Welcome back Mr. Glitter.

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