ChartSmarter Monday Game Plan 2/8/16

Markets slumped on Friday with the Nasdaq being torpedoed lower by 3.25% and the S&P 500 slipped 1.85%. For the week the Nasdaq lost 5.4% and now rests 17% off recent 52 week highs. Tech was not helped at all by the FANG (NFLX and AMZN now 38 and 28% off most recent 52 week highs) names continuing to sink and LNKD and DATA lost 44 and 50% Friday alone, not a typo. We always talk about the concerns of Nasdaq underperformance, and in Tuesdays Game Plan we looked at the year end finish of the S&P 500 last 2 times a president left office and how dismal the returns were (2000 it lost 10.1% and 2008 fell 38.5%). The Nasdaq cratered 39.3% in 2000 and 40.5% in 2008. The S&P 500 lost 3.1% and is currently 12% off recent 52 week highs, where the small cap ETF IWM has surrendered 24% off recent 52 week highs, as the greenbacks drop this week exacerbated the retreat as their larger cap rivals will benefit from US dollar woes. There have not been to many place to seek shelter by the utilities have been brave as one would expect in this low rate environment. The XLU is just 5% off recent 52 week highs and is on a 4 week winning streak. This week ROSE 2.5% on the greatest weekly volume in the last 5 years and it is approaching a cup base trigger of 49.88 in a base almost precisely one year long (look for a challenge of that pivot sometime in the next 6-8 weeks). This group certainly has not been your grandfathers traditionally sluggish actor recently. Of course this year is still very young, but the group is the only sector up in ’16 by 7.6% thus far (the next closest are the staples DOWN 1.7%). It has been the S&P’s best performing sector 2 of the last 5 years up 19.9 and 29% in 2011 and 2014 respectively. The XLY is down 10.2% YTD which of course covers many of the retail names which the economy depends so strongly upon. A few reported earnings Friday with DECK finishing lower by 14% off intraday lows. Former best of breed HBI lost more than 18% this week and RDEN which traded near a 50 handle is ’13 is now below 6 and off 66% from recent 52 week highs. For the week it lost 25.6% while peer EL gained almost 7%. Below is the chart of HD and precisely how it was presented in our Friday Game Plan.