ChartSmarter Wednesday Game Plan 2/17/16

Markets charged out of the gate Tuesday, anxious to continue where they left off last Friday. A trend might be beginning here as the Nasdaq has been outperforming and today it rose 2.3% compared to the S&P 500’s 1.6% advance. Benchmarks shrugged off a weak oil close, as crude was up handsomely in the premarket, so perhaps we are beginning to see an unraveling of that positive correlation. Indexes in the late morning hours looked headed for a reversal lower, as there counterparts in Europe did, but were able to recapture their former mojo. Gold was hit to the tune of almost 3% and the GLD looks ready to retest a powerful breakout above a cup base pivot point of 114.09 taken out last Thursday. That session also recorded a bearish shooting star pattern at levels last seen almost exactly one year ago. When breakouts are threatened that promptly after a move it often speaks to trouble ahead. Below is the chart from our 2/11 Game Plan of RGLD, one of the laggards in the space now off 46% from recent 52 week highs (peer GOLD is just 7% off its own). Keep in mind laggards will normally continue to keep underperforming. Additional things to like today included the utilities and telecom group, which were higher on the day, but were the “weakest” sectors. Before we get to giddy though lets keep ourselves grounded as the Nasdaq will be looking for just its third 3 day winning streak tomorrow in the last 2 months and the last 2 times it occurred the day following declined 1.3 and 2.2% on 12/17 and 2/2. That being said the index is very oversold still 300 handles lower than its downward sloping 50 day SMA.