ChartSmarter Friday Game Plan 2/26/16

Markets once again displayed bullish behavior as they shrugged off early session lows and went out near highs. For a change the Nasdaq took a well needed break gaining .9% as the S&P 500 rose by .1.1%. For the week headed into Friday the S&P 500 has advanced 1.8% compared with the Nasdaq 1.7% gain thus far. Both benchmarks are looking to CLOSE the week at highs for the third consecutive week. Volume has been soft on the run up. The banks decided to come out of their long hibernation, and of course a single day comes nowhere near signaling a trend change but it was a welcome sign. Bears constantly point out their lack of participation, but that can be looked at through rosy colored lens too as the averages have continued this short term rally without their cooperation. The XLF did complete a bullish morning star pattern on 2/12 and that week did record a bullish hammer candle, CLOSING 5% off intraweek lows in the best weekly volume since the week ending 5/18/12. Of course this group has been subject to a multitude of headwinds with low interest rates, regulations, etc. There was an interesting article yesterday that spoke of 359 stocks are now trading below $1, which may begin to effect the one sub sector that has been holding up well, the exchanges. The delisting of all these names may crimp fees they pay them to remain active. Below is the chart of NDAQ that appeared in our weekend report and we did exit this trade just above 64 on Monday after holding it through the inverse head and shoulders breakout. CME is holding its own but peers ICE and CBOE appear to be struggling. Trade accordingly.