ChartSmarter Monday Game Plan 3/7/16

Markets proved resilient Friday to end a positive week with the Nasdaq and S&P 500 finishing well off early morning lows. A selloff between 2-3pm could have easily gained momentum into the close, but a late afternoon push higher left the Nasdaq up .2% and the S&P 500 by 3%. For the week both benchmarks CLOSED at or near the very top of the weekly range for a 4th consecutive week. An even more welcoming sign has been the emergence of outperformance by the Nasdaq which has now outdone the S&P 500 for 4 straight weeks too. On a YTD basis the S&P 500 is still behaving better down 2.2% compared to the Nasdaq declining 5.8%. The naysayers continue to distrust the rally. First was the 1950 level, now its trades right at the 61.8% retracement level which happens to be almost exactly at the very round 2000 number. Now that it resides at that level we are hearing the next problem could be the 200 day SMA at 2023. Below is a chart of the SDS and its action today may indicate the average may be due for a pause or even a return to the downtrend as it recorded a spinning top candle bouncing exactly off the round 20 figure. Looking at overall sector performance energy continued to lead the way with a weekly gain on the XLE of 6.5% and the financials rose 4.5% with industrials and tech rounding out the top 4 higher by 3.3 and 2.8% respectively. Yes one can say breadth has been superb and the bottom 3 of the major S&P sectors this week were the defensive staples, utilities and healthcare groups. They were all higher but to see them struggling to keep pace is a good sign. This market definitely has the feel of not letting one in, a hallmark trait of bullish behavior.