Markets gyrated between gains and minor losses Wednesday a day before the ECB could energize or flatten out the indexes. The Nasdaq and S&P 500 were higher to the tune of .5% and one had the sense that investors were waiting for the news tomorrow or cleaning up their shorts beforehand, so the chances were markets would register small gains were slim. Looking at the Nasdaq if one wanted to take a rosy view you could say a bull flag is forming, another couple sessions would take care of the pattern. If a breakout were to occur a measured move above 4700 could see a subsequent move 500 handles higher. Remember belief in this rally is still being shortchanged. That is a very optimistic scenario of course, but the tech heavy benchmark did record a weekly bullish morning star pattern the week ending 2/19 and the next 2 weeks put up decent weekly gains with volume expanding each week. Looking at credit markets as they will often give early warnings signs the 10 year treasury yield is now near the 1.9% tab which notice was nice support the weeks ending dating back to last August and September. Will former support now become pesky resistance? That could be a cue for markets to gain further steam from here. Energy led the way on Wednesday although its response today was feeble compared to Tuesdays thumping. The XLE did hold the round 60 number but its paltry gain of 1.6% did little to scare bears after the previous sessions 4.2% dumping on firm volume. We would continue to monitor the best of breed names in the space and PE which is above both its 50 and 200 day SMAs and whose 50 day is above its 200 day (a rarity in the sector) fits the bill. The round 20 number once again proved formidable to CLOSE above and attempting to rid itself of teenager status has been difficult. If it can actually accomplish the feat, it could be a very powerful move indeed. Below is the chart from yesterdays FULL Game Plan that we publish once a month to demonstrate what we bring on a daily basis.
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