ChartSmarter Tuesday Game Plan 3/29/16

Markets began the week in muted fashion which we have become accustomed too. The Nasdaq finished the day lower by .15% and the S&P 500 gained .05%. The S&P 500 has performed better in ’16 and its no accident its chart does as well. It has now completed a handle on a double bottom base and a move above 2057 should put the benchmark on a clear path toward the round 2100 figure. This week certainly feels important as last week was the first down week in the last 6 and if this week could trade sideways it could give more of an indication that this is a healthy pause and not ready to roll back over. On a seasonality basis April does tend to be one of the strongest months of the year, and obviously the month before the old adage “sell in May and go away”. One thing that is concerning is the action in the high yield space via the HYG. The correlation between the indexes and the ETF can be high as an appetite for risk is what the 2 have in common. Monday saw the fund lose ground for a 5th consecutive day, but perhaps it will find support here as it retests a bull flag breakout above an 81 pivot originally taken out on 3/10. It was almost immediately retested on 3/16 and held and a second test so quickly would not be perceived as a bullish sign. Bulls should look for the Nasdaq to shine and the software group is trying to do its part. Recently ADBE and ORCL put up nice earnings reactions and a smaller name we profiled in our Wednesday 3/9 Game Plan (chart below) QLIK jumped 9% after some possible suitors were mentioned. Notice it did hit a wall at the round 30 number which almost filled in a gap to the upside there too on the 1/5 session. That round 30 handle was pesky resistance last October, November and December too.