ChartSmarter Wednesday Game Plan 3/30/16

Markets continue to linger on their unpopular trudge higher. It has confounded many, myself included, and anyone who admits they were not bewildered at some point this year is most certainly not being honest. I am frequently asked how can this market keep plowing higher when the economy does not feel vibrant, or their is so much turmoil internationally. The answer is simple as a technician, which is don’t fight the tape. If one wants some sort of logical answer perhaps one can point to Yellen’s reluctance to raise rates in her talk today. That would put a lid somewhat to a move higher in the greenback, in theory give a lift to emerging markets and commodity plays. But the real bottom line is their does not seem to be much competition to equities here and that is contributing vastly to this move higher. A healthy development Tuesday was the performance of the Nasdaq (not to mention the markets brushing off a soft crude session) which outdid the S&P 500 by a comfortable margin rising 1.7%. Semiconductors have been helping, as well as software, but today healthcare which has lagged was among the top 3 strongest S&P sectors today rising 1.2%. Below we look at a chart of the XLK which broke out from a 44.02 cup with handle trigger. Doing homework this weekend I did notice that maybe one of the reasons for the groups laggard status was that the 6 IPOs that came public this year all came from the bio/pharma space. MS and GS were the lead underwriters to some that have sparkled. Stocks like EDIT, AVXS, BGNE and SNDX although very thinly traded have provided “hearty” gains, pun intended.