ChartSmarter Monday Game Plan 4/4/16

Fridays action displayed the old adage, “its not where you start, but where you finish” brilliantly. The Nasdaq has to be given the MVP this week with a gain of 2.95% compared with the S&P 500’s 1.8% jump, and Friday it CLOSED firmly above its 200 day SMA after shying away from intraday highs over it on Wednesday and Thursday. The last 4 sessions of the week it outperformed the S&P 500 and that “risk on” feel has the bulls feeling confident. On a YTD basis it still trails but is now lower by just 1.9% and the S&P 500 has risen 1.4%. The IWM has to be given an honorable mention as it was higher by 3.7% this week and we know small caps are a good leading indicator. All 3 of the aforementioned benchmarks also were sturdy in the face of oil’s drop of 7% (below is the chart of SLCA in the space which we profiled in our Tuesday Game Plan this week). The top 4 best performing sectors this week came from both defensive and traditional growth groups which shows the breadth of the rally. Technology and staples rose 2.5%, unlikely dance partners, and discretionary and utilities gained 2.4 and 1.8% respectively. With all the positive news I just declared, one has to be balanced in their views and be on the look out for what could potentially go wrong. Of course price action is king, and one should remain long but bears could point out the VIX may be nearing a bullish MACD crossover. These are all secondary indicators, like I said to price and remember the vast majority of all the signals most traders use REACT to price and that is why price will always be king.