ChartSmarter Wednesday Game Plan 4/27/16

Markets were bifurcated slightly Tuesday as the S&P 500 rose marginally and it was the Nasdaq that was the worst performer, now on a 4 session losing streak. Weakness so quick after a breakout is a red flag and the promising move on 4/13 above a cup with handle or even a flag formation now looks like it may be in jeopardy. A good indication to the genuine strength of a breakout is seen almost immediately, as the failure to gain traction has to be interpreted as bearish. Although it is important to point out that it is fairly common for a trigger or pivot point to be retested before it can gain some steam. It is necessary to mention that the Nasdaq weakness is largely confined to the big cap techs as the QQQ dropped .5% compared to the Nasdaq’s .15% fell. The IWM shined Tuesday as it advanced 1% and it is comfortably climbing the wall of worry above its 200 day SMA. Last week the ETF gained 1.5% CLOSING at highs for the weekly range while its peers the S&P 500 and Dow Industrials recorded bearish shooting star weekly candles. Energy and materials groups were the top performers today and some best of breed players rose smartly. Below is a chart of XEC that we examined in our Monday 4/18 Game Plan on a pullback on some likely volatility after the previous days big Doha meeting, which amounted to a big nothing. Todays oil move came on the backs of strong crude itself and a well received earnings report by general PXD which spurted higher by nearly 8%, pun intended. It was impressive to0 as 800 lb gorilla XOM yawned after losing its AAA rating from MCO for the first time in 65 years.