ChartSmarter Friday Game Plan 5/6/16

Markets gave back early gains Thursday and finished slightly negative. The S&P 500 and Nasdaq were higher by almost .5% early on and the Nasdaq dropped .2% and the S&P 500 ended fractionally lower. Heading into Friday for the week the Nasdaq is lower by 1.2% and looking at a third consecutive weekly decline. The tech rich index has made lower highs and lower lows since the week ending 7/24/15. The S&P 500 is acting “better” down .7% with one session left this week. The Nasdaq is now lower 10 of the last 11 sessions and nearing the 38.2% retracement from the mid April highs after the lows achieved in February. If we fall further than that level where strong uptrends normally find their footing, the ensuing decline could be more meaningful. Something to keep an eye on are the small caps, via the IWM, which fell .4% today and have dropped 2% for the week so far. Sectors that showed some muscle Thursday were energy and staples, with healthcare being the only other group to rise today. Tomorrow we obviously have the employment number which should move markets. If capital flows out of the stock market the bond market will certainly be where that money is parked. Below is the chart of the TLT which is sporting a nice looking double bottom pattern. The 127 handle held firmly on both 3/11 and again on 4/26 and one can enter with a move through a 133.09 trigger. Add to above a long cup with handle pivot of 135.35 in a pattern that began the week ending 1/30/15. That trigger was formed the week ending 2/12/16 which happened to be a bearish shooting star.