ChartSmarter Monday Game Plan 5/9/16

Markets overcame some early weakness following a weak employment report and went out on highs for the session. The Nasdaq rose .4% and the S&P 500 was not far behind gaining .3%. On a weekly basis however the S&P 500 fell half of what the Nasdaq did dropping .4% and has now outperformed for 3 straight weeks. The IWM lost 1.4% for the second consecutive week, but Friday recorded a bullish piercing line pattern candle precisely off a rising 50 day SMA. One of the big takeaways from this week was the weakness in the energy space with the XLE, ending a 4 week winning streak dropping 3.3%. Of course their is an inverse relationship with the greenback and a look on the UUP chart below, shows some positive developments. The ETF is on a 4 session winning streak following bullish piercing line pattern Tuesday at support in a falling wedge pattern. To further support the positive narrative, volume was the heaviest this week in the last 7 months. The dollar rallied today even in the face of the employment report that makes a rate hike in the near term unlikely. Good reactions to bad news is something that always should be paid attention to. Retail continues to be an issue and some high profile names have put up some dreadful weekly returns. LB lost 11.1% this week, and 11.5 and 8.6% the weeks ending 2/5 and 4/8. The former best of breed is now 31% off recent all time highs at the very round par figure (it registered just one daily CLOSE above 100 on 11/4/15). Interestingly JCP is also 31% off its recent 52 week highs and slumped 11% this week as well, and is on a current 7 week losing streak. Not surprisingly SHLD fell almost 18% this week and former generals BKE and LE surrendered 9.5 and 8.9%. The consumer seems to be spending more of their money on stocks than clothing merchandise, as the market remains the “only game in town”.