ChartSmarter Thursday Game Plan 5/12/16

Markets finished firmly in the red Wednesday giving back a good chunk of Tuesdays gains. None of the benchmarks really saw the light of day and the Nasdaq fell 1% and S&P 500 by .95%. The Dow which is cap weighted was hurt by DIS and fell by 1.2% given the triple digit price of the stock (notice bids did come in just above the par number and the 50 day SMA). It was the energy sector that acted the well today with the XLE rising by .3%, and the utility group bumped higher by .4%. The correlation between equities and crude did not behave Wednesday and perhaps it is a one off, or maybe not? The retail sector continues to be pummeled with the XRT slipping more than 4%, not long after a golden cross which many seem to get excited about. The ETF has declined 4 of the last 5 weeks and this week headed into Thursday has softened to the tune of 2.9%. We are big proponents of the round number theory and below is the chart of a former best of breed player JWN that we highlighted in our Monday 5/2 Game Plan. The stock is lower 4 of the last 5 weeks with all 4 down weeks CLOSING at the lows for the weekly range including the weeks ending 4/8 and last which slipped 10.6 and 6% respectively (this week is lower by 5.4% so far). Of course JWN is a mall based retail name, and others that were taken to the wood shed were M which lost 15% after an ill received earnings report (FOSL and PVH slumped 29.1 and 7.5% as well). This has been an ongoing theme with the likes of RH now on a current 10 session losing streak and lower by 68% off recent 52 week highs, not a typo. Perhaps one could say that the S&P 500 is still just 3% off recent all time highs, but that is getting a bit long in the tooth. GDP numbers tell the story.