ChartSmarter Wednesday Game Plan 6/1/16

Markets began the holiday shortened week in a rather listless fashion. The Nasdaq was once again the leader as it gained .3% and one gets the feeling that the benchmark is now a beach ball held underwater and if released is ready for a strong pop. The same could be said for the S&P 500 in regards to the round 2100 figure which was a wall once again Monday. The small caps acted even better as the Russell 2000 rose by .4%. The Dow which we rarely follow recorded a bearish engulfing session to CLOSE above its 50 day SMA (it still sports a double bottom base with a trigger of 17935, but that is looking tenuous at the moment). The price weighted index was hurt by names at or above par with DIS, BA and HD fell. Regarding the best performing sectors today there was some very interesting bifurcation. The utilities group acted the best and it was the staples which lagged and was the worst performer. Merger Monday was alive and well as there was some activity in the software and healthcare groups as SQI and CPXX were acquired, both with very healthy premiums which has to be interpreted as bullish. Some retail names have weathered the storm within the group well and remember those are the ones which generally will act accordingly and flourish once the overall sector can catch some love. A good example is LULU and the chart we profiled in last Fridays Game Plan. Since February it has traded between the round numbers of 60 and 70 and rose above its 50 day SMA Friday and today followed through slightly on decent trade. Watch now for a subsequent move through a double bottom trigger of 67.18.