ChartSmarter Tuesday Game Plan 6/7/16

Markets overcame a mild afternoon sell off after a strong start, to go out just off session highs. The Nasdaq and S&P 500 both advanced nearly .5% and it was the Russell 2000 which motored higher by 1.1% showing an appetite for risk continues. Today was one of the first Mondays in some time that I do not remember a decent sized merger or acquisition announced and the lagging groups were among the most defensive with the staples and utilities leading the way lower. The XLU was the only major S&P sector to slip Monday, but it did CLOSE just above the round 50 number with the last 2 days recording indecisive spinning top candles which generally tend to show some exhaustion from the prior trend which is in place. Interesting was the lack of participation from the semiconductor group today with the SMH falling .2% demonstrating weak relative strength. It could be excused given the powerful 11% run up during the current 3 week winning streak. One gets the sense their is a magnetic pull to the round 60 number which was touched the weeks ending 5/29-6/5/15, with no CLOSES above on a daily or weekly basis. Energy displayed the most muscle to open the week with the XLE gaining 2.2% and if it can get past the 68.92 cup base trigger or can be interpreted as a bullish inverted head and shoulders pattern the market can really gain some momentum going forward. To be specific it was the services and equipment group that showed the most robust gains and below is a chart of DO from our Thursday 5/19 Game Plan. Perhaps the reversal late last week was a bear trap and now is ready to pile on some gains. The stock jumped 7.1% Monday.