ChartSmarter Thursday Game Plan 6/16/16

Markets traded in a very narrow range Wednesday, until the last half hour which sent the markets on their first 5 day slide since February. Prior to that late session slump the action felt like a dead cat bounce following the 4 session drop for the benchmarks. The S&P 500 and Nasdaq finished the day lower by .2%. After the 2.5% decline for the Nasdaq the prior 4 sessions todays intraday response seemed rather muted, and volume while the markets temporarily bounced was uncooperative. Notice how on the Nasdaq volume rose with each successive day during the 4 day losing streak, although Tuesday could be construed as a positive with the spinning top candle. The failure to CLOSE above the 50 day SMA today, which is beginning to slope lower for the first time since March may be trying to tell investors something. Crude has been a dead weight on the indexes as it lost ground for the fifth consecutive session and that round 50 number has been a thorn in its side, even with some greenback weakness. Utilities, healthcare and staples played the rare laggard role as they were the worst performers of the day. Speaking of rare, the financials perked up a bit Wednesday, and negative sentiment surrounding the group is pervasive. The group was the days third best performer and I hear the incessant conversation that the markets can make little headway without their participation. Maybe the extreme negativity means a turn is not far around the corner. The Fed which tempered its outlook, which normally has been seen as a bright spot for stocks did not energize the markets. Bad news is now being perceived as bad news in stock prices and we think that is a good thing, but the market may continue to descend as it rightfully should. If the Fed has to temper its outlook with rates basically at zero, it is really hard to spin that as a positive. We did see some potential greenshoots with the NUE raising forecasts. The industrial sector eked out a small gain and the chart of FLS is below which we profiled in our Thursday 6/2 Game Plan and it is now just right at the round 50 number.