ChartSmarter Wednesday Game Plan 6/29/16

Markets rebounded smartly Tuesday with the Nasdaq taking charge higher by 2.1%. To put it in a little perspective however todays 97 handle advance is less than a third of the prior 2 days 315 point slump. The S&P 500 rose 1.8% and the Russell 2000 “lagged” gaining 1.6%. The S&P 500 recaptured its 200 day SMA on better than average daily trade but lighter than the prior two sessions. The Nasdaq now is on the verge of a potential bearish “death cross” and while the S&P 500’s 50 day SMA is still well above its 200 day, but the 50 day SMA is now starting to slope lower. I have mentioned this in the past but it is relevant once again, that this type of volatile action is more indicative of tops than bottoms. Bottoms take on a smoother, gradual rounded fashion, and tops sport more erratic behavior. Energy and financials were the top two performing sectors Tuesday rising 2.8 and 2.6% respectively. Healthcare came to life as well Tuesday and below is the chart of MDT and how we profiled the name in this Mondays Game Plan. The more volatile biotechs has a fine session of their own with the IBB jumping almost 4%. Looking on the weekly chart one sees how the round numbers have come into play. The week ending 2/12 recorded an intraday low of 240.03 and Mondays low was 240.30 creating a double bottom (one may call the week endings 3/18’s low just below 242 a triple bottom). It is most likely a dead cat bounce and may very well have room to run into the declining 50 day SMA approximately 17 handles higher.