ChartSmarter Thursday Game Plan 7/14/16

Markets were slightly bifurcated Wednesday with the S&P 500 marginally higher and the Nasdaq down .3%. There was a good news bad news scenario regarding the Nasdaq as it recorded a bearish engulfing candle after a 470 handle run in just 12 sessions. It did however CLOSE above the round 5000 figure. The defensive utility and staple sectors decided to come out and play and they were the 2 best performing groups Wednesday. Energy which was a clear leader yesterday was the worst performer today and that type of erratic behavior from a former stalwart was a bit disconcerting. But again a positive to take away from todays behavior was that markets shrugged off a weak crude price. Other sectors that lagged today were the discretionary groups and the XLY too recorded a bearish engulfing candle after quite a run. The good news here is that it still trades above a good looking double bottom trigger of 78.95 originally taken out on 7/8. Of the top ten holdings in the ETF the only one to eke out a gain Wednesday was MCD. The casual diner play is higher 10 of the last 11 sessions but notice volume has been nearly absent during that time span. The XLY did run into some trouble today near the 82 handle last November before dropping 8 of 11 weeks ending between 12/4-2/12. There are still best of breed names in the group like PLCE, BURL and LULU, but some former leaders have fallen by the wayside like MIK. MIK was turned back today at the round 30 number and is on track to record its second bearish engulfing candle this week down more than 5% thus far heading into Thursday. The last one was the week ending 6/10 which slumped 11.2%. The stock had been trading between the round 20-30 numbers and perhaps a return trip to 20 over the near term is in store. Other retail names that are still behaving themselves but look possibly on the verge of being wounded are LOW. This name obviously benefits on a strong housing market and below is how we profiled the name in our Friday 7/8 Game Plan. Look to see how it acts on a retest of the 80.86 cup base trigger breakout from 7/8.