ChartSmarter Wednesday Game Plan 7/20/16

Markets took a pause Tuesday with both the Nasdaq and S&P 500 underwater for the entire session. The Nasdaq dropped .4% and the S&P 500 by .1% The small cap Russell 2000 slipped .6% CLOSING right at the round 1200 figure and a bull flag pattern has taken shape. It is a good looking formation, one might say to good, straight from the textbook. And we know what textbooks are good for once printed. The Dow which we rarely discuss is now on a current 8 session winning streak, and perhaps that is a sign investors are reaching for mature, defensive names. Say what you want about the Nasdaq, but it is trading in a very taut fashion the last 7 days with all intraday ranges well less than 1%, in a one up one down pattern the last 6 days. That indicates at least at the moment that market participants are reluctant to sell, even after the strong run the benchmark has undergone. Weakness was diverse with just 2 of the major S&P sector ETFs finishing in positive territory, the financials and industrials which both finished higher by pennies. The dollar has put pressure on commodities and the flag we posted on the UUP last week recorded a breakout today and cleared its 200 day SMA. As you could imagine that put the energy and materials sectors as the laggards Tuesday. The retail space was soft today with the likes of GES which slumped 7% after a PJC downgrade. Former leader ANF was stopped for a second consecutive session at the round 20 number today. MIK another former leader in the arena gave up 3.5% today and a once very tight trading habit for the name has become loose and sloppy the last 6 weeks. CROX which is trying to resurrect itself lost almost 4%. Capital has been flowing into the more conservative stocks. Below is the chart of TGT how it was profiled in our Thursday 6/30 Game Plan. It broke above the round 70 number and achieved its measured move through an ascending triangle and it now has to battle with a still downward sloping 200 day SMA. Should be a nice fight between the bulls and bears the rest of the week there.