ChartSmarter Wednesday Game Plan 8/10/16

Markets put in a second consecutive quiet session and as the old adage goes, never short a dull market? The Nasdaq for a second straight day had a daily range trade within a 20 handle. The tech benchmark did outperform, albeit mildly, with a gain of .2%. The S&P 500 was UNCH and it continued much of the same taut action. The last 3 weeks have all CLOSED with just 9 handles of each other and a sideways digestion that we are seeing with it currently will normally resume in the direction with which it came into. The month of August is still early, but the big volatility one has come to expect has not reared its ugly head, yet. The consumer staples were the best acting group today for a change and the energy sector which was very strong as of late was the worst actor with the XLE falling .5%. The ETF recorded a bearish dark cloud cover candle Tuesday, just missing an engulfing candle. Healthcare was the second best performer, but on a bearish note a couple real laggards were front and center in the group. ENDP and VRX down 74 and 89% respectively from 52 week highs jumped 22 and 25% respectively after reporting earnings. One wants to see best of breed names leading a sector, but to give credit where it is due both of these charts look like they are in good looking bottoming processes. Bottoming is best achieved through long, tight periods of time (opposite of topping action which is often very loose and volatile trade) and both ENDP and VRX have done just that. ENDP rose above the round 20 number and looks likely headed to a gap fill from the 5/5 session (VRX has basically filled in its 6/6 gap Tuesday). Below is the chart of VRX which we posted in our Tuesday 7/26 Game Plan which we were WRONG about, although we would not have held into earnings most likely.