ChartSmarter Wednesday Game Plan 9/14/16

Markets finished off the lows Tuesday, with the summer doldrums quiet now firmly in the rear window. The Nasdaq continues to try and hold on and today actually did not undercut its bullish piercing line candle from Monday and held its 50 day SMA for a second consecutive session after being below it the last 2 days intraday. The tech rich benchmark fell 1.1% today and the S&P 500 lost 1.5% and is now 40 handles underneath its 50 day SMA or almost 2%. It is imperative for the index to recoup that line in rapid fashion as the longer it swims below it the more bearish it becomes. The Russell 2000 lost 1.9% and was the laggard Tuesday and it was unable to hold onto its 50 day SMA, and weakness in the small cap benchmark is a clear signal of a risk off attitude. When investors are feeling bullish and more aggressive that comes across in a strong Russell. Energy was easily the worst performing sector today with the XLE slumping 2.8%. The best behaved sector was technology with the XLK falling .7%. On big down days I look for names that ignored the soft tape and traded well. One was CSX, and below is the chart I posted a few days ago, but deserves credit for trading green a good chink of the day before closing lower by just 8 pennies. Its chart looks better than peers UNP, KSU and NSC and its firmness is a tell going forward. Looking at many charts one has to give credit to the markets for hanging in as long as they did. Looking at just a couple of former leaders like retail play ULTA now 15% off recent 52 week highs and materials play MLM 14% of its. ULTA suffered a bearish engulfing week ending 8/26 which lost more than 7% and MLM is on a current 6 week losing streak. When the generals speak it pays to listen.