ChartSmarter Tuesday Game Plan 9/20/16

Markets began the week Monday with lukewarm gains to begin the session but most of the move was frittered away by the close. The Nasdaq let an early up move of .7% go negative and finished the day lower by .2%. It is having issues pushing strongly through all time highs. The S&P 500 which all last week found buyers at the 2120 level, just above a prior double bottom breakout, must now recapture its 50 day SMA as the chart is starting to take the look of a bear flag pattern. The bulls can point to the fact that trade is still confined within last Mondays bullish piercing line candle, and a move below would be a flag breakdown which would have a measured move lower of roughly 60 handles right to the 200 day SMA. The Russell 2000 demonstrated good relative strength higher by .6%. The utilities and financials were among the winning sectors today with the XLU gaining 1% and the XLF .8%. We know most market participants are waiting for the Fed on Wednesday and perhaps markets will remain somewhat quiet until then. The XLU is now on a 4 session winning streak since the bullish harami cross candle on 9/13 and looks to be rounding a bottom of a potential cup base. First it must grapple with a declining 50 day SMA which is basically right at the round 50 number. A move above would certainly make that formation more believable and the trigger would be 53.12. Healthcare was the softest performing sector Monday as the XLV gave up .4%. Tech was not far behind with a small drop 0f .2% for the XLK and below is the chart of NFLX and how it was presented in our Tuesday Game Plan last week. It illustrates two points first being how stocks generally will meet resistance at very round numbers, with par being what pushed the stock back today. And the other is to wait for CLOSING price confirmation Today it cleared the 100.25 pivot but reversed to once again finish below a declining 200 day SMA. It does not mean however to take it off your watch list as it still can play out.