ChartSmarter Wednesday Game Plan 9/28/16

Markets forged higher Tuesday with the Nasdaq leading the way with a gain of .9% compared with the S&P 500’s .6% advance. Curious was the lack of participation among the small caps with the Russell 2000 adding a lukewarm .4%. Benchmarks are doing the best to confound the most as they always do with the perceived correlation between oil and the indexes. Yesterday crude rallied and the markets fell, and vice versa on Tuesday. Today the bond and stock market went higher as the TLT tacked on .7%. The Treasury ETF did recapture its 50 day SMA recording a bullish hammer candle in the process and it has had a decent run since filling in a gap on 9/15 from the 6/23 session. Technology was the clear leader Tuesday with the XLK jumping 1.1% and rounding out the top five were the cyclicals, financials, healthcare and industrials all advancing at least .7%. The only two major S&P sector groups to decline were energy and the utilities. Todays move in the XLK is now testing the bearish evening star pattern which was completed last Friday and bulls would have liked to witness better volume accompany Tuesday move. Many of the big cap tech names that dominate the ETF have been basing and some look better than others. AMZN is higher 22 of the last 33 weeks, GOOGL is trading right at the double bottom trigger of 810.99 it took out last Thursday. Investors do not want to see breakouts fall apart, so this name will play a pivotal role in the Nasdaq holding up in the next couple weeks. One name many are NOT talking about and I think will be influential as well is MSFT. MSFT, for one has not retreated like others in the TWTR takeover suitors like CRM and DIS have (to be fair they have been laggards beforehand). Below is how we think the chart could potentially play out.