ChartSmarter Thursday Game Plan 10/13/16

Markets displayed little vigor to try and recoup some of Tuesdays losses as the Nasdaq once again underperformed falling .1%. The S&P 500 rose .1% and the Russell 2000 was flat. All three of those averages are now below their 50 day SMAs and the reluctance for the indexes to take out resistance to the upside has to be concerning. The best performing sectors Tuesday were the most defensive in nature with the utilities, staples and real estate leading the way. Energy lagged as the greenback continues to firm up with the UUP higher 10 of the last 12 sessions. Their was some decent action among discretionary names, perhaps some foreshadowing for retail sales this Friday. But the consumer has been a concern as some former leaders have been under severe pressure. Names like LULU off a rapid 30% from recent 52 week highs beginning with a bearish engulfing week ended 8/26 which was preceded by a weekly hanging man with stern resistance at highs not seen since May-June ’13 (today did record a bullish harami candle and ended a 10 session losing streak). WSM is off 37% from recent 52 week highs and on its weekly chart one can see how the very round 50 figure has held up on a weekly CLOSING basis since the beginning of the year (week ending 1/15) until recently. The weeks ending 9/9, 9/16 and 10/7 were not able to hold and that number which was once support could now be stern resistance. MIK has declined 9 of the last 13 weeks and is 24% off its most recent 52 week highs. PNRA is attempting to put an end to a current 6 week losing streak, but is well off intraweek highs heading into Thursday. Perhaps it is no surprise to see this weakness as we have not seen a 3% print on GDP in the last 8 years and of course consumer spending accounts for 2/3rd’s of the calculation. Below is the chart of DSW and how it was profiled in our Wednesday Game Plan. It could be ripe for another leg down with an undercut of the bear flag.