ChartSmarter Tuesday Game Plan 10/25/16

Markets began the week on a positive note and the Nasdaq led the way, just what the bulls would like to see. The tech heavy benchmark rose 1% CLOSING at highs for the session and now clearly above its 50 day SMA. One would like to see it remain north of that line for three to four days and it is now just lower than 1% from clearing a very short term double top created just above 5340 on 9/22 and 10/10. The would be a very bullish signal for the markets as October is getting very long in the tooth now and we are heading into the very strong month of November historically. Of course this year we have an election and data from the Stock Traders Almanac suggests going back 15 elections to the year of 1952 that the week we are currently in is higher just 31% of the time. The best week will be next week, the week before the election, which illustrates that it is higher 75% of the time including a whopping 10.5% jump in ’08. This week is obviously early, but to be stubborn in giving back any of the strength premarket should be viewed with rosy lenses. The S&P 500 recorded a spinning top candle today, which is indecisive, but did record a bullish MACD crossover. The Russell 2000 did reverse near its 50 day SMA and the 1210 figure has to be watched closely going forward as that was a double bottom in September and October. Sectors that were most energetic Monday were led by technology with the XLK up 1% and both consumer groups rounding out the top 3 with discretionary and staples acting well. The XLK is coiling and the last 6 weeks have all CLOSED with a 47 handle. This week is chock full of big tech earnings so there could be some anticipation of a big move either way. GOOGL and AMZN report Thursday after the close. One tech name that should still have some room to run is FFIV and below is exactly how we profiled the name in last Tuesdays Game Plan. It did record a spinning top candle after having problems pushing through the round 120 number today.