ChartSmarter Friday Game Plan 10/28/16

Markets lost more ground Thursday as both the S&P 500 and Nasdaq are on 3 session losing streaks and the thing to take away is the Nasdaq undercutting its 50 day SMA so rapidly after briefly recouping it Monday rising 1% on uninspiring volume. Yesterday the Russell 2000 undercut that double bottom at the 1210 level and today followed through surrendering another 1.2%. Not long ago it was up double digits YTD and now is looking at a possible 3 way dead heat heading into year end higher by 4.7% and the Nasdaq and S&P 500 up 4.2 and 4.4% respectively. Perhaps October still has some fireworks in store before all is said and done. Heading into Friday for the week the Nasdaq has declined .9% and the S&P 500 by .4%. Sectors that led to the downside were real estate with the newly created XLRE off 2.4% and has fallen 8 of the last 12 weeks and thus far this one is down by 3.7%. Consumer discretionary was another weak spot with the XLY off by .8% and its brief adventure Monday above its declining 50 day SMA was short lived and it now looks like a break below a 78 neckline in a bearish head and shoulders formation could be likely. Below is the chart of former best of breed name BURL which we were WRONG about in last Fridays Game Plan. It is now down 4 of the last 5 weeks and 16% off recent all time highs and has dropped almost 3% this week so far. When the generals speak one would be wise to pay close attention. Of course there are a myriad of names we can mention whose charts have been decimated that were former standouts. UA is down nearly 40% from its most recent 52 week highs. LULU even with some private equity chatter this week is off 30% from its recent highs and could potentially record a three week tight pattern depending on tomorrows CLOSE.