ChartSmarter Tuesday Game Plan 11/1/16

Markets continued their losing ways streak Monday with the very fractional losses, but the moves were tepid and the Russell 2000 perked up a bit advancing by .3%. Looking at the daily charts the Nasdaq which many are assuming to be the leader heading into year end had some heavy volume lower days last Thursday and Friday to end the week falling by a combined 1.1%. The S&P 500 is now sporting a bearish descending triangle pattern where the 2120 level must hold. A break below would have a measured move of 70 handles or about 3.5%, which would put the benchmark right at the UNCH mark for 2016. The S&P 500 lost less then 1% in 2015, and a second consecutive losing year would be rare as it only occurred during a 3 year losing streak between years ending 2000-2 which fell close to a combined 50%. Getting back to the Russell 2000 which is a great leading indicator as small caps tend to turn in a quicker fashion then there bigger cap indexes has advanced 7 straight quarters Q4’s. Looking a little closer the month of November gained 5 of the last 7 Novembers, with none rising more than 4%, albeit the two losing Novembers each fell less than .5%. Looking at December figures, last December was the only decline in the last 8 years as it slumped 5.2% and there were two 7% plus fourth quarters in back to back years of 2009-10. Utilities led Monday as the XLU rose by 2% and now the ETF is approaching the very round 50 number and is quietly looking for a fourth consecutive up week and it is a bit premature but the fund is carving out a 51.33 double bottom trigger (which occurred during an 11 session losing streak). Energy on the other hand was the clear laggard as the XLE slipped 1.1% and has now declined 12 of the last 15 sessions losing its 50 day SMA. One gets the feeling even if the OPEC “deal” falls apart much of that has been priced in. Chips continue to be a sector within tech many are counting on for leadership. Below is the chart of ASML and how it appeared in our Tuesday 10/25 Game Plan.