ChartSmarter Tuesday Game Plan 11/8/16

Markets exploded higher Monday to conclude a 9 session losing streak, one which was not seen since 1980. Streaks last Friday were bifurcated with oil losing 6 sessions in a row, but copper enjoying a 10 day winning streak (the King Of Beers today broke a 12 session losing streak Monday). The Nasdaq screamed higher by 2.4% compared with the S&P 500’s 2.2%, but both were outdone by a recently wounded 2.5% jump in the Russell 2000. Perhaps there was the beach ball under water let go effect today but of course the elephant in the room is the election Tuesday. One would be foolhardy to predict which way the markets will react, and would be sensible to remain light and one can make their watch lists and set their alerts accordingly for Wednesdays session. The S&P 500 chart can be interpreted as a bullish morning star pattern that found support right at a still upward rising 200 day SMA (the middle candle was also a bullish inverted hammer last Friday). The same can be said for the Nasdaq chart and most seem to believe a big 5-10% correction is inevitable in the very near term, and lets remember the markets rarely give what everyone expects. Obviously all of the major 11 S&P sectors gained ground and the “worst” were the materials which rose by 1.5%, and the best actor was the healthcare with the XLV up 2.6%. Perhaps there is some early buying ahead of the anticipated presidential election results. The financials were firm Monday as well the the XLF now making yet another run at the round 20 number. The ETF is now just below a cup base trigger of 20.11 and it has not recorded a weekly CLOSE above the very round number since the week ending 12/4/15. Below is the chart of one of our favorite financial names HSBC and how it appeared in our Friday 10/21 Game Plan. The flag has now turned into a flat base and a move above 39 could produce some energetic moves. One note of caution is the doji candle it put on today, and we are big proponents of the candlesticks, but pure price action plays a greater role always.