ChartSmarter Thursday Game Plan 11/10/16

Perhaps markets on Monday and Tuesday were correct, like they always are, in predicting the election outcome, just for the wrong candidate. Many pundits, and I should use that word very lightly, were calling for an immediate 5-10% correction if Trump was put into office, and it is just another shining example of the markets trying to confound the most. In the last 3 sessions alone now the S&P 500 has now recaptured all the losses of the 9 session losing streak which came in lightest combined loss since 1980 of just 3.07%. In fact since 1980, there have been 80 single days that have seen a single session decline greater than 3.07%, hat tip Jonathan Krinsky MKM. Wednesday the Nasdaq and S&P 500 rose by 1.1%, and the small cap Russell 2000 which is an excellent barometer on the perceived strength of the domestic economy sprinted higher by a potent 3.1%. Many will pause and wait for a pullback, which in bull mode, by definition rarely lets you back in. There was a big bifurcation of industry strength today with defensive sectors with the interest rate sensitive financials up 4.1% and healthcare which witnessed a powerful squeeze jumped 3.5%. At the opposite spectrum were the utilities, real estate and staples getting slapped to the tune of 3.6, 2.3 and 1.3% respectively. The industrials, which often foreshadow future economic activity were no slouches with the XLI advancing by 2.5%. Sub sectors of the transport vitality have been the truckers and below is the chart of PCAR and how it was presented in our Tuesday Game Plan. Wednesday it tore above its 50 day SMA and is now headed for a test of the round 60 number which on the daily chart aligns with a double bottom base and on the weekly chart can be interpreted as a bullish ascending triangle encountering a hindrance there dating back to late April. Concerning in the overall group was the earnings response of peer KSU which sank 10.9% and now with just 3 sessions this week has the largest weekly volume already dating back to the week ending 5/24/13.