ChartSmarter Monday Game Plan 11/14/16

Markets concluded a very strong week Friday with the Dow taking the top prize rising 5.4 and the Nasdaq and S&P 500 both gained 3.8% this week. One could surmise that is typical action of an aging bull, as investors flock to value names at the tail end of a strong run, but then you have the Russell 2000. The small cap benchmark jumped 10.2% and is on a current 6 day winning streak dating back to a bullish inverted hammer candle on 11/4. Friday the Nasdaq behaved the best big three Friday as it went out on session highs advancing .5% and displayed hallmark bullish traits starting out softly and CLOSING strong. There are a few factors that the bulls have in their favor, being firstly that many fund managers are underperforming the major indexes and if caught on the wrong side may look to chase returns into year end. Secondly they have the seasonality wind behind their backs, and lastly if interest rates are indeed going to accelerate going forward, M&A activity may start to accelerate as cheap money may be a thing of the past soon. For the week it is not hard to see just where capital is flowing to with the banks via the XLF screaming higher by 11.2%. Healthcare and industrials rounded out the top three groups both gaining for more than 8%. On the flip side, money is leaving the defensive bond proxy industries with the utilities and staples falling 3.9 and 2.9% respectively. Money has been trickling out of technology and the XLK rose just .1.2% this week and one has to wonder if this market can keep its stamina up without the group participating. Below is the chart of NTGR and how it was presented in Fridays Game Plan this week. It may offer good risk/reward in this area as it trades between the round 50 and 60 figures. Earlier this year it put together a very impressive 20 of 24 week winning streak ending between 4/22-9/30 gaining more than 50% in that time frame. This week it recorded a bullish engulfing week right at the round 50 number.