ChartSmarter Monday Game Plan 11/21/16

Markets edged lower Friday with the Nasdaq and S&P 500 falling by .2%. For the week both registered productive advances with the Nasdaq doubling the S&P 500’s .8% gain rising by 1.6%. Being able to tack on .8% after the S&P 500 jumped 3.8% the week prior has to be interpreted as very bullish. For both the aforementioned benchmarks each of the last two weeks were accompanied by energetic volume. The rotation out of bonds into stocks was glaring, with this week seeing the second largest weekly inflow into equity/ETFs ever (h/t Urban Camel). Could the year end chase be ready to rock and roll? Looking at sectors on a weekly basis it was healthcare that was the biggest laggard with the XLV dropping 1.1%, and many were watching to see if the prior weeks 6% gain ending 11/11 would follow through this week. The ETF still resides just 8% off most recent 52 weeks highs and remember this vehicle still has a lot to prove after the recent 10 of 13 week losing streak ending between 8/12-11/4 (notice the downturn commenced after a weekly doji candle ending 8/5).Interestingly on a YTD basis it is the only major S&P sector sector still underwater with a loss of of 1.8%. On the bright side it was the energy and financial industries that shined. The XLE was the weeks best performer with the XLE higher by 2.4% and the XLF added 2.3% and remember the XLF rose better than 11% the week ending 11/11. The big story however continues to be the small caps (below is the chart of LITE, a small cap recent networking IPO and how it was presented in our Friday 11/18 Game Plan) as the Russell 2000 is now on a current 11 session winning streak and the US Dollar index which jumped above the very round par number which provided ample resistance. It powered through a 100.70 double bottom trigger that began with a 9 month winning streak during the month of July 2014.