ChartSmarter Wednesday Game Plan 12/14/16

Markets scored decent gains once again Tuesday as we near the middle of December where the Santa rallies historically pick up steam. The Nasdaq was higher by .9% and the S&P 500 tacked on .6%, and taking a well deserved breather was the Russell 2000 which finished UNCH. Growth related sectors took control today as it was technology and energy leading the way with the XLK and XLE rising by 1.3 and 1.1% respectively. Consumer discretionary was not far behind with the XLY higher by .9%. Sectors that did not participate today were the industrials, and they have been one of the biggest beneficiaries of the nascent “Trump rally”. Digging deeper into subsectors within the industrials one should pay attention to the transports as they have done the bulk of the carrying, pun intended. The IYT chart is running into a roadblock at the round 170 number as the ETF recorded a bearish hanging man candle last Thursday (keep in mind in bull markets bearish candles can be run over at 52 week and all time highs without a problem), and some pause here would be a welcome sight after a current 6 week winning streak that drove ahead nearly 17%. Case in point with the candlesticks is FDX which also produced a bearish hanging man candle last Thursday. Today it roared past the round 200 number and is looking at a potential 8th consecutive weekly gain depending on this Fridays CLOSE, and more importantly has finished at the top of its weekly range the last 7. It has advanced a gradual 15% during the timeframe, much more palatable than a meteoric jump. Technology does hold the key as health in that group will permeate all the others. One name we like, and a good example of the round number theory is the chart of ST. Below is how the idea was presented in our Tuesday Game Plan this week. It could be on the cusp of a 10 point measured move.