ChartSmarter Monday Game Plan 12/19/16

Markets opened up with very mediocre gains, but did CLOSE upon their lows, with the damage not to magnified. The Nasdaq dropped .4% and the S&P 500 lost .2%. For the Nasdaq it was its second bearish engulfing candle in the last 3 days at all time highs, but if it can churn here and move sideways for a couple more sessions it would take on the look of a bullish flag continuation formation. A break above the round 5500 number would carry a measured move to 5750. The S&P 500 has fallen three of the last 5 sessions and is behaving very similar to the action at the end of November and into early December when the benchmark broke above its own bull flag above 2200. A retest of that breakout about 3% below is certainly not out of the question. For the week both the Nasdaq and S&P 500 fell .1% and the Nasdaq did record a spinning top candle which doubled as a bearish harami. Looking as little further under the hood one would discover the positive action was strictly hailing from the most conservative sectors. It was real estate that rose 1.4% via the XLRE and the XLU added 1%. The XLRE is trying to find its footing above its 50 day SMA and the round 30 figure at the moment. For the week it fell 1.7%, unable to follow through after the previous weeks bullish engulfing candle that jumped 3.8%. For the week it was healthcare that attracted plenty of attention with the XLV gaining 1.1% (weekly volume has increased the last 4 weeks) and advancing after last weeks bullish hammer. The other best performing groups this week were mainly defensive with the top 4 being utilities, healthcare, staples and energy. The bottom four which all dropped more than 1% for the week were financials, cyclicals, materials and industrials. Some consumer discretionary names were just wrecked this week and a few tell some good lessons. RL lost 13.1% this week and it is good example of breakouts that fall apart rapidly often suffer harsh consequences. It broke above a double bottom trigger of 105.07 on 11/10 and it quickly fizzled. Perhaps one could have stayed away just by peering at the weekly chart and seeing just how far it was from its 52 week highs while others were AT 52 week highs. PVH looked to be on its way to breaking above a double bottom trigger of 114.98 on 12/8, when it recorded a bearish dark cloud cover candle, and anyone who did not await price confirmation and tried to get in early was also punished. It is now on a 6 session losing streak and also surrendered 13.6% this week. Another laggard on a 6 day losing streak is BKE, and it slumped 9.3% this week. It now sits 33% off most recent 52 week highs and below is how we profiled the name in our Tuesday 12/13 Game Plan after a brief bull trap above its 200 day SMA turned into a bearish evening star pattern.