ChartSmarter Tuesday Game Plan 12/20/16

Markets finished well off highs Monday to begin a new week and it was the Nasdaq which slipped off intraday highs the most. In mid morning the index was higher by .8% but finished up advancing .4%. It ended the session with its third shooting star candle in the last 5 days. That type of action CLOSING near lows for the day after lukewarm to decent gains are hallmark bearish behavior. It could speak to exhaustion especially when it occurs near all time highs. The S&P 500 ended the day with a shooting star candle of its own which speaks to indecision of the prior move, which obviously has been a nice uptrend. The two standout sectors today were from the real estate and technology groups with the XLRE and XLK higher by .9 and .7% respectively. Looking at a bevy of charts over the weekend it was painful to look at some of the carnage in the consumer discretionary space. One has to wonder if that speaks to a weak shopper or perhaps a more positive view of crude rally continuing, or could it be both. Of course the consumer makes up 2/3rds of GDP and I found it a little wary that the last report of the current administration had a 3 handle for the first time in 8 years. Would like to see the revision to that figure in the near future. Energy was the worst performing group Monday with the XLE lower by .5%. One other concern the market has as it continues to climb the proverbial wall of worry is the rotations from one sector to another. Looking at the FANG group one has to be anxious as money seems to be flowing from these once leading tech names. Sure the transports and banks sucked some of that bleeding up, and some money has went into small caps. In the month of December, Europe has proved to be a leader as thus far with it doubling the gains of the Nasdaq thus far. And then one has to factor in the potential that healthcare is starting to percolate. Below is the chart of FPRX and how it was presented in this Mondays Game Plan and shows the importance of the round number theory.