ChartSmarter Friday Game Plan 1/6/17

Markets displayed slightly bifurcated action Thursday with the Nasdaq eking out a gain of .2% and the S&P 500 dropped .1%. Both benchmarks managed to CLOSE well off session lows and heading into Friday the Nasdaq is higher by 1.9% and the S&P 500 by 1.3% and both have now more than recouped all of the previous weeks losses. On the S&P 500 weekly chart there is still work to do to negate last weeks bearish engulfing candle and the week ending 12/16’s doji candle at all time highs. Perhaps the more alarming divergence was the action in the Russell 2000 which slipped 1.15% today. A look on its weekly chart shows a bull flag still at play, but the RSI is making lower lows and this index trades sideways. Remember however that price action is omnipotent and commands more respect always than patterns and secondary indicators. Sector that led Thursday emanated from more defensive groups with healthcare and staples higher by .45 and .3% respectively. It was no coincidence that financials were the worst actor being the largest weighting in the Russell 200 and the XLF withdrew 1%, pun intended. Some concerns that market must contend with, think wall of worry, are the weakening of the retail group with names like KSS which lost almost 1/5th of its value Thursday. Less discussed has been the depressing movement in the semiconductors, perhaps with the exception which is now off a quick 15% since a big bearish engulfing candle at round 120 number on 12/28 from all time highs. Look for names that are fighting the tide and below is the chart of UCTT and how it was presented in our Wednesday Game Plan this week.