ChartSmarter Wednesday Game Plan 1/11/17

Markets looked like they were ready to potentially roll over mid afternoon, but a late session rally put the benchmarks just off intraday highs. Then they did soften and the intraday charts had the look of a bearish head and shoulders pattern. When all was said and done it was the Nasdaq that led the way of the big three, gaining .4% for a sixth consecutive gain. The S&P 500 was UNCH, registering another indecisive spinning top candle Tuesday, but it was the Russell 2000 that advanced 1% recording a bullish engulfing candle. Not surprisingly therefore it was the financial sector that was one of the leaders with the XLF rising .2%. Looking at the ETF one sees the excellent consolidation of the 5 week winning streak that gained more than 20% the weeks ending between 11/11-12/9. It has traded sideways the last 4 weeks and sits just 2% off recent highs. The pullback many are waiting for in this space may not occur. That is the definition of a bull market, one that does not give you the chance to get in. The flag on the XLF is getting a little long in the tooth, but one has to respect the price action. Healthcare rose .3% as capital continues to rotate into the group. Laggards were the energy group, as we are beginning to sound like a broken record as they are soft seemingly every session now. The XLE is quickly approaching its rising 50 day SMA which held on 11/29 at the precise round 70 number, but the instances last year in June-September and November did not hold, but they were quickly recaptured. The sector has to be given the benefit of the doubt, until it is no longer warranted. The services names seem to be the consensus of the best to play, a concern, however below is the chart of MRC and how it was presented in our Friday 1/6 Game Plan. I am a proponent of the round number theory and today it held that number and recorded a bullish harami at a rising 50 day SMA. Nice cluster of evidence.