ChartSmarter Thursday Game Plan 1/19/17

Markets traded in a very tight range as it has for sometime now and the Nasdaq and S&P 500 finished at their highs for the daily range with the Nasdaq up .3% and the S&P 500 by .2%. Both of the aforementioned indexes recorded bullish hammer candles which could signal a potential move higher. One has to give respect to the PRICE action above all else and it has hung tough, even with many calling for a 4-5% correction, which is overdue frankly. But the averages could care less what the participants think and they dance to their own tune. The Dow which we do not follow much since it represents a very small faction of names is trading very tight between the round 19800-20000 numbers for 5 weeks now. Since the beginning of that tight range the Dow has moved higher by more than 1200 handles and it is given its rising 50 day SMA a chance to play catch up. The 50 day SMA was roughly 18600 when the coiled move began and it is now near 19430 and advancing each session. Wednesday brought a much more acceptable trio of wining groups than Tuesday with the finnies swimming upstream the most with the XLF rising .9% recording a bullish hammer and harami off its rising 50 day SMA. The ETF even touched the bullish parameters on the RSI of 45 after trading nearly at the round 90 number back in early November. The materials and industrials were the second and third best sectors today with with XLB and XLI higher by .7 and .4% respectively. An industrial that is now trading back to the levels were the group exploded during the Trump win, and former best of breed play that is near a rising 200 day SMA is XYL. Below is the chart and how it was presented in our Tuesday 1/17 Game Plan. Energy was the laggard Wednesday with the XLE losing .2% and now just 1% away from a 50 day SMA test of its own.