ChartSmarter Monday Game Plan 1/23/17

Markets ended the week on a lukewarm note with the Nasdaq and S&P 500 higher by .3%. For the week the both lost ground, albeit modestly with the Nasdaq off .3% and the S&P 500 by .1%. Some positives can be taken away as the Nasdaq gave back little of the prior two weeks combined gain of 3.6% and the S&P 500 is now coiling very tautly with the last 3 weeks all CLOSING within just 5 handles of each other. Breakouts above the range can be very powerful. One has to respect the benchmarks ability to remain just off all time highs and the more I look into things I am becoming more bullish. Take for example the action of select semiconductor names thus week. When this group behaves well, a key ingredient to an ongoing rally, it is a good overall sign for the technology sector, and therefore for the markets. This week saw two best of breed names report earnings with ASML on Wednesday sprinting higher by 6.1%. Today we had SWKS gallop 13% upward on easily the best daily volume in over on year and CLOSING above the round 80 number on a weekly basis (it traded above intraweek 10/14, 11/28 and 12/9/16 but failed to finish above). We also are starting to see stocks shrug off downgrades. Today PG rose 3.2% after earning, defying a recent downgrade. More impressive was DIS laughing off a BMO downgrade Wednesday and gaining on the session, and this is AFTER a 20 handle rally in the last 3 months. One sector that continues to languish, and is further evidence that trends are more likely to persist than reverse, is the retail arena. A former best of breed name that did not participate in Fridays rally was PLCE. It slipped below both the very round par number and its 50 day SMA Thursday. Below is how the stock was precisely presented in our Friday 1/20 Game Plan.