ChartSmarter Tuesday Game Plan 1/31/17

Markets never saw the light of day to begin the week Monday as the benchmarks finished lower, but slightly off session highs. It had been 75 days since the S&P 500 recorded an up or down day by 1%, and it is going to have to wait one more, and the selling felt strong as volume intensified. Throughout the day the weakness was blamed on the political ramifications of the weekend immigration news, but that is just noise. My belief is that the Dow has to prove itself above this very round 20000 number or the shorts have a key spot to put shorts on against. The Russell 2000 slumped 1.3% and is desperately trying to cling on to its 50 day SMA. The Nasdaq filled in a rare gap from the 1/25 session and the S&P 500 has been unable to CLOSE above the round 2300 number, as the prior 3 days before today either touched it intraday or came within less than one handle. As one would think no sectors were immune to the carnage Monday and all of the major S&P sectors declined. The “best” performers however which were near the UNCH mark were utilities and staples. Weighing down on the averages was energy with the XLE lower by 2% and doubling its closest laggard. The individual names had been showing signs of softness for a couple weeks as individual names would start of powerfully and CLOSE limply. Earnings will be coming in fast and furious this week with AAPL tomorrow after the close and FB on Wednesday. A number of semiconductor names will be releasing numbers and this group has been firm. We will see if they deserve to be at such lofty altitudes with QRVO, IDTI, AMD, CRUS, NXPI and CY all reporting. We will hear from retail stocks too, which have been under severe pressure as of late, with UA, COH, EL, RL and HBI releasing numbers and of course the killer within the sector AMZN after the close on Thursday. If one wants to be contrarian and play a retail name make sure it is a best of breed play. Below is the chart of JWN and how it appeared in our Wednesday 1/25 Game Plan which is below the recommended entry price but has not be stopped out as of yet.