ChartSmarter Thursday Game Plan 2/9/17

If you think I am just cutting and pasting the first line in my Game plans the last few days, you can be correct. Of course I am being a bit dramatic but the markets once again put in a yawn session finishing near the unchanged mark. One gets the feeling this could be the quiet before a storm and when trade is coiling tightly like this, the break is usually to the preceding direction which would obviously be higher. The Nasdaq rose .15% Wednesday and the S&P 500 gained fractionally. There has been some slight bifurcation with the averages and on a weekly basis the Nasdaq is higher by .3% thus far and the S&P 500 is lower by .1%. Peeking at the weekly chart does show some bullish traits with the last 5 weeks all CLOSING right at or into the upper half of the weekly range (remember the Nasdaq will be going for a sixth consecutive Friday advance in a couple days). One thing that the bulls may be nervous about is the recent rotation into defensive oriented sectors. Once again it was the utilities and staples battling it out for the top spot today and for the last one week period the staples and utilities have been the best performers with the XLP and XLU higher by 2.3 and 2.2% respectively. Contrast that with the bottom four being materials, energy, cyclicals and financials and one would like to think that trend is temporary. One potential positive was the turnaround in some of the energy names today and below is the chart of HP and how it appeared in our Wednesday Game Plan this week. It recorded a bullish engulfing candle off the 200 day SMA giving longs a clear stop.