ChartSmarter Thursday Game Plan 2/23/17

Markets were once again very quiet Wednesday as the Nasdaq and S&P 500 were little changed and the Russell 2000 was the weak link off by .5%, but the small cap benchmark is holding the round 1400 number and a cup base trigger about 1% below well (it did bounce nicely off the zero line on the MACD too). The Nasdaq did record a bearish harami, but candles have been much better at forecasting bottoms than tops however (for example look at the doji candle on 2/7 and the spinning top on 2/16 which the index shrugged off), and is now nearly 300 handles above its upward sloping 50 day SMA. The S&P 500 is now 4% above its 50 day SMA so a pullback may be prudent here as well, or the indexes may just keep grinding higher, climbing the wall of worry. A common theme is catching on as it was the utilities leading the way, as the XLU cleared the very round 50 number Tuesday and followed through nicely today. The ETF is looking for its first 4 week winning streak this week and if achieved would be its first in 11 months. Energy acted with anything but, as the XLE fell 1.5%, and highlighting that things in motion in a certain direction tend to stay that way. The XLE is looking potentially at a fifth consecutive weekly decline which would be its first since it was ensnarled in a nasty downward spiral declining 13 of 14 weeks ending between 5/8-8/7/15. Talking about sectors in the news the retail group has suddenly found some affection, perhaps because of possible merger talk, think KATE, or just that sentiment had become overwhelmingly negative. The conundrum is whether this is the beginning of something real or is it just a temporary dead cat bounce? Below is the chart of TLRD and how it appeared in our Monday 2/13 Game Plan. Perhaps this turnaround is for real as it put up two very strong earnings reports together recently.