ChartSmarter Wednesday Game Plan 3/29/17

Markets demonstrated sweet follow through after Mondays nice reversal and that should be respected. The S&P 500 rose .7%, the Nasdaq by .6% and the Russell 2000 by .7%. Looking at the Nasdaq chart one sees the quick acceleration back into the bullish zone above 50 as it did in the beginning of last December and this January. The S&P 500 did the same as it has now traded between the bullish parameters of 40/45-80/85 RSI figures. The Russell 2000 is now on a 4 session winning streak and lies less than 10 handles below its 50 day SMA, the only benchmark of the aforementioned 3 that is still below that important line. We continue to see impressive earnings reactions and today was no different with DRI and RHT adding more than 9 and 5% respectively. One still hears the chatter that a correction is imminent and that is not the euphoria type of discussion that is normally associated with market tops. Remember we focus solely on price action and if one wanted to point to jubilation one could look no further than todays reading of Consumer Confidence. The 125.6 reading was the strongest since 2000 and perhaps animal spirits are still alive and well. The averages did sigh after the healthcare reform was denied at least for now, and even retail names are responding favorably. Maybe this is just a belief that the border tax is dead on arrival or it may be that consumers are truly feeling sanguine about the future. Of course we can not know definitively and that is precisely why price action should be ones only compass. The traditional sectors one would want to see lag did just that Tuesday with utilities, healthcare and staples underperforming. Financials got their groove back as the XLF was the best actor rising 1.4%. Crude caught a bid today with WTI higher by 1.3% and names in the group responded favorably. Below is the chart of former leader PE and how it was examined in our Thursday 3/16 Game Plan. It has been trading between the round 30 and 40 numbers and it is defending 30 figure strongly.