ChartSmarter Thursday Game Plan 4/6/17

Markets gave back all of their early on gains and then some after well received private payroll data, exhibiting bearish behavior starting on highs and going out hard on lows for the session after the Fed will be taking away the punch bowl. The Nasdaq which was higher by .6% at its best levels for the day ending up falling .6% and the S&P 500 finished the off by .3%. The Russell 2000 which ignited the powerful recent rally since the election fell for a third straight day declining 1.2% and each of the last 2 days reversed after hitting 50 day SMA resistance. The Nasdaq once again is having trouble CLOSING above the round 5900 number and on its daily chart one can see negative divergence as the RSI is making lower lows since mid February as the price action has went sideways. The tug of war which has shown itself through a bit of volatile trade could be indicative of topping action. It we were to look for clues, of course price action is paramount, one has to look no further than the retail space. It has become a bit more energetic to the upside recently, but Tuesday before todays washout, flashed some concerns with the generals in the space acting fragile. Those would include BURL which is lower by 3.7% this week, and it has not registered a weekly loss that large since the week ending 11/4/16. Below is the chart of the name and how it appeared in our Thursday 3/30 Game Plan, which we were WRONG about. A logical entry now may be back toward the very round 90 number if it gets there. PLCE is another that comes to mind which has slipped 9.4% this week thus far. There has been other news in the group with Payless declaring bankruptcy and we received some downgrades this week by perennial laggards LB and RL which are lower by 51 and 30% respectively from their most recent 52 week highs. Consumer spending makes up 2/3rd’s of GDP and with a skittish spender the 3-4% forecasts may be looking a bit optimistic.