ChartSmarter Wednesday Game Plan 4/26/17

Markets recorded their second very strong gain Tuesday to begin the week demonstrating excellent follow through after 2 months of consolidation. The Nasdaq added .7% and the S&P 500 .6% and once again it was the Russell 2000 the best performer higher by .9%. The Dow which we rarely track although it is the most recognizable jumped 1.1% as many names in the concentrated index have well received earnings reports. The S&P 500 chart now is sniffing out a cup base trigger just above the round 2400 number and its chart has changed its complexion nicely over the last month. The Russell 2000 has broken through its 50 day SMA decisively after failing to do so twice previously in March. Bulls welcomed the laggards Tuesday as the as it was the defensive staples and utilities that lagged with the XLU the only major group to lose value on the session, albeit fractionally. Risk on has come back into vogue with the materials leading the way with the XLB jumping 1.6% and seems to be lifting off from the 52 level which acted as an anchor on the ETF with 8 of the last 11 weeks CLOSING with a 52 handle. Aluminum names contributed greatly to their gain with AA now higher by more than 15% this week so far. Notice it has traded between the round 30 and 40 numbers with 30 acting as support on 2/13 and 40 as resistance on 4/18. Technology was strong, an ongoing development, and once again it was the semis that did much of the heavy lifting. Below is the chart of ADI and how it appeared in our Wednesday 4/19 Game Plan and once again illustrates how candlesticks can be helpful in determining bottoms with good risk/reward scenarios.