ChartSmarter Tuesday Game Plan 6/6/17

Markets began the week trading in a very tight range and finished close to the UNCH line. The Nasdaq and S&P 500 ended up lower by just .1% and the small cap Russell 2000 fell by .6%. Looking at the Dow which we rarely do, but there is much media attention focused on it, the benchmark is just above a cup base trigger of 21170 in a base that began on 3/1. It looks somewhat similar to what the S&P 500 did as it climbed above its own cup base trigger that aligned with the round 2400 figure. Peering under the hood at individual sectors there was some weakness although it was subdued with the industrials, cyclicals, utilities, materials and healthcare falling by .3-.4%. There was questionable leadership Monday as the energy space led with the XLE rising by .2%. I am thoroughly a technician but there does seem to be some underlying trends in a few commodities that some should be aware of. We are all aware of oils descent as the XLE is nearing bear market territory threshold off 17% from most recent 52 week highs and perhaps some long term courses are undergoing. There is mention in the WSJ weekend edition how Icahn is betting on many not buying their own vehicles in the future and instead will start traveling mostly via car services like Uber or Lyft. And on the not to distant horizon electric cars will only be gaining market share going forward and automobiles are becoming more fuel efficient by the day. Then you hear how the Saudis must keep oil in the $60-70 range for its Aramco IPO to be successful. Perhaps the long term writing on the wall is here. Another product that seemed to be on potentially nascent decline is sugar, and that makes sense as many are becoming aware of its dangers. Since its peak last October near 24 it has lost 10 handles, a very significant number. Some things to watch going forward will be the semiconductors as they have contributed greatly to the tech rally and below is a name that is an excellent illustration of why no matter how good a chart looks stops must be in place. Here is how the ADI chart was profiled in our Monday 5/22 Game Plan. After running into trouble at the very round 90 figure on 5/31 it has quickly slumped more than 10% and today undercut its 50 day SMA in active trade.