ChartSmarter Thursday Game Plan 6/8/17

Markets meandered through another lackluster session Wednesday with the Nasdaq rising .4% and the S&P 500 by .2%. Both benchmarks recorded bullish hammer candles and if they can manage to trade sideways for a few more sessions the landscape looks a bit greener as bull flag formations will take shape. We spoke yesterday of the concern about oils leadership the first 2 days of this week and today the group fell hard with the XLE the worst performer by far dropping 1.4%, with crude off more than 5% today. The ETF is looking at a potential 3 week losing streak and is now down 17 of the last 25 weeks and 17% off most recent 52 week highs. Interestingly the group has been either a home run or a big flop the last 3 years, more likely the latter, as in ’14 and ’15 it was the worst actor among the major S&P sectors falling 8.6 and 21.5% respectively. However in ’16 it happened to be the best performer up by a whopping 28% and in ’17 thus far it is at the bottom once again. Sentiment is perhaps becoming washed out as the energy sector makes up just 5.4% of the SPX market cap, the lowest sine 2001, h/t Jon Boorman/Stephanie Link. But for a technician that is not a catalyst for opening positions in the group and when one sees the destruction of some individual names in the space it is breathtaking. Once a highly regarded name, I am showing my age here, RRC has been chopped by more than half from 52 week highs and a 2:1 split never took place. It is looking at a potential 9 week losing streak depending on Fridays close. Also showing my age I remember when their was a time when retail stocks would benefit from crude’s demise. That is not necessarily the case any longer and a good example of that is the chart below of URBN and how it was examined in our Monday 6/5 Game Plan. The stock is now off by 55% from recent 52 week highs and broke below a bear flag and looking at a possible 5 week losing streak. How are those pizza shops you guys acquired working out?