ChartSmarter Thursday Game Plan 6/15/17

Markets underwent a slight flight to safety today as not only did the staples and utilities lead, but the 10 year Treasury yield slipped back below its 200 day SMA not long after recapturing it just last week. The Nasdaq slipped .4%, more than half of last hours lows which had it down 1%, and the Russell 2000 by .6% and the S&P 500 was not hurt as bad as the prior two off by .1%. The techs weakness as we have mentioned is a cause for concern as the Nasdaq did record its second bearish engulfing candle in the last 4 sessions Wednesday. The benchmark has been able to absorb the body blows of the 3/21, 5/17 and 6/9 days, with all falling at least 1.8%, but one has to at least wonder if the legs are getting weary. The S&P 500 still looks good above the round 2400 number and the Dow has been holding up well, as it was the only major average to advance today, which is another worry as the last leg of a bull market normally sees investors the least likely to part with their more mature, defensive names. That being said there still seems to be very little euphoria here, and with many turning bearish with the likes of Jeff Gundlach today, ones only guide should be the price action of your individual holdings. Looking at the lagging groups today it was led by energy, material and technology. The XLB which was quietly behaving very bullishly today registered a bearish dark cloud cover candle at all time highs. Please keep in mind candles are secondary to price action and can be used to strengthen a bullish or bearish viewpoint. If one feels the need to take a conservative posture going forward, the chart below from our Monday 5/12 Game Plan of a former best of breed utility play may fit the bill. Unsurprisingly it ran into some trouble at the round 70 number today, but it posted its third consecutive CLOSE above its 200 day SMA. It has lagged, now 9% off recent 52 week highs where peers NEE and SRE are 1 and 3% off theirs, but SCG could offer some good risk/reward here as it builds the right side of its cup base.