ChartSmarter Friday Game Plan 6/30/17

Markets are having to deal with volatility once again, and it has been sometime since it has and it acted like it is not sure what to do. The Nasdaq has been touched the most this week with 3 consecutive sessions moving more than 1%. Tuesday recorded a down move of 1.6, Wednesday was higher by 1.4 and Thursday dropped 1.4% cutting into a deep 2.3% downdraft mid day. The tech heavy index did manage to CLOSE right at its 50 day SMA, undercutting it early on and this line has been a bedrock of support, with one able to count on ones hands how many times it finished below that line since last December with the 12/1-2 days and agin in mid April before quickly accelerating its rapid ascent. Notice though that those last 2 instances looked very orderly and volume was tame, and this time appears to be different. The S&P 500 bounced almost precisely off that line Thursday and heading into Friday the Nasdaq is lower by 1.9% and the S&P 500 by just .7% and looking for a potential very taut fifth straight weekly CLOSE with a 2430 handle. Market participants do seem to be very complacent expecting this quick snapbacks and the chatter talking about the length in time without a 5% pullback is becoming louder. What if when that occurs it is more than 5%? Could be a very good possibility. Looking at individual groups the only bright spots on this tough tape were the financials and energy. Technology was the big loser today with the XLK losing 1.8% and for the week with one day left is lower by 2.6%, and it is 5% off its most recent 52 week highs. I have been discussing the concerning action among one of techs most influential groups the semiconductors. Below is the chart of LRCX and how it was profiled in our Wednesday Game Plan this week. Obviously some of these names will vastly outperform on both the up and downside and it is now off by 15% from most recent 52 all time highs. Notice it did produce a mild bounce off the exact 140 number today. Those round numbers are something aren’t they?