ChartSmarter Monday Game Plan 7/3/17

Markets finished close to the UNCH line Friday after a mild late session sell off with the Nasdaq ending slightly in the red and the S&P 500 up .15%. For the week the Nasdaq finished lower by 2% and down 3 of the last 4 and now sits 3% off most recent 52 week highs (for the entire month of June it rose just 10 times). It concluded the week just under its 50 day SMA. The S&P 500 fell .6% for the week and it is holding its 50 day SMA and I feel both of the aforementioned benchmarks may be readying themselves for tests of the big round numbers. The S&P 500 could feel out the round 2400 number, 1% underneath its current Friday close, and the Nasdaq which has been underperforming could travel to the round 6000 number, where it held when tested on 5/17-18, which sits just more than 2% away from here. It is often foolhardy to try and predict price movements but a bounce at the 6000 number could go on to to possibly record a mild 170 handle bounce which would form the right clavicle in a bearish head and shoulders formation, and a measured move could bring it lower by 350 handles. On a YTD basis the Nasdaq is still firmly in control higher by 14.1% compared with the S&P 500 adding 8.2% thus far in ’17. The recent volatile action is often indicative of topping behavior as with the opposite slow, gradual bottoming process. This past week brought us 10 IPOS which could be considered frothy. Getting back to what really matters, PRICE action, Friday saw a nice earnings reaction from NKE which popped higher by 11%. It was halted near the round 60 number which has recorded just two daily CLOSES above in the last 15 months on 4/21 and 8/24/16. On a weekly basis the was some big bifurcation with the financials and energy leading and utilities and technology bleeding. The XLK has witnessed some big distribution with 3 of the last 4 weeks dropping in heavy trade including the weeks ending 6/9 and 6/30 which fell 2 and 2.8% respectively. Of course the 800lb gorilla in the tech arena AAPL has been swimming below its 50 day SMA for 3 weeks and sits 8% off most recent 52 week highs. The longer it remains below that line the worse off it could be and below is the chart and how it appeared in our Thursday 6/29 Game Plan.