ChartSmarter Monday Game Plan 8/7/17

Markets showed modest gains Friday and it was the Dow in the spotlight as it is on a current 9 session winning streak and higher 3 of the last 4 weeks and each of the 3 advancing weeks finished higher better than 1%. Its dominance is in full force as it outperformed the Nasdaq and S&P 500 everyday this week and it recorded its first bullish MACD crossover this week since last November. The S&P 500 chart does not look so bad as another bull flag formation takes shape. The last 3 weeks have coiled very taut with each week CLOSING within just 4 handles, and the old adage goes never short a dull market. A CLOSE above 2480 would register a breakout and notice there has been a tug of war there with 5 of the last 9 sessions trading at or above it intraday with zero finishes above. The weekly S&P 500 chart does show two consecutive doji candles. The Nasdaq has fallen 2 straight weeks, but the combined damage is less than .6%, but it has not recorded a 3 week losing streak since the weeks ending between 6/10-24/16. Perhaps the tech heavy index is just digesting its early bug run lately and on a YTD basis still commands respect as it has risen 18% compared to the Dow and S&P 500 up by 11.7 and 10.6%. Looking at individual sectors on a slightly longer term basis the utilities are acting firm. On a one week and one month basis it is second best among the major S&P sectors higher by 1.4 and 4% and on a 3 month timeframe it is third best advancing 5.4%. It confirms my belief that investors are becoming a bit more cautious and defensive in their investing decisions. Does it mean we head lower overall? I have no clue and only PRICE will let us know. The energy and retail groups were making their presence felt and retail seems to be gathering a bit more momentum. Within any group there obviously will be winners and losers but it pays to see which names are outperforming within a weak group as they could be the first to sprint higher once the sector shines. In the retail space that could be a VFC or a PVH which ignored the softness (one leader that has ran into big problems is ULTA now in bear market mode off 21% from most recent 52 week highs). Another possibility is the chart of FIVE, and below is how it was profiled in our Wednesday Game Plan this week. The round 50 number is coming into play but the charts complexion is looking much better as it now trades back above its 50 day SMA for the first time 8 weeks.