ChartSmarter Monday Game Plan 7/21/14

Markets staged a nice response Friday, do a high powered drubbing the day before. Only caveat was that volume did not accompany the move. The Nasdaq’s 1.6% advance recouped all of Thursday’s 1.4% drop and for the week eked out a .4% gain. A look on the weekly chart shows a nice close in the upper half of the weekly range, and back to back weeks with support at the round 4350 handle. For the year it is higher by 6.1%. The S&P 500 gained 1% on Friday, unable to make up all the 1.2% losses from the day before, but rose .5% for the week and also closed right near in the upper half of its weekly range and is higher by 7% YTD. Every major group joined the expiration party Friday with closes in the green with healthcare leading the way. The XLV, which we discussed taking out a 60.51 double bottom with handle trigger in the Monday 6/23 Game Plan, retested that pivot point both Thursday and Friday. Volume was firm, just what you want to see following test of a former breakout trigger. A sector we will continue to monitor is the energy group. The space which has been strong throughout 2014, seems to be cooling off, and a look at the XLE shows the ETF down 2 of the last 4 weeks. Notice the fund in the last 2 weeks has closed in the lower half of its weekly range, finding resistance near the roundest of the round numbers, par. Fridays .3% advance was not impressive, given Thursdays 1.6% fall in accelerated trade. The lack of movement in the wake of the current geopolitical situation is puzzling as well.