ChartSmarter Tuesday Game Plan 11/29/16

Markets returned from the holidays Monday underwater the whole session and when all was said and done it was the Nasdaq and S&P 500 losing .6% and .5% respectively. It was the Russell 2000 which has dominated the headlines falling 1.3% as its 15 session winning streak came to an end. The beachball held underwater effect was overcome by gravity Monday recording a bearish engulfing candle in the process. Looking at individual sectors it was very easy to see the winner with the utilities gaining 1.9%. At the other end of the spectrum it made sense given the Russell’s (banks biggest weighting in index) weakness that the financials were the weakest performers today with the XLF falling 1.2%. One of the better looking charts among the finnies is BAC. Below is the chart and exactly how it appeared in our Friday 11/18 Game Plan. It is now retesting a bull flag breakout that aligned with the round 20 number, and if successful it has a measured move higher of nearly 20%. Energy names were hit especially hard even though crude rallied with the OPEC meeting coming this week. Lets keep an open mind with this group as the meeting may not impact as decisively as many potentially think, and its a short term event. The XLE is still the best performing sector YTD up better than 20%, although the recent industrial action has it nipping at its toes with the XLI advancing 18% thus far in ’16. But something changed after the recent election from a market that one should have been selling rallies into one which dips should be bought.