ChartSmarter Thursday Game Plan 12/22/16

Markets spent the vast majority of Wednesday in the red, with the exception of the first few minutes of the day. Losses were negligible with the Nasdaq and S&P 500 falling by .25%. The very taut action among the benchmarks continue and again depending on your bias you can paint a positive or negative spin on it. Bears might say a bull market has the feeling of never letting you back in, but one could have done just that the last 4 days and bulls can say that the indexes are just having a prudent pause and are stubborn in letting much of the robust gains get away. Sentiment can be taken into account as the Gallup US Economic Confidence Index has never been higher than todays reading. Anyone who uses this type of information to make trading decisions has certainly felt pain at one time or another. PRICE action is all that matters and that is how we are judged and paid. For the week thus far the Nasdaq has advanced by .7% and the S&P 500 has risen .4%. It certainly felt heavier than the actual small declines the averages posted Wednesday as only 3 of the major SS&P sectors rose today. The gains were fractional as well as energy, materials and staples all were higher less than .3%. Lagging groups came from real estate which lost 1.3% on the session, and healthcare dropped by .5%. We continue to like healthcare and one should scour the sector for names that were able to lead, somewhat shrugging off the recent struggle within, as names that demonstrate that type of behavior will often be the first to take off once it finds its footing. Below is an example of one of those scenarios with the chart of EGRX and how it was presented in our Tuesday Game Plan this week. Today it traded above its recommended trigger but was unable to CLOSE above the 77 number. Keep an eye on this name going forward as one can enter again. In addition on the weekly chart one can see 6 of the last 7 weeks came into contact with the round 80 number. A weekly CLOSE above can be added to. Looking further left one can see the big weekly reversals at the very round par figure the weeks ending 8/7-14/15 and again 12/11-25/15. Those round numbers can be pesky, just ask the Dow Jones industrial Average.