Stocks moved higher on Thursday with the major index ETFs scoring modest gains, very modest gains.
The S&P 100 ETF (OEF) led the way with a whopping .80% advance. The Finance SPDR (XLF) led the
sectors with a 1.27% gain on renewed confidence in US banks. Semiconductors led the tech sector
with the broad-based Semiconductor SPDR (XSD) advancing over 1% on the day. The biggest moves came
in the intermarket area. The European Central Bank (ECB) sounded an optimistic tone in its policy
statement and this sent the Euro sharply higher. The Dollar plunged and gold surged on the news as
well. UUP failed to hold its breakout and GLD failed to hold its most recent breakdown. The chart
elow shows that the markets have been in risk-on mode since mid November. Gold may have perked up
yesterday, but it is down over the last eight weeks. The Dollar and Treasuries are also down, but
stocks and oil are up.
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Key Reports and Events:
Fri - Jan 11 - 10:30 - TGIF
Charts of Interest: Tuesday and Thursday
This commentary and charts-of-interest are designed to stimulate thinking. This analysis is
not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise).
We all need to think for ourselves when it comes to trading our own accounts. First, it is
the only way to really learn. Second, we are the only ones responsible for our decisions.
Think of these charts as food for further analysis. Before making a trade, it is important
to have a plan. Plan the trade and trade the plan. Among other things, this includes setting
a trigger level, a target area and a stop-loss level. It is also important to plan for three
possible price movements: advance, decline or sideways. Have a plan for all three scenarios
BEFORE making the trade. Consider possible holding times. And finally, look at overall market
conditions and sector/industry performance.
