Stocks started the day weak, but then caught a bid and the broad market indices moved higher the rest of the day. The final gains were not that big with the S&P 500 ETF (SPY) advancing .39% and the Dow Industrials SPDR (DIA) closing .42% higher. The sectors were mostly higher with only the Consumer Discretionary SPDR (XLY) losing ground. The Energy SPDR (XLE) rode oil higher with a 1.62% gain and the Healthcare SPDR (XLV) surged 1% on the heels of positive earnings reports. The beaten down industry groups within the materials sectors bounced as the Gold Miners ETF (GDX) surged 1.86% and the Silver Miners ETF (SIL) bounced 2.2%. These look like oversold bounces for now. There were some pockets of weakness within the technology sector. The FirstTrust Internet ETF (FDN) and Semiconductor SPDR (XSD) fell over 1%, while the Networking iShares (IGN) plunged 2%. The chart below shows the Coal Vectors ETF (KOL) bouncing to forge a low and tracing out a falling flag. Follow through, however, is needed to turn this oversold bounce into something more meaningful.
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Key Reports and Events:
Wed - Jan 30 - 07:00 - MBA Mortgage Index
Wed - Jan 30 - 08:15 - ADP Employment Report
Wed - Jan 30 - 08:30 - GDP
Wed - Jan 30 - 10:30 - Oil Inventories
Wed - Jan 30 - 14:15 - FOMC Policy Statement
Thu - Jan 31 - 07:30 - Challenger Job Cuts
Thu - Jan 31 - 08:30 - Jobless Claims
Thu - Jan 31 - 08:30 - Personal Income & Spending
Thu - Jan 31 - 09:45 - Chicago PMI
Thu - Jan 31 - 10:30 - Natural Gas Inventories
Fri - Feb 01 - 08:30 – Employment Report
Fri - Feb 01 - 09:55 - Michigan Sentiment
Fri - Feb 01 - 10:00 - ISM Index
Fri - Feb 01 - 10:00 - Construction Spending
Fri - Feb 01 - 14:00 - Auto/Sales
Fri – Mar 01 - 23:59 – Sequester Takes Effect
Wed – Mar 27 - 23:59 – Government Shut Down Deadline
Wed – May 15 - 23:59 – New Debt Ceiling Deadline
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.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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