Stocks were strong in the first half of the day, but sold off in the second half, especially in the last hour. The Dow came within 15 points of its all time high and then fell over 90 points with the afternoon sell off. The senior average closed near its low for the day. QQQ, MDY and SPY closed at their lows for the day, but IWM managed to close above its morning low. The day-to-day changes in the major index ETFs were minimal with SPY falling just .12% and IWM rising .19%. The sectors were mixed, but the Consumer Discretionary SPDR (XLY) did manage a .49% gain to show relative strength. Even though the Materials SPDR (XLB) was up on the day (+.18%), many of the key industry group ETFs were hit hard, real hard. The Copper Miners ETF (COPX), the Gold Miners ETF (GDX), the Metals and Mining ETF (XME) and the Silver Miners (SIL) were off over 1% on the day.
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Key Reports and Events (all times Eastern):
Fri - Mar 01 - 08:30 - Personal Income & Spending
Fri - Mar 01 - 09:55 - Michigan Sentiment
Fri - Mar 01 - 10:00 - ISM Index
Fri - Mar 01 - 10:00 - Construction Spending
Fri - Mar 01 - 14:00 - Auto Sales/Truck Sales
Fri – Mar 01 - 23:59 – Sequester Takes Effect (unless...)
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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