Its been quite a rally over the last five days with the S&P 500 getting close to another all time high. Stocks, however, sold off in the final 90 minutes of trading and the major index ETFs closed off their highs for the day. Nevertheless, the major index ETFs finished positive for the day. All sectors were up with the Basic Materials SPDR (XLB) and Consumer Discretionary SPDR (XLY) leading the charge. The charts below show the AD Line and AD Volume Line for the S&P 500 hitting new highs. Both are up the last five days and both broke downswing trend lines with Tuesday's surge. There are no signs of weakness in breadth.
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Key Reports and Events (all times Eastern):
Fri - Apr 26 - 08:30 – GDP (CVX, TYC, WY)
Fri - Apr 26 - 09:55 - Michigan Sentiment
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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