Stocks extended their uptrends with modest gains. All of the major index ETFs moved higher with the S&P MidCap 400 SPDR (MDY) and S&P 500 ETF (SPY) leading the way. Both were up just less than 1%. Eight of the nine sectors were up with only the Energy SPDR (XLE) moving lower. The Finance SPDR (XLF), Utilities SPDR (XLU) and Consumer Staples SPDR (XLP) led the way higher with gains near 1%. A strong Dollar weighed on precious metals as gold and silver plunged. Gold's appeal is further diminished when stocks are strong and bonds are weak. The chart below shows the Oil & Gas Equipment/Services SPDR (XES) surging to resistance in the 40-41 area and stalling the last five days. A break above consolidation resistance would signal a continuation higher, but a break below 39.75 would argue for a downswing.
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Key Reports and Events (all times Eastern):
Thu - May 16 - 08:30 - Jobless Claims
Thu - May 16 - 08:30 - Consumer Price Index (CPI)
Thu - May 16 - 08:30 - Housing Starts/Building Permits
Thu - May 16 - 10:00 - Philadelphia Fed
Thu - May 16 - 10:30 - Natural Gas Inventories
Fri - May 17 - 09:55 - Michigan Sentiment
Fri - May 17 - 10:00 - Leading Indicators
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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