**This chart analysis is for educational purposes only, and should not
be construed as a recommendation to buy, sell or sell-short said securities**
There is a lot of uncertainty in the market place right now and this means every little news bite could trigger a price swing. There will eventually be a deal on the shut down and the debt ceiling, we just don't know when. Stocks will probably bounce should the shutdown end, but I am not sure if these gains would hold because the debt ceiling is right around the corner. The political gridlock is overshadowing a heavy week on the economic front. Chicago PMI surged to 55.7 and beat expectations, which was for 53. Anything above 50 is bullish for the economy and a reading above 55 favors expansion. Construction Spending and ISM Manufacturing are scheduled for Tuesday. On the chart, the Russell 2000 ETF (IWM) and Nasdaq 100 ETF (QQQ) held support, but the S&P 500 ETF (SPY) broke support with a gap. Two of the three are in bull mode so the short-term uptrend still rules. I will be watching treasuries quite closely because they represent the flight-so-safety trade. Strength in the 20+ Year T-Bond ETF (TLT) would signal fear and this would be negative for stocks.
be construed as a recommendation to buy, sell or sell-short said securities**
There is a lot of uncertainty in the market place right now and this means every little news bite could trigger a price swing. There will eventually be a deal on the shut down and the debt ceiling, we just don't know when. Stocks will probably bounce should the shutdown end, but I am not sure if these gains would hold because the debt ceiling is right around the corner. The political gridlock is overshadowing a heavy week on the economic front. Chicago PMI surged to 55.7 and beat expectations, which was for 53. Anything above 50 is bullish for the economy and a reading above 55 favors expansion. Construction Spending and ISM Manufacturing are scheduled for Tuesday. On the chart, the Russell 2000 ETF (IWM) and Nasdaq 100 ETF (QQQ) held support, but the S&P 500 ETF (SPY) broke support with a gap. Two of the three are in bull mode so the short-term uptrend still rules. I will be watching treasuries quite closely because they represent the flight-so-safety trade. Strength in the 20+ Year T-Bond ETF (TLT) would signal fear and this would be negative for stocks.
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Key Reports and Events (all times Eastern):
Tue - Oct 01 - 10:00 - ISM Manufacturing Index
Tue - Oct 01 - 10:00 - Construction Spending
Tue - Oct 01 - 14:00 - Auto Sales
Wed - Oct 02 - 07:00 - MBA Mortgage Index
Wed - Oct 02 - 08:15 - ADP Employment Change
Wed - Oct 02 - 10:30 – Crude Oil Inventories
Thu - Oct 03 - 07:30 - Challenger Job Cuts
Thu - Oct 03 - 08:30 - Initial Jobless Claims
Thu - Oct 03 - 10:00 - Factory Orders
Thu - Oct 03 - 10:00 - ISM Services Index
Thu - Oct 03 - 10:30 - Natural Gas Inventories
Fri - Oct 04 - 08:30 – Employment Report
Tue - Oct 08 - 08:30 – Alcoa (AA) kicks off earnings season
Thu - Oct 17 - 23:59 - Debt Ceiling Deadline
Thu - Oct 24 - 09:00 - Government Runs out of Money (estimate)
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.
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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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