Stocks moved lower with broad-based selling pressure on Thursday. Stocks just don't seem to know what they want. It seems as if the shutdown, continuing resolution and debt ceiling are snowballing into a grand bargain of sorts, which would be positive for the markets, long-term at least. The details of any deal are not that important. Businesses just want to know the rules and have some clarity for long-term business planning. In any case, all sectors were down with consumer discretionary, industrials and utilities leading the way. Weakness in homebuilders and retailers weighed on the consumer discretionary sector. The Home Construction iShares (ITB) is once again testing broken resistance in the 22 area. On the intraday charts, we are seeing a loss of momentum in the Russell 2000 ETF (IWM) and Nasdaq 100 ETF (QQQ) as RSI broke 40 this week. Also note that these two did not hold their breakouts and are testing short-term support.
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**This chart analysis is for educational purposes only, and should not
be construed as a recommendation to buy, sell or sell-short said securities**
Key Reports and Events (all times Eastern):
No government reports during the shutdown
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.
