The rally rabbit continued its run as the S&P 500 ETF (SPY) hit a new high. All major index ETFs were up, but the gains were modest and I am starting to see a little relative weakness in the Russell 2000 ETF (IWM) and S&P Midcap SPDR (MDY). While this is not a long-term concern, it could have short-term consequences because stocks are quite extended. All sectors were higher with energy, consumer staples and healthcare leading the way. Again, these are not the groups we want to see leading the market. Healthcare and consumer staples are defensive sectors that typically perform well when the market is risk averse. On the flip side, the Home Construction iShares (ITB) extended its run with a 1.38% gain and the Retail SPDR (XRT) hit a new closing high as retail sales hit market expectations. Treasury bonds will be in focus today as the FOMC makes its policy statement this afternoon. The 20+ Year T-Bond ETF (TLT) broke out in mid October and this breakout is holding. Lower interest rates and QE are keeping the bid in bonds and bond proxies.
**This chart analysis is for educational purposes only, and should not
be construed as a recommendation to buy, sell or sell-short said securities**
**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):
Wed - Oct 30 - 07:00 - MBA Mortgage Index
Wed - Oct 30 - 08:15 - ADP Employment Report
Wed - Oct 30 - 08:30 - Consumer Price Index (CPI)
Wed - Oct 30 - 10:30 - Crude Oil Inventories
Wed - Oct 30 - 14:15 - FOMC Policy Statement
Thu - Oct 31 - 07:30 - Challenger Job Report
Thu - Oct 31 - 08:30 - Initial Jobless Claims
Thu - Oct 31 - 09:45 - Chicago PMI
Thu - Oct 31 - 10:30 - Natural Gas Inventories
Fri - Nov 01 - 10:00 - ISM Manufacturing Index
Fri - Nov 01 - 14:00 - Auto Sales/Truck Sales
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.
Learn More
