Stocks edged lower on Wednesday, but the losses were fairly muted. The Russell 2000 ETF (IWM) fell .41% and the S&P 500 ETF (SPY) declined just .09% on the day. The sectors were mixed with small gains and losses. The Regional Bank SPDR (KRE) showed relative weakness with a 1% decline and the Aerospace & Defense ETF (PPA) felt the debt ceiling heat with a 1.15% decline. KRE made a breakout attempt on Tuesday, but got cold feet on Wednesday with a move back below 36. Overall, the ETF formed a triangle over the last eight weeks. Another move above the upper trend line would be positive and key support is set at 35. Elsewhere, oil and gold surged as the Dollar plunged. I am not sure how related these moves are because oil and gold have been falling for weeks, as has the Dollar. The inverse relationship between gold/oil and the Dollar has not held up since early September.
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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 Data During Shutdown
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.
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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