Stocks opened weak after a decline in retail sales, but soon caught a bid and closed strong. Buying pressure in the face of negative news is positive for the stock market. Also note that stocks advanced even as the 20+ YR T-Bond ETF (TLT) moved higher. These two have been negatively correlated in 2014, but both rose on Thursday. Small-caps got into the action on Thursday as the Russell 2000 ETF (IWM) led the market with a 1.27% gain. All nine sectors were up with the Utilities SPDR (XLU) leading the way (+1.09%). The Technology SPDR (XLK) came in second place with a .73% gain. Even though the defensive sectors are performing well this year, the high octane technology sector is also performing well and this is positive for the market overall.
**This chart analysis is for educational purposes only, and should not
be construed as a recommendation to buy, sell or sell-short said securities**
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Key Reports and Events (all times Eastern):
Fri - Feb 14 - 09:15 - Industrial Production
Fri - Feb 14 - 09:55 - Michigan Sentiment
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.
