Stocks rebounded at the end of the week with the S&P 500 SPDR (SPY) and Nasdaq 100 ETF (QQQ) posting modest gains (+.84% and +1.19%). The Russell 2000 ETF (IWM) and the Russell MicroCap iShares (IWC), however, posted weekly losses of 1.26% and 1.91%, respectively. Large-caps got a bounce last week, but small-caps finished in the red, which is why breadth indicators were not that strong on Thursday and Friday. S&P 1500 AD Percent ($SUPADP) finished at .58% on Friday, which was below Thursday's level and below +70%. Overall, I remain concerned with the depth of the January decline and the weakness last week's bounce. I am not looking for a major top, but we could see more choppy trading or an extended correction.
**This chart analysis is for educational purposes only, and should not
be construed as a recommendation to buy, sell or sell-short said securities**
Eight of the nine sector SPDRs gained with the Consumer Discretionary SPDR (XLY) surging 2.02%. Strength in the Home Construction iShares (ITB) and Retail SPDR (XRT) lifted XLY. On a closing basis, ITB exceeded its December-January closing highs and shows relative strength. XRT simply got an oversold bounce and shows relative weakness in 2014. There were also pockets of strength in the materials sector as the Copper Miners ETF (COPX) surged over 3% and the Gold Miners ETF (GDX) gained 1.83%. Note that Spot Copper ($COPPER) hit a three week high today as the Shanghai Composite ($SSEC) surged 2% on Monday.
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Key Reports and Events (all times Eastern):
Tue - Feb 11 - 10:00 - JOLTS - Job Openings (Dec)
Tue - Feb 11 - 10:00 - Yellen Testifies
Wed - Feb 12 - 07:00 - MBA Mortgage Index
Wed - Feb 12 - 10:30 - Crude Inventories
Thu - Feb 13 - 08:30 - Initial Claims
Thu - Feb 13 - 08:30 - Retail Sales
Thu - Feb 13 - 10:30 - Natural Gas Inventories
Thu - Feb 13 - 10:30 - Yellen Testifies
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.
