Stocks came under selling pressure with the Russell 2000 ETF (IWM) and Nasdaq 100 ETF (QQQ) leading the way lower. The losses, however, were still relatively modest. IWM lost 1.14%, QQQ declined .88% and SPY was down just .41%. Eight of the nine sectors were down with XLU providing the only gain. Biotechs weighed on the healthcare sector. AMZN, PCLN, homebuilders and retailers weighed on XLY. Gold and GDX took another beating. There are concerns because small-caps and large-techs are lagging the broader market, as is the consumer discretionary sector. Also note that Treasuries are outperforming over the last two weeks and TLT is poised for a breakout, which would be negative for stocks. The chart below shows SPY within a trading range this month with resistance near 188 and support in the 183-184 area. The long filled candles in March are looking rather ominous because they show strong selling pressure from open to close. The 20-day EMAs of AD Percent and AD Volume Percent edged lower, and are both close to breaking into negative territory, which would be short-term bearish for breadth.
**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):
Tue - Mar 25 - 09:00 - Case-Shiller 20-city Index
Tue - Mar 25 - 09:00 - FHFA Housing Price Index
Tue - Mar 25 - 10:00 - Consumer Confidence
Tue - Mar 25 - 10:00 - New Home Sales
Wed - Mar 26 - 07:00 - MBA Mortgage Index
Wed - Mar 26 - 08:30 - Durable Orders
Wed - Mar 26 - 10:30 - Crude Inventories
Thu - Mar 27 - 08:30 - Initial Claims
Thu - Mar 27 - 08:30 - GDP
Thu - Mar 27 - 10:00 - Pending Home Sales
Thu - Mar 27 - 10:30 - Natural Gas Inventories
Fri - Mar 28 - 09:55 - Michigan Sentiment
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.
