Stocks keep chugging higher as the major index ETFs closed with modest gains. The Nasdaq 100 ETF (QQQ) led the way with a .75% gain. Among the sectors, the Finance SPDR (XLF) surged 1% and the HealthCare SPDR (XLV) advanced .74%. Both recorded new highs. The Broker-Dealer iShares (IAI) and Regional Bank SPDR (KRE) both advanced over 1%. Semis led the technology sector as the Semiconductor SPDR (XSD) gained 1.76%. Commodity-related stocks and ETFs were hit with selling pressure again. The Metals & Mining SPDR (XME), Gold Miners ETF (GDX), FirstTrust Natural Gas ETF (FCG) and Oil & Gas E&P SPDR (XOP) all fell over 1%. The PerfChart below shows the performance for 10 industry group ETFs over the past month. Seven of the ten are up. Even though the stock market is not hitting on ALL cylinders, the majority of cylinders are running strong and this is enough to keep the broader market strong.
**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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No change. SPY broke flag resistance with a surge above 200 on Tuesday and tested this breakout with a little Fed volatility on Wednesday. The spike low and broken resistance combine to mark first support at 199.6. A break below this level would negate the flag breakout and put SPY back in corrective mode.
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No change. QQQ broke out in Wednesday afternoon and the broken resistance zone turns first support. A strong breakout will hold and a weak breakout will fold. Broken resistance and the afternoon low combine to mark first support at 98.8. A move below this level would argue for more correction from QQQ. The indicator window shows AAPL consolidating with support at 98.
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No change. IWM got a bounce over the last two days, but remains within a downtrend since early September. The trend line, broken support and a buffer combine to mark key resistance in the 115.5-116 area. A post-Fed breakout here would reverse the downtrend and be bullish for small-caps, and the market overall. The indicator window shows the price relative breaking down as IWM underperforms SPY.
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No change. TLT broke support with a sharp decline this month. Even though the ETF is short-term oversold after a 5+ percent decline, the short-term trend is down and I am marking key resistance in the 116.5 area. Further down, we could see an oversold bounce back to broken support in the 115.5 area. The indicator windows show the 5-year Treasury Yield ($FVX) moving above its July high and the 10-YR Treasury Yield ($TNX) moving above 2.6%.
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The Euro Index ($XEU) remains in a relentless downtrend and the US Dollar ETF (UUP) is in a strong uptrend. UUP consolidated for a week, broke out with a move above 22.5 and then fell back into the consolidation. I will mark first support at 22.3 for now. Key support remains at 21.9, but I will be raising this level in the coming days or weeks. First resistance for the Euro is set at 130 and key resistance remains at 133.
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The USO Oil Fund (USO) broke support and then moved right back above this break with a surge on Tuesday. The recovered support break did not last long as the ETF fell back below 34.7 on Thursday. This bounce was considered an oversold bounce within a downtrend. With the reaction high, I can now mark key resistance at 35.5
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No change. Gold is a classic case of becoming oversold and remaining oversold. With the recent highs around 119-119.5, I will move minor resistance to this area. A breakout here could give way to an oversold bounce. Chartists should also watch the Dollar because gold is clearly tied to the Dollar. Broken support and the early September high mark major resistance in the 122-123 area.
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Key Reports and Events (all times Eastern):
Fri - Sep 19 - 10:00 - Leading Economic Indicators
Chart Setups on 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.
