The Santa Claus rally continued on Monday with the major index ETFs scoring nice gains. The Nasdaq 100 ETF (QQQ) led the way with a 1.33% rise. All sectors were up with the consumer discretionary, technology, finance and utilities sectors leading the way. In fact, five of the nine sectors were up more than 1% and the Finance SPDR (XLF) gained over 2%. Looks like banks are looking forward to another trillion in quantitative easing from the Fed next year. The market is also positioning itself for a fiscal cliff deal, which may get done this week. The chart below shows the Technology SPDR (XLK) springing to life with a bounce off consolidation support. XLK is still lagging the market, but this bounce looks positive and a breakout would be quite bullish.
Elsewhere, Treasuries fell sharply to enable the shift from safe-havens to risk assets. Oil got a modest bounce off support, but remains within a consolidation since late October. The Dollar firmed within its downtrend and gold consolidated after its rising flag breakdown last week.
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Key Reports and Events:
Mon - Dec 17 - 08:30 - Empire State Manufacturing
Tue - Dec 18 - 10:00 - NAHB Housing Market Index
Wed - Dec 19 - 07:00 - MBA Mortgage Index
Wed - Dec 19 - 08:30 - Housing Starts & Building Permits
Wed - Dec 19 - 10:30 - Oil Inventories
Thu - Dec 20 - 08:30 - Jobless Claims
Thu - Dec 20 - 08:30 - GDP
Thu - Dec 20 - 10:00 - Existing Home Sales
Thu - Dec 20 - 10:00 - Philadelphia Fed Report
Thu - Dec 20 - 10:00 - Leading Economic Indicators
Fri - Dec 21 - 08:30 - Personal Income & Spending
Fri - Dec 21 - 08:30 - Durable Good Orders
Fri - Dec 21 - 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.
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Key Reports and Events:
Mon - Dec 17 - 08:30 - Empire State Manufacturing
Tue - Dec 18 - 10:00 - NAHB Housing Market Index
Wed - Dec 19 - 07:00 - MBA Mortgage Index
Wed - Dec 19 - 08:30 - Housing Starts & Building Permits
Wed - Dec 19 - 10:30 - Oil Inventories
Thu - Dec 20 - 08:30 - Jobless Claims
Thu - Dec 20 - 08:30 - GDP
Thu - Dec 20 - 10:00 - Existing Home Sales
Thu - Dec 20 - 10:00 - Philadelphia Fed Report
Thu - Dec 20 - 10:00 - Leading Economic Indicators
Fri - Dec 21 - 08:30 - Personal Income & Spending
Fri - Dec 21 - 08:30 - Durable Good Orders
Fri - Dec 21 - 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.
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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