Stocks took a breather on Tuesday as the major index ETFs edged lower. The declines were small, very small. The sectors were mixed with the Basic Materials SPDR (XLB), Energy SPDR (XLE) and Healthcare SPDR (XLV) bucking the market and scoring small gains. XLV hit a new high as Merck and Bristol Meyers Squib surged. Homebuilders were hit as the Home Construction iShares (ITB) fell around 1.5% on the day. Note that ITB is hitting resistance from the January-February highs. The ETF stalled near 23.50 with three indecisive candlesticks in mid February and then broke support with a sharp decline. The latest rally pushed it all the way back to these highs. The ETF then stalled with four indecisive candlesticks again. I would mark short-term support at 23, which accounts for last week's gap. A move below this level would fill the gap and suggest a failure at resistance. Notice that the price relative peaked in late January and ITB has actually underperformed the S&P 500 for over a month.
**************************************************************************
**************************************************************************
**************************************************************************
**************************************************************************
**************************************************************************
Key Reports and Events (all times Eastern):
Wed - Mar 13 - 07:00 - MBA Mortgage Index
Wed - Mar 13 - 08:30 - Retail Sales
Wed - Mar 13 - 10:00 - Business Inventories
Wed - Mar 13 - 10:30 - Crude Inventories
Thu - Mar 14 - 08:30 – Initial Jobless Claims
Thu - Mar 14 - 08:30 – Producer Price Index (PPI)
Thu - Mar 14 - 10:30 - Natural Gas Inventories
Fri - Mar 15 - 08:30 – Consumer Price Index (CPI)
Fri - Mar 15 - 08:30 - Empire State Manufacturing
Fri - Mar 15 - 09:15 - Industrial Production/Capacity Utilization
Fri - Mar 15 - 09:55 - Michigan Sentiment
Fri - Mar 17 – 12:00 – Erin go Bragh!
Wed – Mar 27 - 23:59 – Government Shut Down Deadline
Wed – May 15 - 23:59 – Debt Ceiling Deadline
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.
Learn More
