Led by the energy and healthcare sectors, stocks got a bid on Tuesday as the major index ETFs closed modestly higher. Large-caps led the way with the S&P 500 ETF (SPY) advancing .80 percent. All sectors were up, but the four offensive sectors lagged on the day. XLE, XLV, XLU and XLP advanced around 1% to lead the way higher. This means the defensive sectors plus energy led the market. Note that the Utilities SPDR (XLU), Healthcare SPDR (XLV) and Consumer Staples SPDR (XLP) all hit 52-week highs. Relative strength in these defensive names points to a certain risk aversion in the market. Even so, the offensive sectors are clearly not breaking down or showing absolute weakness. Moreover, notice that the Consumer Discretionary SPDR (XLY) is the strongest sector over the last 21 days (one month) and the Finance SPDR (XLF) is the second strongest sector.
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Key Reports and Events (all times Eastern):
Wed - Mar 27 - 07:00 - MBA Mortgage Index
Wed - Mar 27 - 10:00 - Pending Home Sales
Wed - Mar 27 - 10:30 - Oil Inventories
Thu - Mar 28 - 08:30 - Jobless Claims
Thu - Mar 28 - 08:30 - GDP
Thu - Mar 28 - 09:45 - Chicago PMI
Thu - Mar 28 - 10:30 - Natural Gas Inventories
Fri - Mar 29 - 08:30 - Personal Income & Spending
Fri - Mar 29 - 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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