It was another strange day on Wall Street. DIA, QQQ and SPY closed up on the day and hit new highs for 2013. In contrast, IWM and MDY were hit with selling pressure and failed to confirm. Small-caps and mid-caps were relatively weak for the second day running. Also note that Net Advances were negative for both the NYSE and the Nasdaq. Large caps continue to march higher, but the small and mid-caps are not following. Put another way, the generals are charging ahead, but the troops are not backing up the generals. This could turn into a negative for the market overall. Large-caps are getting their strength from the healthcare, consumer staples and utilities sectors. Small-caps were weighed down by the finance sector. Note that the financial services sector is the biggest sector in the Russell 2000 ($RUT) and IWM. Elsewhere, the Semiconductor SPDR (XSD) got hit hard with a 1.6% decline. XSD formed a lower high and broke support with a sharp two day decline. Relative weakness in this key tech sector could bode ill for the technology sector and the Nasdaq. Programming note: I am travelling on Thursday-Friday and will not be able to update Art's Charts. The next update will be on Monday, April 8th.
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Key Reports and Events (all times Eastern):
Wed - Apr 03 - 07:00 - MBA Mortgage Index
Wed - Apr 03 - 08:15 - ADP Employment Change
Wed - Apr 03 - 10:00 - ISM Services
Wed - Apr 03 - 10:30 - Oil Inventories
Thu - Apr 04 - 07:30 - Challenger Job Cuts
Thu - Apr 04 - 08:30 - Jobless Claims
Thu - Apr 04 - 10:30 - Natural Gas Inventories
Fri - Apr 05 - 08:30 - Employment Report
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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