Stocks moved higher again on Thursday with mid-caps leading the way. The overall gains were modest though and the major index ETFs remain below Tuesday's highs. The Finance SPDR (XLF) led the sectors here with a 1.2% gain on the day. The Technology SPDR (XLK) and Industrials SPDR (XLI) were also strong, but the Consumer Discretionary SPDR (XLY) finished flat on the day. Strength in semis boosted the technology sector as the broad-based Semiconductor SPDR (XSD) surged over 2% and hit a new high. Short-term, we could be a critical point for the broader market because the S&P 500 breadth indicators are split. The S&P 500 AD Line broke support and this support break is largely holding as the indicator stalls below the break. The S&P 500 AD Volume Line held the mid April trend line with a bounce the last three days. A break below this trend line turn this key breadth indicator short-term bearish. The S&P 500 has short-term support at 1640 from Wednesday's low.
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Key Reports and Events (all times Eastern):
Fri - May 31 - 08:30 - Personal Income & Spending
Fri - May 31 - 09:45 - Chicago PMI
Fri - May 31 - 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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