Stocks extended their gains with the Nasdaq 100 ETF (QQQ) and S&P MidCap 400 SPDR (MDY) leading the way on Tuesday. Large techs, small-caps and mid-caps showed relative strength yesterday, but the overall gains were muted as we head into a FOMC announcement on Wednesday. The economic data will also start rolling in on Wednesday with the ADP Employment Report, the ISM Manufacturing Index and Auto-Truck Sales on deck. Stocks are again priced for good news with the S&P 500 at an all time high and the Nasdaq 100 ($NDX) closing at a 52-week high. The chart below shows the all-important Retail SPDR (XRT) edging above its mid April high to affirm its uptrend. Retail does not show any relative weakness at this point and this supports the bullish case.
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Key Reports and Events (all times Eastern):
Wed - May 01 - 07:00 - MBA Mortgage Index
Wed - May 01 - 08:15 - ADP Employment Report
Wed - May 01 - 10:00 - ISM Manufacturing Index
Wed - May 01 - 10:00 - Construction Spending
Wed - May 01 - 10:30 - Oil Inventories
Wed - May 01 - 14:15 - FOMC Policy Statement
Wed - May 01 - 15:00 - Auto and Truck Sales
Thu - May 02 - 07:30 - Challenger Job Cuts
Thu - May 02 - 08:30 - Jobless Claims
Thu - May 02 - 10:30 - Natural Gas Inventories
Fri - May 03 - 08:30 - Employment Report
Fri - May 03 - 10:00 - Factory Orders
Fri - May 03 - 10:00 - ISM Services Index
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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