Stocks edged lower on Monday with the Russell 2000 ETF (IWM) leading the way (-.70%). Losses were relatively small as selling pressure was contained. Seven of nine sectors were down with the Energy SPDR (XLE) leading the way lower (-.94%). The Basic Materials SPDR (XLB) and the Utilities SPDR (XLU) bucked the market with modest gains. Strength in XLB can be attributed to chemical stocks as DOW, PX, MON and APD moved higher. Note that the coal, copper, gold, steel and other mining stocks were mostly lower. It looks like stocks are treading water ahead of the FOMC policy statement. The Fed begins its two-day meeting today. Also note that traders should prepare for a little volatility because it is a big economic week. The fireworks start with Chicago PMI and the FOMC policy statement on Wednesday. We then get the ISM Index, Jobless Claims and Auto-Truck sales on Thursday. The week ends with the Employment Report and Factory Orders on Friday.
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Key Reports and Events (all times Eastern):
Tue - Jul 30 - 09:00 - Case-Shiller Home Price Index
Tue - Jul 30 - 10:00 - Consumer Confidence
Wed - Jul 31 - 07:00 - MBA Mortgage Index
Wed - Jul 31 - 08:15 - ADP Employment Report
Wed - Jul 31 - 08:30 - GDP
Wed - Jul 31 - 09:45 - Chicago PMI
Wed - Jul 31 - 10:30 - Oil Inventories
Wed - Jul 31 - 14:00 - FOMC Rate Decision
Thu - Aug 01 - 07:30 - Challenger Job Cuts
Thu - Aug 01 - 08:30 - Jobless Claims
Thu - Aug 01 - 10:00 - ISM Index
Thu - Aug 01 - 10:00 - Construction Spending
Thu - Aug 01 - 10:30 - Natural Gas Inventories
Thu - Aug 01 - 14:00 - Auto Sales/Truck Sales
Fri - Aug 02 - 08:30 - Employment Report
Fri - Aug 02 - 08:30 - Personal Income & Spending
Fri - Aug 02 - 10:00 - Factory Orders
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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