Today is just like a Fed day because Chairman Bernanke begins his two day testimony before Congress. I would not expect any fireworks from his prepared testimony, but we could see markets react if there are any surprises during the question and answer session. Overall, major index ETFs remain in short-term and long-term uptrends, but are short-term overbought after big runs the last three weeks. While stocks can certainly become even more overbought, note that the S&P 500 and the S&P 500 ETF (SPY) are trading near their May highs, which could offer resistance. The Raff Regression Channel marks upswing support at 165 for SPY.
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Key Reports and Events (all times Eastern):
Wed - Jul 17 - 07:00 - MBA Mortgage Index
Wed - Jul 17 - 08:30 - Housing Starts & Building Permits
Wed - Jul 17 - 10:00 – Chairman Bernanke Testifies before Congress
Wed - Jul 17 - 10:30 - Oil Inventories
Wed - Jul 17 - 14:00 - Fed Beige Book
Thu - Jul 18 - 08:30 - Jobless Claims
Thu - Jul 18 - 10:00 – Chairman Bernanke Testifies before Congress
Thu - Jul 18 - 10:00 - Philadelphia Fed
Thu - Jul 18 - 10:00 - Leading Economic Indicators
Thu - Jul 18 - 10:30 - Natural Gas Inventories
Fri - Jul 19 - 10:00 – Happy Friday!
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.
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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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