**This chart analysis is for educational purposes only, and should not
be construed as a recommendation to buy, sell or sell-short said securities**
Stocks meandered on Monday. Trading was listless and volume was light. Yes, the dog days of summer are upon us. The Russell 2000 ETF (IWM) edged higher, while the Dow Industrials SPDR (DIA) edged lower. The sectors were mixed in uneventful trading. The Utilities SPDR (XLU) led the way lower with a .66% decline and may be vulnerable to rising interest rates (Treasury yields). Note that the Home Construction iShares (ITB) fell over 1% and the Real Estate iShares (IYR) extended its losses. Techs offered a bright spot as the FirstTrust Internet ETF (FDN) surged to a new 52-week high and the Networking iShares (IGN) recorded its third hollow candlestick in a row. A hollow, or white candlestick, forms when the close is above the open. The big trends remain up, but stocks are a bit stretched and we could see some choppy trading as trading thins over the next few weeks.
be construed as a recommendation to buy, sell or sell-short said securities**
Stocks meandered on Monday. Trading was listless and volume was light. Yes, the dog days of summer are upon us. The Russell 2000 ETF (IWM) edged higher, while the Dow Industrials SPDR (DIA) edged lower. The sectors were mixed in uneventful trading. The Utilities SPDR (XLU) led the way lower with a .66% decline and may be vulnerable to rising interest rates (Treasury yields). Note that the Home Construction iShares (ITB) fell over 1% and the Real Estate iShares (IYR) extended its losses. Techs offered a bright spot as the FirstTrust Internet ETF (FDN) surged to a new 52-week high and the Networking iShares (IGN) recorded its third hollow candlestick in a row. A hollow, or white candlestick, forms when the close is above the open. The big trends remain up, but stocks are a bit stretched and we could see some choppy trading as trading thins over the next few weeks.
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Key Reports and Events (all times Eastern):
Mon - Aug 05 - 10:00 - ISM Services
Wed - Aug 07 - 07:00 - MBA Mortgage Index
Wed - Aug 07 - 10:30 - Crude Inventories
Thu - Aug 08 - 08:30 - Initial Claims
Thu - Aug 08 - 10:30 - Natural Gas Inventories
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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