**This chart analysis is for educational purposes only, and should not
be construed as a recommendation to buy, sell or sell-short said securities**
It is the beginning of the month and stock futures are trading sharply higher this morning. The German DAX Index ($DAX) was up 1.74% on Monday, the Shanghai Composite ($SSEC) was up over 1% on Tuesday and the Nikkei 225 ($NIKK) surged almost 3%. These positive vibes are moving across the pond with the S&P 500 futures up around 1% (5AM ET). The first of the month also has a bullish bias because this is when funds put new money to work (i.e. money collected the prior month). Should stock futures maintain their early gains, SPY would get a bounce off the top of its retracement support zone and QQQ would bounce off support extending back August 15th. A bounce off these support zones would be positive. Also note that RSI is showing signs of improvement and RSI breakouts would provide the first bullish signals. Keep in mind that an RSI signal on the 60-minute chart is very short-term oriented. Trend followers would have to wait for a break above key resistance levels, which are marked by last week's highs. QQQ shows the most relative strength as traders await Apple's product announcements on September 10th. Before this announcement, however, we have a slew of economic reports that could make for choppy trading this week. There are some 13 reports this week with the employment report capping things off on Friday.
be construed as a recommendation to buy, sell or sell-short said securities**
It is the beginning of the month and stock futures are trading sharply higher this morning. The German DAX Index ($DAX) was up 1.74% on Monday, the Shanghai Composite ($SSEC) was up over 1% on Tuesday and the Nikkei 225 ($NIKK) surged almost 3%. These positive vibes are moving across the pond with the S&P 500 futures up around 1% (5AM ET). The first of the month also has a bullish bias because this is when funds put new money to work (i.e. money collected the prior month). Should stock futures maintain their early gains, SPY would get a bounce off the top of its retracement support zone and QQQ would bounce off support extending back August 15th. A bounce off these support zones would be positive. Also note that RSI is showing signs of improvement and RSI breakouts would provide the first bullish signals. Keep in mind that an RSI signal on the 60-minute chart is very short-term oriented. Trend followers would have to wait for a break above key resistance levels, which are marked by last week's highs. QQQ shows the most relative strength as traders await Apple's product announcements on September 10th. Before this announcement, however, we have a slew of economic reports that could make for choppy trading this week. There are some 13 reports this week with the employment report capping things off on Friday.
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Key Reports and Events (all times Eastern):
Tue - Sep 03 - 10:00 - ISM Manufacturing Index
Tue - Sep 03 - 10:00 - Construction Spending
Wed - Sep 04 - 07:00 - MBA Mortgage Index
Wed - Sep 04 - 14:00 - Auto/Truck Sales
Wed - Sep 04 - 14:00 - Fed's Beige Book
Thu - Sep 05 - 07:30 - Challenger Job Cuts
Thu - Sep 05 - 08:15 - ADP Employment Change
Thu - Sep 05 - 08:30 - Initial Claims
Thu - Sep 05 - 10:00 - Factory Orders
Thu - Sep 05 - 10:00 - ISM Services
Thu - Sep 05 - 10:30 - Natural Gas Inventories
Thu - Sep 05 - 11:00 - Crude Inventories
Fri – Sep 06 – 08:30 – Employment Report
Sun – Sep 22 – 10:00 – German Elections
Tue – Oct 15 - 09:00 – Debt Ceiling Deadline
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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