**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 was pop and drop for the stock market on Monday. Stocks opened strong on news that Lawrence Summers withdrew his name from contention for the Fed chairmanship. Sellers appeared almost immediately after the open as the major index ETFs worked their way lower the rest of the day. Despite this selling, the S&P 500 ETF (SPY) and Russell 2000 ETF (IWM) closed with small gains. The Nasdaq 100 ETF (QQQ) closed with a small loss because Apple declined over 3%. The industrials, finance and materials sectors led the market with gains exceeding 1%. The Home Construction iShares (ITB) was also strong with a 2.19 advance. There were, however, some pockets of weakness in the technology sector as the Networking iShares (IGN) fell .75% and the FirstTrust Internet ETF (FDN) declined .21%. The short and medium-term trends are up, but the short-term uptrend is getting a little frothy with SPY and IWM up over 4% the last 10 trading days. The Fed starts its two-day meeting today with its policy statement expected on Wednesday afternoon.
be construed as a recommendation to buy, sell or sell-short said securities**
It was pop and drop for the stock market on Monday. Stocks opened strong on news that Lawrence Summers withdrew his name from contention for the Fed chairmanship. Sellers appeared almost immediately after the open as the major index ETFs worked their way lower the rest of the day. Despite this selling, the S&P 500 ETF (SPY) and Russell 2000 ETF (IWM) closed with small gains. The Nasdaq 100 ETF (QQQ) closed with a small loss because Apple declined over 3%. The industrials, finance and materials sectors led the market with gains exceeding 1%. The Home Construction iShares (ITB) was also strong with a 2.19 advance. There were, however, some pockets of weakness in the technology sector as the Networking iShares (IGN) fell .75% and the FirstTrust Internet ETF (FDN) declined .21%. The short and medium-term trends are up, but the short-term uptrend is getting a little frothy with SPY and IWM up over 4% the last 10 trading days. The Fed starts its two-day meeting today with its policy statement expected on Wednesday afternoon.
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Key Reports and Events (all times Eastern):
Tue - Sep 17 - 08:30 – Consumer Price Index (CPI)
Tue - Sep 17 - 10:00 - NAHB Housing Market Index
Tue – Sep 17 – 10:00 – FOMC Meeting Begins
Wed - Sep 18 - 07:00 - MBA Mortgage Index
Wed - Sep 18 - 08:30 - Housing Starts/Building Permits
Wed - Sep 18 - 10:30 - Crude Oil Inventories
Wed - Sep 18 - 14:00 - FOMC Policy Statement
Thu - Sep 19 - 08:30 – Initial Jobless Claims
Thu - Sep 19 - 08:30 - Current Account Balance
Thu - Sep 19 - 10:00 - Existing Home Sales
Thu - Sep 19 - 10:00 - Philadelphia Fed
Thu - Sep 19 - 10:00 - Leading Indicators
Thu - Sep 19 - 10:30 - Natural Gas 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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