**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 were mostly lower on Monday with the finance sector weighing on the broader market. The Finance SPDR (XLF) fell 1.42% and the Regional Bank SPDR (KRE) declined .78% on the day. There was a defensive tone to trading as the Utilities SPDR (XLU) surged 1.21%, the Telecom iShares (IYZ) advanced .40% and the 20+ Year T-Bond ETF (TLT) gained .73%. These gains were offset by weakness in the FirstTrust Internet ETF (FDN), Networking iShares (IGN) and Home Construction iShares (ITB), all of which fell over 1%. It is a big day for homebuilders because KB Home (KBH) and Lennar (LEN) report before the open. On the charts, the S&P 500 ETF (SPY) is loosing upside momentum because 14-period RSI on the 60-minute chart broke below 40 for the first time since August. RSI for IWM and QQQ remains above 40. Even though the short-term trends are up, the inability to hold Wednesday's gains is negative because buying pressure faded. Nevertheless, we have yet to see a significant increase in selling pressure and short-term support levels have yet to be tested.
be construed as a recommendation to buy, sell or sell-short said securities**
Stocks were mostly lower on Monday with the finance sector weighing on the broader market. The Finance SPDR (XLF) fell 1.42% and the Regional Bank SPDR (KRE) declined .78% on the day. There was a defensive tone to trading as the Utilities SPDR (XLU) surged 1.21%, the Telecom iShares (IYZ) advanced .40% and the 20+ Year T-Bond ETF (TLT) gained .73%. These gains were offset by weakness in the FirstTrust Internet ETF (FDN), Networking iShares (IGN) and Home Construction iShares (ITB), all of which fell over 1%. It is a big day for homebuilders because KB Home (KBH) and Lennar (LEN) report before the open. On the charts, the S&P 500 ETF (SPY) is loosing upside momentum because 14-period RSI on the 60-minute chart broke below 40 for the first time since August. RSI for IWM and QQQ remains above 40. Even though the short-term trends are up, the inability to hold Wednesday's gains is negative because buying pressure faded. Nevertheless, we have yet to see a significant increase in selling pressure and short-term support levels have yet to be tested.
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Key Reports and Events (all times Eastern):
Tue - Sep 24 - 09:00 - Case-Shiller 20-city Index
Tue - Sep 24 - 09:00 - FHFA Housing Price Index
Tue - Sep 24 - 10:00 - Consumer Confidence
Wed - Sep 25 - 07:00 - MBA Mortgage Index
Wed - Sep 25 - 08:30 - Durable Goods Orders
Wed - Sep 25 - 10:00 - New Home Sales
Wed - Sep 25 - 10:30 - Crude Oil Inventories
Thu - Sep 26 - 08:30 - Initial Jobless Claims
Thu - Sep 26 - 08:30 - GDP
Thu - Sep 26 - 10:00 - Pending Home Sales
Thu - Sep 26 - 10:30 - Natural Gas Inventories
Fri - Sep 27 - 08:30 - Personal & Spending
Fri - Sep 27 - 09:55 - Michigan Sentiment
Mon – Sep 30 - 23:59 – 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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