Stocks were mixed on Tuesday with the Russell 2000 ETF (IWM) gaining ground, the Dow SPDR (DIA) loosing ground and the S&P 500 ETF (SPY) closing flat. Relative weakness in finance, technology and healthcare weighed on the market. Homebuilders offered a bright spot as the Home Construction iShares (ITB) surged 1.82% on the heels of strong earnings from Lennar (LEN) and KB Home (KBH). Networking stocks weighed on the tech sector, but semis gained as Applied Materials surged 9% on news of a merger announcement. As far as stocks are concerned, I am concerned with the surge in Treasuries and the decline in Treasury yields. The 10-year Treasury Yield ($TNX) broke support and the 20+ Year T-Bond ETF (TLT) broke resistance. A fall in yields suggests less confidence in the economy or perhaps a flight to safety as things heat up in DC. Also note that gold and oil are down sharply over the last five days, even as the Dollar remains weak. Stocks are holding their ground, but could be vulnerable to further weakness should Treasuries continue their run. Note that TLT is up 3.43% over the last ten days.
**************************************************************************
**************************************************************************
**************************************************************************
**************************************************************************
**************************************************************************
Key Reports and Events (all times Eastern):
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.
Learn More
