Stocks started the day weak, but caught a lunchtime bid and bounced off their morning lows. There was no follow through to this bounce as the major index ETFs fell back in the final hour and ended the day mixed. Large-caps gained as the Dow SPDR (DIA) and S&P 500 ETF (SPY) closed a fraction higher. Small-caps and techs were weaker as the Nasdaq 100 ETF (QQQ) and Russell 2000 ETF (IWM) finished modestly lower. The sectors were also mixed with modest gains and losses. The technology sector was relatively weak as the FirstTrust Internet ETF (FDN), Networking iShares (IGN) and Semiconductor SPDR (XSD) fell. The finance sector was relatively strong as the Regional Bank SPDR (KRE) and Broker-Dealer iShares (IAI) edged higher. The chart belows shows KRE consolidating after the late August breakdown. The bias is bearish because the breakdown held and broken support turned resistance. A move below 35 would signal a continuation lower and target a move to the 32-32.5 area. Watch 36 for an upside breakout to put the bulls back in play.
**This chart analysis is for educational purposes only, and should not
be construed as a recommendation to buy, sell or sell-short said securities**
**This chart analysis is for educational purposes only, and should not
be construed as a recommendation to buy, sell or sell-short said securities**
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Key Reports and Events (all times Eastern):
No government reports during the shutdown
Thu - Oct 10 - 08:30 - Initial Jobless Claims
Thu - Oct 10 - 10:30 - Natural Gas Inventories
Fri - Oct 11 - 08:30 - Retail Sales
Fri - Oct 11 - 08:30 - Producer Price Index (PPI)
Fri - Oct 11 - 09:55 - Michigan Sentiment
Fri - Oct 11 - 10:00 - Business Inventories
Thu - Oct 17 - 23:59 - Debt Ceiling Deadline
Thu - Oct 24 - 09:00 - Government Runs out of Money (estimate)
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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