Stocks got a bounce on Monday with the Russell 2000 ETF (IWM) leading the way. The entire bounce, however, occurred in the first twenty minutes of trading. Even though there was no follow thru to the opening surge, the major index ETFs did hold their gains and finished the day positive. Moreover, the opening gaps held and traders can now use last week's lows to mark first support. The tech, industrials and energy sectors led the bounce. Within tech, the Semiconductor SPDR (XSD) led the way with a 2+ percent surge. The Internet ETF (FDN) and the Networking iShares (IGN) were also strong with 1+ percent moves. The Gold Miners SPDR (GDX) got a bounce as bullion moved higher ahead of the Fed meeting. Yesterday's post-gap price action is likely to continue as the Fed starts its two-day meeting today. Indecision could continue into Wednesday and the fireworks could start on Wednesday afternoon. Housing stocks will also be in focus on Wednesday because we will get three months worth of housing-starts data and one month's worth of building permits.
**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):
Mon - Dec 16 - 08:30 - Empire Manufacturing
Mon - Dec 16 - 09:15 - Industrial Production
Tue - Dec 17 - 08:30 - Consumer Price Index (CPI)
Tue - Dec 17 - 10:00 - NAHB Housing Market Index
Wed - Dec 18 - 07:00 - MBA Mortgage Index
Wed - Dec 18 - 08:30 - Housing Starts-Sep&Oct
Wed - Dec 18 - 08:30 - Housing Starts/Building Permits-Nov
Wed - Dec 18 - 10:30 - Crude Oil Inventories
Wed - Dec 18 - 14:00 - FOMC Policy Statement
Thu - Dec 19 - 08:30 - Initial Jobless Claims
Thu - Dec 19 - 10:00 - Existing Home Sales-Nov
Thu - Dec 19 - 10:00 - Philadelphia Fed
Thu - Dec 19 - 10:00 - Leading Indicators
Thu - Dec 19 - 10:30 - Natural Gas Inventories
Fri - Dec 20 - 08:30 - GDP - Third 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.
