The edging continues as stocks once again edged higher with techs and small-caps leading the way. The Dow Diamonds (DIA) once again lagged with a small loss, which can be blamed on IBM. The sectors were mixed with the Technology SPDR (XLK) falling a fraction and the Materials SPDR (XLB) loosing around 1%. IBM gets the blame for weakness in XLK as well. Note that the Networking iShares (IGN), Semiconductor SPDR (XSD) and the Software iShares (IGV) moved higher on the day. Homebuilders caught a bid as the Home Construction iShares (ITB) gained over 1%. On the chart below, the ETF formed a falling flag of sorts this year and a follow through breakout would signal a continuation of the bigger uptrend.
**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):
Tue - Jan 22 - 07:00 - MBA Mortgage Index
Wed - Jan 23 - 08:30 - Initial Claims
Wed - Jan 23 - 09:00 - FHFA Housing Price Index
Wed - Jan 23 - 10:00 - Existing Home Sales
Wed - Jan 23 - 10:00 - Leading Indicators
Wed - Jan 23 - 10:30 - Natural Gas Inventories
Wed - Jan 23 - 11:00 - Crude Inventories
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.
