Stocks were mixed on Wednesday as investors digested the strong ADP report and the prospects of further tapering down the road. Actually, strong job numbers and tapering are nothing new. These realities were simply reinforced with the ADP report and the FOMC minutes, which showed that most policy makers favor further tapering. Techs caught a small bid as the Nasdaq 100 ETF (QQQ) edged .22% higher. Large-caps were under mild pressure as the Dow Diamonds (DIA) lost .38% on the day. The sectors were mixed with materials and healthcare moving higher. Energy and consumer staples were the weaklings. Weakness in oil weighed on the energy sector because Spot Light Crude ($WTIC) lost over 7% the last eight days. Supply realities continued to weigh on crude and taper talk is not helping commodities.
**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):
Wed - Jan 08 - 07:00 - MBA Mortgage Index
Wed - Jan 08 - 08:15 - ADP Employment Report
Wed - Jan 08 - 10:30 - Crude Oil Inventories
Wed - Jan 08 - 14:00 - FOMC Minutes
Thu - Jan 09 - 07:30 - Challenger Job Cut Report
Thu - Jan 09 - 07:45 - European Central Bank Policy Statement
Thu - Jan 09 - 08:30 - Initial Jobless Claims
Thu - Jan 09 - 10:30 - Natural Gas Inventories
Fri - Jan 10 - 08:30 - Employment Report
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.
