After one day of selling pressure on Monday, stocks rebounded with the technology sector leading the way. Networking stocks held up well during Monday's decline and semiconductor stocks led the way on Tuesday. Even though we did not see new highs in the major index ETFs, note that falling flags are taking shape in January and these are bullish continuation patterns. Within the tech sector, the Semiconductor SPDR (XSD) broke flag resistance and hit a new high, the Networking iShares (IGN) hit a new closing higher and the Internet ETF (FDN) formed a bullish pennant over this month. Tech appears to be the place in 2014.
**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 15 - 07:00 - MBA Mortgage Index
Wed - Jan 15 - 08:30 - PPI
Wed - Jan 15 - 10:30 - Crude Inventories
Wed - Jan 15 - 14:00 - Fed's Beige Book
Thu - Jan 16 - 08:30 - Initial Claims
Thu - Jan 16 - 08:30 - CPI
Thu - Jan 16 - 10:00 - NAHB Housing Market Index
Thu - Jan 16 - 10:30 - Natural Gas Inventories
Fri - Jan 17 - 08:30 - Housing Starts/Building Permits
Fri - Jan 17 - 09:15 - Industrial Production
Fri - Jan 17 - 09:55 - Michigan Sentiment
Fri - Jan 17 - 10:00 - JOLTS - Job Openings
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.
