Stocks finished mixed again with some strength coming into the S&P 500 SPDR (SPY) and some weakness in the Russell 2000 ETF (IWM). The moves, however, were fractional and insignificant. Six of the nine sectors were up with the three defensive sectors moving lower (healthcare, utilities and consumer staples). The Finance SPDR (XLF) showed strength again and renewed leadership from financials is positive. The chart below shows the S&P 500 AD Line hitting a new high. Short-term, we can watch support from the late February lows for a trend reversal.
**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):
Thu - Mar 06 - 07:30 - Challenger Job Report
Thu - Mar 06 - 08:30 - Initial Jobless Claims
Thu - Mar 06 - 08:30 - Continuing Claims
Thu - Mar 06 - 10:00 - Factory Orders
Thu - Mar 06 - 10:30 - Natural Gas Inventories
Fri - Mar 07 - 08:30 - Employment
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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