Stocks gained ground on Wednesday with the major index ETFs posting modest gains. The Russell 2000 iShares (IWM) led the way with a .70% gain and a new high. The Energy SPDR (+2.4%), Materials SPDR (+1%) and Technology SPDR (.9%) led the sector SPDRs. The tech sector got a boost from the Networking iShares (IGN) and Semiconductor SPDR (XSD), both of which were up over 1%. The Regional Bank SPDR (KRE) surged over 1% and hit a 52-week high. I highlighted a breakout in KRE in the Market Message on Monday, as well as an inflection point for XLB. Of course, I also pointed out downtrends in the Metals & Mining SPDR (XME) and Steel ETF (SLX) in Tuesday's Market Message and these two surged on Wednesday. You win some and you lose some. The key is to win more than you lose.
**This chart analysis is for educational purposes only, and should not
be construed as a recommendation to buy, sell or sell-short said securities**
Short-term Overview (Wednesday, 16-April-2015):
- Breadth is uninspiring, but bullish overall.
- All five big sectors are in short-term uptrends.
- SPY and QQQ are in upswings within trading ranges.
- IWM remains in an uptrend and hit a new high on Wednesday.
- TLT bounced off support to keep its short-term uptrend alive.
- UUP fell back to its breakout zone for its first test.
- USO remains in a short-term uptrend, but is getting overbought.
- GLD is testing uptrend support.
The Equal-Weight S&P 500 ETF (RSP) continued higher and hit a new high on Wednesday. The swing remains up and I am raising key support to 81. Despite the new high, breadth was uninspiring as AD Percent finished at +29% and AD Volume Percent finished at +38%. This is the 11th day that breadth has been between -50% and +50%. Despite little conviction, note that AD Percent has been positive six of the last ten days and AD Volume Percent has been positive seven of the last ten days. Thus, short-term breadth remains bullish overall.
All five equal-weight sector ETFs are in short-term uptrends. The two laggards, the Equal-weight Finance ETF (RYF) and the Equal-weight Industrials ETF (RGI), perked up on Wednesday. RGI surged to its highest level of the month and RYF kept its slight uptrend alive with a move above Monday's high. The Equal-Weight Consumer Discretionary ETF (RCD) and Equal-weight Healthcare ETF (RYH) are in uptrends overall, but both are lagging a little this week because they did not exceed Monday's high. It is just a small lag and the short-term trends remain up. The Equal-weight Technology ETF (RYT) remains strong and hit a new high for the month.
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Key Reports and Events (all times Eastern):
Thu - Apr 16 - 08:30 - Initial Jobless Claims
Thu - Apr 16 - 08:30 - Housing Starts & Building Permits
Thu - Apr 16 - 10:00 - Philadelphia Fed
Thu - Apr 16 - 10:30 - Natural Gas Inventories
Fri - Apr 17 - 08:30 - Consumer Price Index (CPI)
Fri - Apr 17 - 10:00 - Michigan Sentiment
Fri - Apr 17 - 10:00 - Leading Economic Indicators
Wed - Apr 22 - 07:00 - MBA Mortgage Index
Wed - Apr 22 - 09:00 - FHFA Housing Price Index
Wed - Apr 22 - 10:00 - Existing Home Sales
Wed - Apr 22 - 10:30 - Oil Inventories
Thu - Apr 23 - 08:30 - Initial Jobless Claims
Thu - Apr 23 - 10:00 - New Home Sales
Thu - Apr 23 - 10:30 - Natural Gas Inventories
Fri - Apr 24 - 08:30 - Durable Goods Orders
Tue - Apr 28 - 09:00 - Case-Shiller Housing Index
Tue - Apr 28 - 10:00 - Consumer Confidence
Wed - Apr 29 - 07:00 - MBA Mortgage Purchase Index
Wed - Apr 29 - 10:00 - Pending Home Sales
Wed - Apr 29 - 10:30 - Oil Inventories
Wed - Apr 29 - 14:00 - FOMC Rate Decision
Thu - Apr 30 - 08:30 - Initial Jobless Claims
Thu - Apr 30 - 08:30 - PCE Prices
Thu - Apr 30 - 08:30 - Personal Income & Personal Spending
Thu - Apr 30 - 09:45 - Chicago PMI
Thu - Apr 30 - 10:30 - Natural Gas Inventories
Fri - May 01 - 08:15 - ADP Employment Report
Fri - May 01 - 10:00 - Construction Spending
Fri - May 01 - 10:00 - ISM Manufacturing Index
Fri - May 01 - 10:00 - Michigan Sentiment
Fri - May 01 - 17:00 - Auto-Truck Sales
This commentary is 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.
