Stocks did the old pop and drop on Monday. The S&P 500 surged above 2105 on the open, peaked in the first hour and worked its way to the 2092 level by the close. It was a rather orderly decline. Small-caps bucked the selling pressure as IWM finished with a small gain and hit a 52-week high during the day. Eight of the nine sectors were with the finance sector showing some buying interest. Strength in the finance sector helped small-caps because financial services is the biggest sector in IWM. On the downside, utilities got smacked with a 1% decline, metals and mining stocks were weak and energy took a breather.
**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 (Tuesday, 15-April-2015):
- The short-term breadth indicators are bullish.
- All five big sectors are in short-term uptrends, but finance is the weakest.
- SPY and QQQ are in upswings within larger trading ranges.
- IWM remains in an uptrend and hit a new high on Monday.
- TLT is still testing support from the late March lows.
- UUP broke out last week and this breakout is holding.
- USO remains in a short-term uptrend (but a long term downtrend).
- GLD remains in a short-term uptrend (but a long term downtrend).
The Equal-Weight S&P 500 ETF (RSP) continues to work its way higher with an uptrend since mid March and key support remains at 80.50. Short-term breadth remains quite flat because we have not seen AD Percent or AD Volume Percent exceed +50 on the upside or -50% on the downside the last nine days. There was a breadth surge 10 trading days above as both exceeded +65%. Note that this big up day will drop off when the 10-day SMA is updated after Tuesday's close. For now, both 10-day SMAs are in bull mode.
All five equal-weight sector ETFs are in short-term uptrends. The Equal-Weight Consumer Discretionary ETF (RCD), Equal-weight Technology ETF (RYT) and Equal-weight Healthcare ETF (RYH) are in the strongest uptrends and leading overall. The Equal-weight Finance ETF (RYF) still has the weakest uptrend because it has yet to exceed its early April high. The Equal-weight Industrials ETF (RGI) broke out with a surge on Friday, but fell back at the late March high.
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Key Reports and Events (all times Eastern):
Tue - Apr 14 - 08:30 - Retail Sales
Tue - Apr 14 - 08:30 - Producer Price Index (PPI)
Wed - Apr 15 - 07:00 - MBA Mortgage Index
Wed - Apr 15 - 08:30 - Empire State Manufacturing
Wed - Apr 15 - 09:15 - Industrial Production
Wed - Apr 15 - 10:00 - NAHB Housing Market Index
Wed - Apr 15 - 10:30 - Oil Inventories
Wed - Apr 15 - 14:00 - Fed's Beige Book
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.
