Stocks were all over the place last week. The S&P 500 plunged on Tuesday, rebounded on Wednesday and fell back on Thursday-Friday. For the week, the major index ETFs ended lower by around 1%. All sectors were lower with energy and industrials leading the way down. The healthcare and technology sectors held up the best and continue to lead the market on the upside. Banks also held up fairly well as the Regional Bank SPDR (KRE) lost just .24% for the week. It is going to be a busy week on the news front. While I am not sure if the news will affect existing trends, we can expect some added volatility in stocks, bonds, the Euro and gold. The economic docket is full with over a dozen releases. These include ISM Manufacturing on Monday, Auto-Truck Sales on Tuesday, ISM Services on Wednesday, Initial Claims on Thursday and non-farm payrolls on Friday. Friday is also June 5th, which is the deadline for Greece to make a big payment to the IMF. We can expect this "deadline" to go down to the wire and the outcome could affect the Euro, Dollar, and gold. I may just have to whip up some Tzatziki on Friday.
**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 (Monday, 1-June-2015):
- Short-term breadth is bearish as both indicator broke key levels.
- Three of the five equal-weight sectors are in uptrends.
- SPY and QQQ bounced off support to keep their short-term uptrends alive.
- IWM bounced, but remains within a contracting range.
- TLT remains in a short-term uptrend, but this is considered a counter-trend bounce.
- UUP is in a short-term uptrend.
- USO surged to channel resistance, but remains short of a trend-changing breakout.
- GLD remains very volatile and the current swing (two weeks) is down.
The Equal-Weight S&P 500 ETF (RSP) started the week with a gap down and sharp decline, bounced on Wednesday and fell back on Thursday-Friday. The ETF ended at the top of the support zone in the 81.5-82 area. It is a tough call because Tuesday's gap-decline was clearly negative and it held. On the other hand, there is still a grinding uptrend since mid March. I am still erring with the bulls as long as support at 81.5 holds.
Breadth turned bearish with three down days last week and one up day. AD Percent exceeded -40% three of the last five days and was down four of the last five days. AD Volume Percent exceeded -40% two of the last four days. Overall, the 10-day SMAs ended the week below -5% and breadth is bearish.
Three of the five equal-weight sectors ETFs are in uptrends. The Equal-Weight Consumer Discretionary ETF (RCD) and the Equal-weight Industrials ETF (RGI) broke down with sharp declines last week. The Equal-weight Finance ETF (RYF) was basically flat. The Equal-weight Technology ETF (RYT) and the Equal-weight Healthcare ETF (RYH) continue to lead as both hit new highs last week.
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Key Reports and Events (all times Eastern):
Mon - Jun 01 - 08:30 - Personal Income & Spending
Mon - Jun 01 - 08:30 - PCE Prices
Mon - Jun 01 - 10:00 - ISM Manufacturing Index
Mon - Jun 01 - 10:00 - Construction Spending
Tue - Jun 02 - 10:00 - Factory Orders
Tue - Jun 02 - 17:00 - Auto/Truck Sales
Wed - Jun 03 - 07:00 - MBA Mortgage Index
Wed - Jun 03 - 08:15 - ADP Employment Report
Wed - Jun 03 - 08:30 - Trade Balance
Wed - Jun 03 - 10:00 - ISM Services Index
Wed - Jun 03 - 10:30 - Crude Oil Inventories
Wed - Jun 03 - 14:00 - Fed Beige Book
Thu - Jun 04 - 07:30 - Challenger Job Report
Thu - Jun 04 - 08:30 - Initial Jobless Claims
Thu - Jun 04 - 10:30 - Natural Gas Inventories
Fri - Jun 05 - 08:30 - Employment Report
Fri - Jun 05 - 14:00 - Consumer Credit
Tue - Jun 09 - 10:00 - Wholesale Inventories
Tue - Jun 09 - 10:00 - JOLTS - Job Openings
Wed - Jun 10 - 07:00 - MBA Mortgage Index
Wed - Jun 10 - 10:30 - Crude Oil Inventories
Wed - Jun 10 - 14:00 - Treasury Budget
Thu - Jun 11 - 08:30 - Initial Jobless Claims
Thu - Jun 11 - 08:30 - Retail Sales
Thu - Jun 11 - 10:00 - Business Inventories
Thu - Jun 11 - 10:30 - Natural Gas Inventories
Fri - Jun 12 - 08:30 - Producer Price Index (PPI)
Fri - Jun 12 - 10:00 - Michigan Sentiment
Mon - Jun 15 - 08:30 - Empire State Manufacturing
Mon - Jun 15 - 09:15 - Industrial Production
Mon - Jun 15 - 10:00 - NAHB Housing Market Index
Tue - Jun 16 - 08:30 - Housing Starts & Building Permits
Wed - Jun 17 - 07:00 - MBA Mortgage Index
Wed - Jun 17 - 10:30 - Crude Oil Inventories
Wed - Jun 17 - 14:00 - FOMC Rate Decision
Thu - Jun 18 - 08:30 - Initial Jobless Claims
Thu - Jun 18 - 08:30 - Consumer Price Index (CPI)
Thu - Jun 18 - 10:00 - Philadelphia Fed
Thu - Jun 18 - 10:00 - Leading Economic Indicators
Thu - Jun 18 - 10:30 - Natural Gas Inventories
Mon - Jun 22 - 10:00 - Existing Home Sales
Tue - Jun 23 - 08:30 - Durable Goods Orders
Tue - Jun 23 - 09:00 - FHFA Housing Price Index
Tue - Jun 23 - 10:00 - New Home Sales
Wed - Jun 24 - 07:00 - MBA Mortgage Index
Wed - Jun 24 - 08:30 - GDP
Wed - Jun 24 - 10:30 - Crude Oil Inventories
Thu - Jun 25 - 08:30 - Initial Jobless Claims
Thu - Jun 25 - 08:30 - Personal Income & Spending
Thu - Jun 25 - 08:30 - PCE Prices
Thu - Jun 25 - 10:30 - Natural Gas Inventories
Fri - Jun 26 - 10:00 - Michigan Sentiment
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.
