Stocks opened sharply lower, bounced a bit and then traded flat the rest of the day. The major index ETFs spent the entire day in negative territory and closed with modest losses. Dow futures are down around 100 points at 4:30AM ET on reports that Greece will not submit a counter proposal to the EU Finance Minister Summit on Thursday. This means the Grexit is one step closer, but by no means a given because the 11th hours seems to last forever on this one. Eight of the nine sectors were down. Only the HealthCare SPDR (XLV) managed to gain. Most industry group ETFs were down with the Internet ETF (FDN), Airline ETF (JETS), Metals & Mining SPDR (XME), Steel ETF (SLX) and Oil & Gas Equip & Services SPDR (XES) falling over 1%. The Cyber Security ETF (HACK), Home Construction iShares (ITB) and HealthCare Providers ETF (IHF) bucked the selling to produce small gains.
**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, 16-June-2015):
- Short-term breadth remains bearish overall.
- Three of the five equal-weight sectors are in short-term downtrends.
- SPY formed its third lower high with its third gap and remains in a downswing.
- QQQ is flat and trading at triangle support.
- IWM fell back, but bounced off support and remains in an uptrend.
- TLT remains in a strong downtrend.
- UUP is in a short-term downtrend.
- USO is challenging resistance of a bull flag.
- GLD is in a short-term downtrend, but challenging resistance.
The Equal-Weight S&P 500 ETF (RSP) opened sharply lower and then traded flat the rest of the day. A spinning top with a hollow red candlestick formed. This candlestick is red because Monday's close was below Friday's close. It is hollow because the close was above the open. Hollow red candlestick and filled black candlesticks are relatively rare. The spinning top shows indecision, but the trend is down and Monday's gap is bearish. RSP needs to break the late May trend line and last week's high to reverse the downtrend.
AD Percent and AD Volume Percent finished below -50% as selling pressure picked up on Monday. AD Percent has been below -50% three of the last ten days and AD Volume Percent has been below -50% for four of the last ten days. Overall, the 10-day SMAs turned bearish in late May and remain bearish.
Three of the five equal-weight sector ETFs are in downtrends. Again, I am watching the Equal-Weight Consumer Discretionary ETF (RCD) closely as the triangle narrows. The ETF is on the verge of a support break and this would be bearish. The Equal-weight Technology ETF (RYT) and Equal-weight Industrials ETF (RGI) are in clear downtrends. The Equal-weight Finance ETF (RYF) fell back, but remains above support from last week's low. The Equal-weight Healthcare ETF (RYH) also fell back, but bounced off support from the early June lows.
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Key Reports and Events (all times Eastern):
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 Policy Statement
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 - 08:00 - EU Summit
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 - 08:00 - EU Summit
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.
