Stocks traded relatively flat the first part of the day and then got hit with selling pressure in the afternoon. Techs led the way down with the Nasdaq 100 ETF (QQQ) losing around 1%. Eight of the nine sectors were down with the Consumer Discretionary SPDR (XLY) and Energy SPDR (XLE) pacing the losses. XLY is correcting after a big move last week. XLE formed a bearish engulfing and is already getting cold feet after last week's flag breakout. Despite a big move in the Shanghai Composite ($SSEC) over the last few days, the Metals and Mining ETF (XME) fell almost 2% and the Market Vectors Coal ETF (KOL) was down over 1%. XME formed a pennant over the last seven days and KOL formed a bearish engulfing on Monday. The market also showed signs of risk aversion as biotechs fell especially hard and the Biotech SPDR (XBI) lost 2.5%. Stocks are indeed ripe for a correction, but the short and medium-term trends are clearly up and any weakness is likely to be short-lived.
**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):
Wed - Nov 20 - 07:00 - MBA Mortgage Index
Wed - Nov 20 - 08:30 - Retail Sales
Wed - Nov 20 - 08:30 - Consumer Price Index (CPI)
Wed - Nov 20 - 10:00 - Existing Home Sales
Wed - Nov 20 - 10:00 - Business Inventories
Wed - Nov 20 - 10:30 - Oil Inventories
Wed - Nov 20 - 14:00 - FOMC Minutes
Thu - Nov 21 - 08:30 - Initial Jobless Claims
Thu - Nov 21 - 08:30 - Producer Price Index (PPI)
Thu - Nov 21 - 10:00 - Philadelphia Fed
Thu - Nov 21 - 10:30 - Natural Gas Inventories
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.
