XLF Grinds to Another New High - TLT Forms Triangle
Stocks were mixed again on Tuesday. The Nasdaq 100 ETF (QQQ) edged lower because Apple was weak, but the S&P 500 ETF (SPY) edged higher because financials were strong. Volume was below average again, but I would not read too much into this because we seem to be in the dog days of winter. Even though trading volume is low and price movements are minimal, price movements are still more up than down. There are simply no signs of significant selling pressure out there. The Finance SPDR (XLF) led the way higher on Tuesday with yet another new high. The Industrials SPDR (XLI) also hit a new high and homebuilders were strong with the Home Construction iShares (ITB) surging over 3%. The tape still favors the bulls and the path of least resistance is up.
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Key Reports and Events:
Wed - Feb 13 - 07:00 - MBA Mortgage Index
Wed - Feb 13 - 08:30 - Retail Sales
Wed - Feb 13 - 10:00 - Business Inventories
Wed - Feb 13 - 10:30 - Oil Inventories
Thu - Feb 14 - 08:30 - Jobless Claims
Thu - Feb 14 - 10:30 - Natural Gas Inventories
Fri - Feb 15 - 08:30 - Empire State Manufacturing
Fri - Feb 15 - 09:15 - Industrial Production/Utilization
Fri - Feb 15 - 09:55 - Michigan Sentiment
Sun - Feb 24 - 10:00 - Italian Parliamentary Elections
Fri - Mar 01 - 23:59 - Sequester Takes Effect (unless...)
Wed - Mar 27 - 23:59 - Government Shut Down Deadline
Wed - May 15 - 23:59 - New Debt Ceiling Deadline
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.
