Stocks, Bonds, the Dollar and Gold Await the Fed
Stocks meandered again on Tuesday. Large techs caught a modest bid with the Nasdaq 100 ETF (QQQ) advancing .70% on the day. The remaining moves were non events. The sectors were mixed with the Technology SPDR (XLK), Industrials SPDR (XLI) and Utilities SPDR (XLU) finishing modestly higher. The Basic Materials SPDR (XLB) was hit with weakness in the Agribusiness ETF (MOO), Copper Miners ETF (COPX) and Metals & Mining SPDR (XME). Potash stocks were hit especially hard after Russia-based Uralkali, the world's largest producer, pulled out of a cartel and potash prices plunged. Good news for farmers, but bad news for potash stocks (POT, IPI, MOS, AGU). In the tech arena, the Networking iShares (IGN) surged 1.38% and the Semiconductor SPDR (XSD) rose over 1%. Trading remains thin and the FOMC policy statement is on deck today. Even though the Fed is unlikely to deviate from its position two weeks ago, this is a recipe for volatility and we could see some big swings in the afternoon.
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Key Reports and Events (all times Eastern):
Tue - Jul 30 - 09:00 - Case-Shiller Home Price Index
Tue - Jul 30 - 10:00 - Consumer Confidence
Wed - Jul 31 - 07:00 - MBA Mortgage Index
Wed - Jul 31 - 08:15 - ADP Employment Report
Wed - Jul 31 - 08:30 - GDP
Wed - Jul 31 - 09:45 - Chicago PMI
Wed - Jul 31 - 10:30 - Oil Inventories
Wed - Jul 31 - 14:00 - FOMC Rate Decision
Thu - Aug 01 - 07:30 - Challenger Job Cuts
Thu - Aug 01 - 08:30 - Jobless Claims
Thu - Aug 01 - 10:00 - ISM Index
Thu - Aug 01 - 10:00 - Construction Spending
Thu - Aug 01 - 10:30 - Natural Gas Inventories
Thu - Aug 01 - 14:00 - Auto Sales/Truck Sales
Fri - Aug 02 - 08:30 - Employment Report
Fri - Aug 02 - 08:30 - Personal Income & Spending
Fri - Aug 02 - 10:00 - Factory Orders
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.
