by Steve Auger
The markets experienced a major bounce on a short trading week. Most of the price charts look quite bearish but I do not recommend shorting everything as this strategy could be quite dangerous at this time of year. So I am going to take a wait-and-see attitude. Aggressive traders could initiate shorts at the first signs of downward movement. The rest of us should stay on the sidelines this week, except for Basic Materials.
The following is this week's ETF sector analysis of the DJ symbols IYZ, IYW, IYT, IYM, IYK, IYJ, IYH, IYF, IYE, IYC and IDU.
iShares DJ US Telecom
ETF Symbol: IYZ
The short position in DJ US Telecom was stopped out last week. It looks like the ETF will start falling again but it is best to stay on the sidelines given the time of year. Look for a new downward move before reestablishing a new short position.
iShares DJ US Technology
ETF Symbol: IYW
iShares DJ Transportation Average
ETF Symbol: IYT
iShares DJ US Basic Materials
ETF Symbol: IYM
DJ US Basic Materials had a strong week but is now at the 200 day Simple Moving Average and the upper trend line of a descending channel. Enter a short position with a protective stop at $67.75.
iShares DJ US Consumer Goods
ETF Symbol: IYK
DJ US Consumer Goods - same commentary as US Telecom (IYZ).
iShares DJ US Industrials
ETF Symbol: IYJ
iShares DJ US Healthcare
ETF Symbol: IYH
DJ US Healthcare - Remain on the sidelines.
iShares DJ US Financial
ETF Symbol: IYF
DJ US Financial - Remain on the sidelines.
iShares DJ US Energy
ETF Symbol: IYE
DJ US Energy - same commentary as US Telecom (IYZ).
iShares DJ US Consumer Services
ETF Symbol: IYC
DJ US Consumer Services - Remain on the sidelines.
iShares DJ US Utilities
ETF Symbol: IDU
DJ US Utilities - Remain on the sidelines.
Sector Inspector's Sign Language
- Sell short,continue to hold a short position or close long position
- Do not initiate a new position
- Go long, continue to hold a long position
Technical Analysis Terminology
Disclosure: The author "Walks the walk" in addition to "Talking the Talk".