-- THE KEY TO THE BREAKOUTS, MATERIAL SECTOR LEADERSHIP, SHORT-TERM BREADTH INDICATORS, UTILITIES ETFS HIT SUPPORT, TLT HITS FIBONACCI CLUSTER, OIL, GOLD, URANIUM AND LOTS OF STOCKS --

WEBINAR CHARTS AND LINK... Stocks are short-term overbought after big runs in February, but the breakouts are holding and these are bullish until proven otherwise. Today's Webinar will look at five stock indices, sector High-Low Percent, a short-term breadth indicator, the utilities sector, the long-term Treasury bond ETF, oil, energy-related ETFs, gold, the Gold Miners ETF, and a bunch of individual stocks. Click here for the video.

BREAKOUT ZONES MARK FIRST SUPPORT... Chart 1 shows the major stock indices for review, and there is no change since Friday. The breakout zones turn into the first support zones to watch. These are marked in light green on each chart. The breakout zone for the S&P 500 is set in the 2040-2050 area. A strong breakout should hold and a move back below 2040 would put the S&P 500 back in a trading range. The January lows mark key support in the 1975-2000 area. This area held throughout January and a close below this zone would warrant a reassessment of the long-term uptrend.

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Chart 1

MATERIALS TAKE THE HIGH-LOW PERCENT LEAD... Chart 2 shows High-Low Percent for the nine sectors and the sectors are ranked by the 10-day EMA of High-Low Percent. Materials HiLo% ($XLBHLP) is the strongest because the indicator surged above +40% on Friday and the 10-day EMA is above +20%. Think about that for a moment. Over 40% of the stocks in this sector hit new highs last week. This shows broad strength within the sector. Three of the four offensive sectors made the top five: technology, industrials and consumer discretionary. The 10-day EMAs for High-Low Percent for these three sectors moved above +10%. Overall, it is quite positive that three of the five leaders are offensive sectors.

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Chart 2

SHORT-TERM BREADTH HITS EXTREMES FOR XLK AND XLU... Chart 3 shows the 10-day SMA for AD Percent for the nine sectors. This is basically a short-term breadth oscillator that fluctuates above/below the zero line. Chartists can rank this indicator to determine the strongest and weakest sectors over the last ten days. The technology, materials and finance sectors are the strongest so far in February. Chartists can also use this indicator to identify overbought and oversold conditions. As Greg Morris pointed out, however, overbought and oversold levels fluctuate and usually become clear with hindsight, as does everything. Because they fluctuate, prior overbought or oversold levels might not mark current overbought and oversold. Let's take a stab anyway. Overall, it seem that these breadth indicators become oversold with a move above +40%. Currently, the 10-day SMA for Technology AD% ($XLKADP) is the only one above +40%. The others have some room to run before becoming overbought by this metric. The 10-day SMA for Utilities AD% ($XLUADP) is the only one that is oversold (below -20%). This is interesting because XLU is in an uptrend overall. A move back above zero would suggest that short-term breadth is improving for this sector.

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Chart 3

UTILITIES ETFS HIT SUPPORT ZONES... Chart 4 shows three utilities ETFs (large-cap, equal-weight and small-cap) and three indicators (High-Low Percent, AD Percent and SCTR). These ETFs and indicators provide a great overview for the sector. First, note that all three ETFs are in long-term uptrends because they hit new highs in December-January. This suggests that the decline over the last few weeks is a correction within a bigger uptrend. The decline, however, has yet to reverse because selling pressure continued today.

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Chart 4

The indicators turned down the last few weeks, but have yet to cross their bearish thresholds, which is another reason I think the bigger trend is still up. High-Low Percent for XLU turned negative, but did not cross below the -5% threshold, which would be bearish. A subsequent move back above +5% would suggest that the correction has ended. The 120-day EMA for Utilities AD% ($XLUADP) fell the last four weeks, but remains positive overall and has yet to cross its bearish threshold (-1%). The StockCharts Technical Ranks (SCTR) for all three moved below 60, but have yet to cross the bearish threshold (40).

TREASURY BOND ETF HITS FIB CLUSTER... Utilities where hit hard when long-term Treasury yields surged and the 20+ YR T-Bond ETF (TLT) plunged this month. This suggests that a short-term bottom in TLT is needed if the utilities ETFs are going to hold support. Chart 5 shows weekly candlesticks for TLT and a long-term uptrend. TLT became overbought after surging from 117.5 to 138 in just ten weeks (+17.9 percent). The ETF fell back to the 127.5 area and is back in the middle of the Raff Regression Channel. This decline alleviated overbought conditions and put ETF in a potential reversal zone on the daily chart.

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Chart 5

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Chart 6

Chart 6 shows daily bars for a medium-term perspective and TLT is entering a Fibonacci cluster zone. The blue Fibonacci Retracements Tool extends from the September low to the January high and the gray one extends from the November low to the January high. The blue one marks the 38.2-50% retracement zone in the 125-127.5 area and the gray one marks the 50-61.8% retracement zone in the same area. Together, we have a Fibonacci cluster zone that may mark support and produce a short-term reversal. Also notice that broken resistance (red highlight) turns into support in this area. The February trend, however, is clearly down and there are no signs of firmness yet.

OUTLOOK FOR OIL... Chart 7 shows Spot Light Crude ($WTCI) bouncing back above 50, but the long-term outlook remains bearish at worst and neutral at best. After becoming oversold several times in October, November and December, oil finally hit the mother of all oversold levels and bounced. The long-term trend is down, but an interesting pattern is forming on the daily chart and this oversold bounce could extend.

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Chart 7

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Chart 8

Chart 8 shows March Crude Futures (^CLH15) bouncing above 50 and stalling the last two weeks. This stall looks like a small triangle or pennant. A break above 54 would signal a continuation of the prior bounce and target a move to the upper 50s. The problem, however, is the long-term downtrend, which could pull trump at any time.

LONG-TERM GOLD CHART... Chart 9 shows a weekly chart for Spot Gold ($GOLD). First, the long-term trend is down because gold hit a 52-week low in October. This means the bounce back above 1200 was viewed as a counter-trend bounce. Gold hit resistance in the middle of the consolidation (1300) and fell back to 1205 today. A continuation of the long-term downtrend suggests that new lows are in store for bullion. Chart 10 shows the Gold SPDR (GLD) for reference. Chart 11 shows the Gold Miners ETF (GDX) turning down at the 62% retracement and the Gold Miners BPI ($BPGDM) falling to 40%.

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Chart 9

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Chart 10

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Chart 11

URANIUM ETF SPRINGS A BEAR TRAP... Chart 12 shows the Global X Uranium ETF (URA) breaking support in mid January, stalling below the support break and then surging back above broken support. The ETF is up over 5% today. Overall, it looks like a bear trap, which is a failed support break. This is a positive development. Also notice that Aroon Up moved above Aroon Down and hit 100. This suggests that a new uptrend is emerging. Chartists can mark support at 10.5, a break of which could negate this bear trap. You can read more about Aroon in our ChartSchool.

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Chart 12

STOCKS AND Q&A... The webinar also features the following stocks: JCI, LL, SSP, TXRH, EBAY, STAY, AMGN, MYL, SUNE, CY. This section starts around the 30 minute mark.

The Q&A sector shows details on the Aroon indicators and then covers the following stocks: BABA, CS, FB, MU, NEM, SO, VOD, YHOO. This section starts around the 40 minute mark.

Click here for the video.