SPY remains in an uptrend on the daily chart with a rising price channel over the last eight weeks. After surging above 122 last Thursday and then stalling for two days, the ETF formed a bearish engulfing pattern on Tuesday. However, there was no follow through as the ETF recouped... READ MORE
Allegheny Technologies (ATI) formed an evening star over the prior three days. This bearish reversal pattern consists of three candlesticks: a long white candlestick, a small body candlestick and a long red candlestick to complete the reversal. The predefined scans page showed 14 such patterns forming on the NYSE and... READ MORE
It is always difficult to pick the exact cause of an advance or decline in stocks, but the positive correlation between the Euro and stocks has been quite strong this year. The Euro Currency Trust (FXE) extended its three day slide with a move below 137.5 on Tuesday. Actually,... READ MORE
BA consolidates above breakout. BG forms pennant after engulfing. HOLX traces out a triangle. CTXS stalls near key retracement. ERTS surges off support with good volume. GCI gaps off support with good volume. MON forms harami cross at resistance. SEE forms rising wedge after sharp decline. ----------------------------------------------------------------------------- This commentary and... READ MORE
2010 is going to be known as the year of the hard assets. The PerfChart below shows the S&P 500, Silver, Gold, Oil, the Dollar and the Euro. Stocks are up, but lagging the three commodities. Both the Euro Index and the Dollar Index are down for the... READ MORE
With the Euro taking a big hit on Friday-Monday, bullish resolve in the stock market will be tested right off the bat this week. The Dollar strengthened for three reasons. First, the employment report showed strong job creation, which is positive for the economy and puts upward pressure on interest... READ MORE
Although a little late to the party, the Nikkei 225 ($NIKK) is showing signs of life with an inverse head-and-shoulders pattern taking shape. Note that the S&P 500 formed an inverse head-and-shoulders from mid May to mid September and broke resistance in the second half of September. The... READ MORE
The Homebuilders SPDR (XHB) finally broke above resistance with a surge the last few days. XHB was one of the laggards because it had yet to break its July high. This changed on Thursday as the ETF broke resistance with a gap and long white candlestick. Also notice that the... READ MORE
That certainly did not take long. Five indicators were downgraded from bullish to neutral last Friday. These indicators did not break down to warrant a bearish stance, but I downgraded them to neutral because they were not confirming the new highs seen in the major indices. That changed this week.... READ MORE
Stocks started the week strong and surged on Thursday with big gains in all major indices. All sectors were up with materials, energy, and finance leading the charge. These three were up over 3%. It is positive to see relative strength coming from the finance sector. On the daily SPY... READ MORE
After retracing around 62% of the prior advance, Newmont Mining (NEM) broke above flag resistance with a surge over the last few days. The breakout was under threat with Wednesday's pullback, but Thursday's surge keeps the flag breakout in play. There is one concern. NEM remains... READ MORE
$CIEN firms at key retracement. $CVS forms bull flag. $FITB shows relative strength. $GPS, $HD, $QLGC and $WFC. ----------------------------------------------------------------------------- This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise). We all need... READ MORE
Two down, one to go. The elections and the Fed have passed with little fanfare for stocks. Details of QE2 were released in the Fed policy statement. Bonds went one way and the Finance SPDR (XLF) went the other way. Funny how that worked. Bonds, which are direct beneficiaries of... READ MORE
After plunging on Monday, the Regional Bank SPDR (KRE) firmed on Tuesday to form a harami. This is essentially an inside day. Also notice that the ETF managed to firm near the 62% retracement mark. Wednesday's surged above Monday's high confirms the harami. Click this image... READ MORE
The Euro broke resistance as long-term rates fell back to support. The first chart shows the Euro Currency Trust (FXE) breaking above range resistance and moving above the triangle trendline. This bullish development for the Euro is a positive for stocks. Range support around 138-138.2 is now the first... READ MORE
The Natural Gas Continuous-Futures ($NATGAS) formed a large weekly outside reversal pattern last week. Combined with a falling wedge and support in the 3.3-3.5 area, Natural Gas is threatening a bounce within its long downtrend. Watch the MACD-Histogram for a move into positive territory to signal some upside... READ MORE
The Nikkei 225 ($NIKK) failed at resistance as the Yen surged to new highs. The Nikkei 225 surged in September, but never broke resistance as a weak Dollar drove the Yen higher. It is possible that an inverse head-and-shoulders pattern is forming, but there are no signs of support or... READ MORE
First note that I will be travelling on Tuesday and will not be able to write a commentary that day. The next commentary will be Wednesday morning. It is just as well because the markets will digest the week's first big event on Wednesday morning. The elections are... READ MORE
Linear Tech (LLTC) formed a large triangle over the last three months and broke resistance with a surge this week. Also notice that the stock broke above its September highs. Semis are showing upside leadership and this is positive for the tech sector. Click this image for a live chart... READ MORE
The indicator summary remains bullish overall, but five indicators were downgraded from bullish to neutral. First, the NYSE AD Volume Line peaked in mid October and is starting to lag. Second, the Nasdaq AD Line flattened as the Nasdaq continued higher. Third, the S&P 500, Nasdaq 100, VIX... READ MORE
There are likely to be some serious fireworks next week. This is one of the biggest news weeks that I can remember. First, we have election results on Tuesday. Second, the Fed meets on Wednesday. Third, there is the employment report on Friday. We can also throw in the ISM... READ MORE
After a breakout and big surge towards the August highs, the USO Oil Fund (USO) took a breather with a pullback over the last few weeks. The falling zigzag in October looks like a falling flag, which is a bullish continuation pattern. The surge from 32.5 to 36.5... READ MORE
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... READ MORE
There is no change on the daily chart. Even though the advance has grown laborious, SPY remains in an uptrend. The surge above 114 on September 20th marked the easy part of the advance. Since this surge, SPY has worked its way higher within a rising price channel. All kinds... READ MORE
The DJ Greece Index ($GRDOW) shows a potential head-and-shoulders pattern evolving over the last five months. This version is a continuation pattern. A move below the October low would confirm the pattern and target lower prices. Click this image for a live chart... READ MORE
There were some serious rumblings in the intermarket arena on Tuesday. Bonds plunged, long-term rates surged, the Euro declined sharply and the Dollar bounced. Forget about the Fed and QE2. These are already priced into the market. Bonds and the Dollar are looking ahead of QE2. Long-term rates are rising... READ MORE
After a trendline breakout in August, Vertex Pharma (VRTX) traced out a potentially bullish ascending triangle. Notice the higher low in early October and the equal highs in August and September. A break above the September high on good volume would confirm this bullish pattern. Click this image for a... READ MORE
Charts: AKS, ALTR, AMKR, HOLX, HRS, IDCC, MAS, POOL, WHR ----------------------------------------------------------------------------- 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... READ MORE
I continue to watch bonds and the Euro for clues on equities. The first chart shows the Euro Currency Trust (FXE) surging on the open, but failing to break last week's high and falling back. It is possible that we have a lower high taking shape after last... READ MORE
John Murphy's industry group perfchart shows oil services and internet stocks leading the market since August 27th. It's a rather motly pair. Banks are the biggest laggards. In a bit of a surprise, gold and silver stocks ($XAU) are also lagging the broader market. Click this... READ MORE
The Euro Currency Trust (FXE) and the S&P 500 ETF (SPY) have been positively correlated throughout 2010. This positive correlation is especially strong since late August. Both are up over 10% since late August. Why the positive correlation? First, a weak Dollar is beneficial to US exports because... READ MORE
The Multisector Energy Fund (DBE) has been stuck in a trading range since late May. Range support is set near 25 and range resistance near 22. With the October pullback, the ETF has failed at resistance and showed weakness. Look for a break above this week's high to... READ MORE
There is no change in the indicator summary, which remains firmly bullish. With all ten indicators in bull mode, it would take a few weeks to turn the tide bearish. I am not predicting this. I am merely reinforcing the lagging nature of this indicator summary. It is not designed... READ MORE
The intermarket picture is getting quite interesting. First, the 10-year Treasury Yield ($TNX) broke wedge resistance to signal a continuation of last week's breakout. A bullish breakout in yields means a bearish breakdown in bonds. Frankly, I am not sure how or if this will affect stocks. The... READ MORE
With a strong open Thursday morning and a sharp move lower in the afternoon, the Russell 2000 ETF has a bearish engulfing pattern working on the day. The bulls started in control, but the bears clearly took control in the afternoon. Also notice that the MACD-Histogram turned negative three days... READ MORE
AFFX bounces off support with good volume. ESRX breaks flag resistance. EXP forms long triangle. INTC bounces off support with good volume. PAYX forms bullish consolidation. ----------------------------------------------------------------------------- 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... READ MORE
The bulls are clearly not going down without a fight. While yesterday's rebound looked impressive, breadth fell short of the prior highs and the bulls appear to be loosing steam. The first chart shows the Nasdaq AD Volume Line and Net Advancing Volume. The AD Volume Line remains... READ MORE
The Nasdaq %Above 50-day SMA ($NAA50R) is trading near the prior 2010 highs. This indicator surged to the mid 70s in January and again in April. Prior moves to this area signaled overbought conditions that led to a pullback. Click this image for a live chart... READ MORE
Big moves in the Euro and Apple weighed on stocks Tuesday. Apple declined after its earnings announcement, which was surely a buy-the-rumor sell-the-news event. The Euro Currency Trust (FXE) declined almost 2% after hitting a key retracement level last week. This was covered in Friday's Market Message. For... READ MORE
The Homebuilders SPDR (XHB) surged to resistance at the end of Septmeber, but failed to follow through with a breakout in October. After trading flat for two weeks, the ETF is starting to move lower and showing relative weakness. Again. Click this image for a live chart.... READ MORE