Stocks around the world surged on Wednesday with many stock indices breaking out of their August downtrends. In the US, small-caps led the way higher with the Russell 2000 surging 3.81%. The Nasdaq and S&P 500 were both up around 3%. All sectors were up with consumer... READ MORE
The S&P Sector Market Carpet shows a sea of green on Monday. All sectors were up sharply with consumer discretionary (+1.7) and technology (+1.6) showing the biggest average gains. Keep in mind that these numbers represent the average gain or loss for all stocks in the... READ MORE
The overall trend for most short-term indicators remains down and important resistance levels were established with Monday's decline. As with the major index ETFs, I will be watching the Friday-Monday highs for a breakout and trend reversal. The charts below show the Nasdaq AD Volume Line and NYSE... READ MORE
The AD Line and cumulative Net New Highs line shows relative weakness in Nasdaq stocks. From the breadth indicators page at Stockcharts.com, the chart below shows these two Nasdaq indicators moving sharply lower the last three weeks. The cumulative Net New Highs lines for the NYSE and Amex are... READ MORE
After big gains on Friday, stocks gave it back with big losses on Monday. A shallow pullback on modest breadth would have been positive, but yesterday's decline did not fit that bill. All nine sectors were lower, declines out numbered advances 4 to 1 and declining volume swamped... READ MORE
With the close at 10040 on Tuesday, the Dow retraced around 61.8% of its prior advance (Jul-Aug). This Fibonacci retracement sometimes marks a reversal zone. The Dow managed to recover after dip below 10000 on Friday and close above 10100. Resistance might not be far off through. The 50-day... READ MORE
After a rather volatile first hour on Friday, stocks found their footing and moved steadily higher throughout the day. Friday's action produced a few positives as we move into an important week. First, stocks managed to overcome early weakness. SPY moved below 104.5 in the first 40... READ MORE
Stocks markets around the world have been moving lower the last few weeks, but there are some pockets of strength to be found in Asia. As this snippet from the CandleGlance International iShares page shows, the Malaysia iShares (EWM) shows relative strength as it trades near its highs for the... READ MORE
The indicator summary moved further into the red as the Bullish Percent Indices turned bearish and the S&P 500 Volatility Index ($VIX) broke above its mid July high. The NYSE AD Line and NYSE Net New Highs are the only two indicators keeping this summary from total negativity.... READ MORE
Stocks started the day on firm footing after jobless claims were better-than-expected. However, the morning pop did not last long as SPY moved into negative territory by 11AM. Selling pressure continued throughout the day and the index closed near its lows. Stocks failed to rally on "good" news... READ MORE
Stocks started the day week, but recovered and closed near the highs for the day. The Dow SPDR (DIA) firmed near its mid July low, the Nasdaq 100 ETF (QQQQ) formed a bullish engulfing near its 62% retracement and the Russell 2000 ETF (IWM) bounced off its early July low.... READ MORE
A look at the Market Indices Carpet in market cap mode shows Apple (AAPL) taking up the most real estate with the largest rectangle. This means Apple carries the most weight in the index. Click the "Nasdaq 100" header to focus on the Nasdaq 100. Click the market... READ MORE
With a gap down and sharp decline, the S&P 500 ETF (SPY) closed below 106 for the first time since early July. Selling pressure has been quite intense since August 9. SPY has closed down 9 of the last 11 days (red candlesticks) with three sizable down gaps... READ MORE
Stocks were down sharply in afternoon trading on Tuesday, but the Utilities (SPDR) was bucking the trend with a small gain. As this screen grab from the Market Summary page shows, XLU was the only sector in positive territory. Looks like utilities like low interest rates. Click this image for... READ MORE
Despite excessively bearish sentiment, the technical conditions in the stock market are clearly bearish for the short-term and medium-term. Sentiment is hard to quantify, but I get the feeling that sentiment is overwhelmingly bearish as we head into the September-October period. Consider the following. First, the NY Times reports that... READ MORE
Year-to-date sector performance shows five up and four down. In a rather strange twist, the consumer discretionary and industrial sectors are up, but the technology and finance sectors are down. Performance for the S&P 500 reflects the net result for the nine sectors (down 4.28%). Click this... READ MORE
The August trend remains down for the major index ETFs, but techs are starting to show relative strength with QQQQ edging higher on Friday. Despite some signs of firmness, we have yet to see any signs of significant strength that would warrant a bullish stance. The first chart shows the... READ MORE
The Point & Figure chart for QQQQ shows clear support and resistance lines for 2010. The ETF advanced for 9-10 months with a long column of X's in 2009 and then embarked on a consolidation in 2010. Notice that the X's started in March 2009 and... READ MORE
The S&P 500 ETF (SPY) gapped up on Tuesday and then filled that gap with a long red candlestick on Thursday. The inability to hold the gap is clearly negative. Also notice that volume increased as the ETF declined last week and this week. Click this image for... READ MORE
The indicator summary would be much more negative were it not for strength in the NYSE breadth statistics. NYSE Net New Highs remain positive and the AD Line has yet to break down. Another decline next week would likely push these two indicators into bear mode. Another decline next week... READ MORE
SPY gapped up on Tuesday and then filled that gap with a long red candlestick on Thursday. Some traders apply a three day rule to gaps. A gap that holds three days is valid. One that fails within three days is not. Tuesday's gap has been invalidated. In... READ MORE
It is one of those times when I can make pretty good arguments for both the bullish and bearish case - short-term and medium-term. This means we could be in for some choppy trading the next few days, weeks or even months. On the bullish side, sentiment seems to be... READ MORE
Half of the 10 most active NYSE stocks on Wednesday came from the finance sector. The Free Charts page at Stockcharts.com shows the 10 most active for the Nasdaq and NYSE. Even though the market was mixed today, nine were up and only one was down. All five financials... READ MORE
Stocks bounced on Tuesday, but I was not impressed with the finish or with breadth. First, let's look at breadth. The charts below show the AD Volume Line and Net Advancing Volume for the NYSE and Nasdaq. NYSE Net Advancing Volume reached the +1000 level four times during... READ MORE
The Shanghai Composite ($SSEC) and the Materials SPDR (XLB) have been moving together in 2010. The moves in XLB are a little more exaggerated, but the positive correlation is clear. Most recently, both bottomed in early July and moved higher the last six weeks. Click this image for a live... READ MORE
Trend following and mean reversion are two types of trading strategies. Trend followers wait for a reversal and confirmation with a support break or resistance breakout. Mean reversion traders look for overbought or oversold conditions to pick tops or bottoms. The two styles are diametrically opposed, but both systems have... READ MORE
Outside of gold, August has been a tough month for commodities. The PerfChart below shows performance for six commodity related ETFs. Only one is up. Metals, Oil and Natural Gas are down rather sharply. Gold, in contrast is up over 2%. In an interesting twist, notice that gold is up... READ MORE
Selling pressure was intense enough to produce a short-term breadth breakdown. The charts below show the 10-day SMA for Net Advancing Volume for the Nasdaq and NYSE. Net Advancing Volume is simply the volume of advancing stocks less the volume of declining stocks. A move above +100 shows a significant... READ MORE
Bonds have been on a tear since April with the 10-Year US Treasury Note ($UST) advancing some 8% in three months. The DJ Corporate Bond Index ($DJCBP) is not far behind with a 4.4% gain since early June. The advances over the last two months are exceptional sharp and... READ MORE
Even though the indicator summary flipped to positive last week, I noted that a sharp decline from current levels could easily flip a few indicators back to the bears. That is indeed what happened. With sharp declines this week, SPY, IWM and QQQQ failed at important resistance zones. The discrepancy... READ MORE
The S&P 500 ETF (SPY) gapped down again on the open, but managed to bounce and close well above its open to form a hollow candlestick. Even so, the ETF closed below its prior close to color the candlestick red. Nevertheless, SPY remains below its support break at... READ MORE
Stocks were down sharply with a broad based decline on Wednesday, but there were a few stocks swimming against the tide. The S&P Sector Market Carpet provides an easy means to visual scan for green stocks in a sea of red. Carefusion (CFN), Macy's (M), Western... READ MORE
With a gap up, tight consolidation and gap down, the S&P 500 ETF (SPY) formed an island reversal over the last two weeks. It all started with the gap and close above 112 on August 2nd. The ETF traded between 111 and 113 the next six days and... READ MORE
With a gap up eight days ago and a gap down on Wednesday, the Industrials SPDR (XLI) formed an island reversal. Notice how the ETF gapped above 30.5 and largely held above this level for seven days. That ended with a large gap down that signals a reversal. MACD... READ MORE
Even though stocks bounced after the Fed announcement, S&P futures are down sharply in pre-market trading today. European and Asian stocks are also lower this morning. The Euro is getting slammed (130.5) and this may signal a return to the risk-off trade. Earning season is passing, the... READ MORE
Apple (AAPL) continues to consolidation within a relatively narrow range. The stock has traded between 266 and 254.90 for the last 13 days. Falling volatility is confirmed with the Bollinger BandWidth indicator, which shows the bands at their tightest in over five months. The direction of the consolidation break... READ MORE
Don't fight the Fed. This Wall Street motto is as old as the Fed. Even if you doubt the Fed's ability to influence the long-term outcome, the Fed can still affect the short-term expectations. Quantitative easing (QE) is back on the table and this may keep... READ MORE
A classic tenet of technical analysis is that broken resistance turns into support (and visa versa). The Russell 2000 ETF (IWM) broke the April trendline and resistance from its mid July high with a surge above 64.5 in late July. This broken resistance zone (63.8-64.5) now turns... READ MORE
Despite a worse-than-expected jobs number, stocks managed to limit early losses and surge in the final hour of trading. Conspiracy theorists are calling this manipulation. Maybe. Maybe not. To be honest, nobody really knows. The best we can do is watch the price action and trade accordingly. Even if the... READ MORE
The intermarket picture shows a preference for the risk-on trade over the last five weeks. The next two PerfCharts show five intermarket ETFs over two distinct timeframes. The first extends from late April until late June, which is when stocks declined sharply. The second extends from early July to early... READ MORE