Intermarket highlights include: -Gold continues to lead the intermarket group -Gold is looking frothy on the daily chart -Look for a break above 76 to show strength in the Dollar. -Oil remains with extended flag consolidation -The long bond broke resistance with a gap-surge - Click here for intermarket chart... READ MORE
JP Morgan Chase (JPM) is the biggest holding (12.08%) in the Financials SPDR (XLF). As with XLF, JPM is showing relative weakness as it trades well below its October high. The stock is currently testing support from the triangle trendline extending up from the October low. Trading has been... READ MORE
With another gap-surge on Monday, SPY has gapped up the last four Mondays (November 4, 9, 16 and 23). The first three gaps were part of an uptrend, but the fourth occurred within a trading range. Also notice that SPY gapped up-down-up over the last six trading days. Talk about... READ MORE
I featured the 3-month T-Bill Rate ($IRX) near zero last Wednesday and Mark Hulbert wrote about this phenomenon in is commentary for Tuesday. Based on my analysis, low short-term rates reflect Fed policy and put downward pressure on the Dollar. Chicago Fed President Evans suggested no-change in Fed policy until... READ MORE
While the Dow and S&P 500 moved to new reaction highs in November, the Financials SPDR (XLF) remains well below its October high. XLF is clearly not keeping pace with the broader market. Such relative weakness can foreshadow absolute weakness and a potential break down. XLF surged above... READ MORE
Even though the S&P 500 is up sharply over the last four weeks, Wells Fargo (WFC) is just flat and shows relative weakness. After a surge the first few days of November, WFC traded flat with a small triangle. Watch this neutral pattern for clues on the future.... READ MORE
With a little weakness on Friday, SPY broke below flag support on the 30-minute chart and MACD(5,35,5) moved below its signal line on the daily chart. First, let's look at the daily chart. For the fifth time since June, MACD formed a bearish divergence and... READ MORE
The Dow has been moving higher the last three months with surges early in the month and pullbacks later in the month. Notice how the Dow bottomed in early September, early October and early November. Also notice how the Dow peaked in mid September and mid October. Here we are... READ MORE
The Healthcare SPDR (XLV) broke above its October high two weeks ago and continued above 30 this week. Even though stocks were weak across the board on Thursday, healthcare managed to show relative strength with a smaller loss. Eight of the nine sectors were down in early trading Friday, but... READ MORE
-Performance anxiety and seasonality -The split-month pattern in SPY -Bear flags on the 30-minute charts -Medium-term Evidence Remains Bullish -Breadth is mixed overall -Bullish% for consumer discretionary sector lags -VIX forms inverse head-and-shoulders -SPY momentum remains bullish -Small-caps continue to lag large-caps -Short-term rates hit new lows again -TLT breaks... READ MORE
Tops are complicated beasts that usually take time to evolve. Bottoms, on the other hand, form quicker and often feature some sort of quick "V" reversal. Stocks are well off their March lows after a powerful rally the last nine months. The Dow, S&P 500 and... READ MORE
The warnings signs continue, but the bulk of the medium-term evidence remains bullish. On the negative side, breadth has been deteriorating the last few weeks. Small-caps and the finance sector have been relatively week since October. Bonds surged this week in what could be a flight to quality as we... READ MORE
-Nasdaq AD Line forms bear flag and hits resistance -Nasdaq AD Volume failed to confirm new reaction high in the Nasdaq -Nasdaq Net New Highs were weaker in November, but still positive overall -NYSE AD Line bounced off support and remains in bull mode -NYSE AD Volume line failed to... READ MORE
There is an interesting pattern taking shape on the daily charts of the major index ETFs. In September and October, notice how SPY advanced in the first half of the month and fell in the second half of the month. This is also the case for DIA, IWM and QQQQ.... READ MORE
Stocks gapped down and pretty much stayed down on Thursday. After gapping up on Monday, SPY traded flat for three days and then gapped down on Thursday. A little consolidation after Monday's gap is normal, but giving it all back with such a sharp decline is not normal... READ MORE
With a gap up on Monday and a gap down on Thursday morning, the S&P 400 MidCap ETF (MDY) has an island reversal working on the 30-minute chart. There were no trades around 127.6, which creates a floating island around 128. Even though this gap is negative,... READ MORE
SPY gapped up and moved above its October high on Monday to affirm the medium-term uptrend with a higher high. The gap is holding as SPY trades comfortably above 110. In addition, the Stochastic Oscillator remains above 80 for the second week. This makes SPY both overbought and bullish. It... READ MORE
Regions Financial (RF) is showing signs of life with a high-volume bounce off the 200-day simple moving average and a key retracement. Notice that the Sep-Nov decline retraced a Fibonacci 62% of the Jul-Sep advance. The stock firmed around 4.75 in early November and surged over the last three... READ MORE
The S&P 500 ETF (SPY) remains in a medium-term uptrend as it approaches the upper trendline of the rising channel. This trendline extends to around 112 this week and SPY could hit this level before starting a downswing. At this point, I consider SPY too strong to entertain... READ MORE
With the advance above 100, the Dow Diamonds (DIA) entered the 50-62% retracement zone. Such retracements can be measured using the Fibonacci Retracements Tool on Sharpcharts. These zones can mark resistance areas and price action merits a close watch. Click this chart for details.... READ MORE
-SPY Nears Channel Resistance -Regional banks and the finance sector -US Bancorp (USB) hits momentum-of-truth -A bearish engulfing for Limited (LTD) -Xerox (XRX) consolidates after surge -Ciena (CIEN) surges on good volume -Fluor (FLR) bounces off key retracement - Click here for the video page... READ MORE
The S&P 500 ETF (SPY) gapped up and closed strong to forge a higher high on Monday. The ETF has been channeling higher since August with a series of higher highs and higher lows. While each higher high affirms the medium-term uptrend, notice that SPY pulled back after... READ MORE
The Regional Bank SPDR (KRE) was a boon to the market in late July and early August, but under performed the market from early August to mid November. In contrast, the Financials SPDR (XLF) performed in line with the market as it went on to new highs in September and... READ MORE
Even though Fluor has been trending lower since the August high, the decline looks like a correction after the April-August advance. First, the advance was big and some sort of correction or pullback can be expected. Second, notice that the decline retraced 62% of the prior advance and a falling... READ MORE
Ciena is showing strength with a high volume wedge breakout. The stock surged from July to September and then corrected with a falling wedge the last two months. Sorry, no prizes for guessing how much this wedge retraced. After finding support near broken resistance, the stock broke the wedge trendline... READ MORE
After a big gap down in late September, Xerox established support around 7.25 and consolidated the last seven weeks. Within this consolidation, the stock surged in early November and then formed a flat flag. I am watching this pattern for clues on the next move. A break above flag... READ MORE
I featured Limited (LTD) two weeks ago with a small pennant, but the stock never broke pennant support for confirmation. Even though LTD edged higher, it looks like a bearish flag is now taking shape. The stock gapped down in late October and this gap zone acts as resistance. A... READ MORE
US Bancorp (USB) broke triangle resistance in mid October and broken resistance turned into support around 23. Even though the breakout is still holding, relative weakness in November is a concern here. SPY is up over 7% this month, but USB is down slightly. Moreover, the stock declined with pretty... READ MORE
Friday's mailbag answered questions on the Aroon oscillator, which is a trend identification indicator. Basically, a strong uptrend exists when the oscillator is above +50 and a strong downtrend exists when the oscillator is below -50. Even with the market gains of the last few weeks, I was... READ MORE
-Gold remains the strongest of the five intermarket securities -The Dollar is at it again with a RSI divergence and harami on Thur-Friday -Broken resistance around 1070 turns into first support for gold -Oil formed a bull flag over the last few weeks -Bonds continue to hold support - Click... READ MORE
Despite a gain for the week, overall price action for the S&P 500 ETF (SPY) was indecisive last week. SPY surged Monday, stalled for two days, declined sharply on Thursday and stalled on Friday. For the week, the ETF formed a long white candlestick, a long black candlestick... READ MORE
Year-to-date, the WT Brazilian Real Fund (BZF) and the CS Australian Dollar Trust (FXA) are by far the top performing currency ETFs. Of these 10 currency ETFs, only the DB Dollar Bullish ETF (UUP) is in negative territory. Even the CS Japanese Yen Trust (FXY) climbed back into positive territory... READ MORE
-Short-term RSI signal for SPY -Medium-term evidence remains bullish -AD Volume Lines fall short -Net New Highs diminish -Small-caps lag -Finance sector lags -VIX nears October lows -Short-term rates hit new low -Wave 4 advance remains in place. - Click here for the video page... READ MORE
Despite some warning signs, the bulk of the medium-term evidence remains bullish for stocks. Only three indicators are in bear mode. The AD Volume Lines broke support in late October, the McClellan Oscillators show deteriorating breadth, small-caps show relative weakness and the finance sector is relatively weak. The AD Lines... READ MORE
Nothing has changed regarding my interpretation of the Elliott Wave counts for the Nasdaq and S&P 500. Both indices are in Wave 4 advances or a 5 Wave decline. The Wave 4 target zone for the S&P 500 is 1080-1150, while the target zone for the... READ MORE
There are some potential warning signs in the breadth indicators. First, the Nasdaq AD Volume Line and the NYSE AD Volume Line both bounced, but remain well below their October highs. Lower highs could be forming. Second, October Net New Highs were above +200 for the Nasdaq and above +400... READ MORE
After a sharp advance, I noted how doji can sometimes foreshadow a reversal. Doji signal indecision as the bulls and bears battle it out for control. What happens after the doji produces the winner. With yesterday's decline, one could argue that the bears now have the upper hand.... READ MORE
With the surge over the last 1-2 weeks, the NY Composite and the Nasdaq are both trading back near their October highs. However, the Nasdaq AD Line remains well below its October high and shows some relative weakness. The NYSE AD Line is also below its October highs, but still... READ MORE
There is no change in the SPY analysis. Stocks stalled over the last two days with SPY forming two doji. These signal indecision and can sometimes foreshadow a short-term reversal. At this point, I consider this indecision as a rest within the short-term and medium-term uptrends. Medium-term support remains at... READ MORE
Cisco (CSCO) led the market higher with a big move above 24 last week. While the S&P 500 continued higher the last three days, Cisco stalled with a falling flag taking shape. Bullish flags slope down and form after a sharp advance. A break above 24 would signal... READ MORE