KEY TAKEAWAYS * Most stocks follow their underlying index or group. * Oversold conditions in long-term uptrends are opportunities. * Stocks can remain oversold so wait for an upward catalyst. The broad market and the group are big drivers for stock performance. Recently, the Nasdaq 100 ETF (QQQ) led the market lower with... READ MORE
KEY TAKEAWAYS * The long-term trend provides perspective and sets the trading bias. * The bias is bullish during long-term uptrends. * Breaks below the 50-day SMA are viewed a opportunities, not threats. After a big run this year, Nvidia (NVDA) fell over 15% from its high and broke its 50-day simple moving... READ MORE
KEY TAKEAWAYS * IJR broke out and a strong breakout should hold. * Broken resistance turns first support. * Small-caps are prone to extended trading ranges. Small-caps took the lead over the last two weeks with the S&P SmallCap 600 SPDR (IJR) surging over 10% in five days and hitting a... READ MORE
KEY TAKEAWAYS * Nasdaq 100 stocks account for over 30% of the S&P 500. * Nasdaq 100 stocks represent the risk appetite in the stock market. * Chartists can quantify the risk appetite using Nasdaq 100 specific breadth indicators. The Nasdaq 100 is a major driver in the stock market and... READ MORE
KEY TAKEAWAYS * Finding Emerging Leaders within Key GroupsChartists can find emerging leaders using price and the price relative. * Breakouts and higher highs on the price chart show absolute strength. * Upturns and breakouts in the price-relative show relative strength. The broader market is fairly mixed with one clear leader: technology. I... READ MORE
KEY TAKEAWAYS * Big breakouts are bullish, but sometimes traders miss the breakout. * A throwback is a decline back to the breakout zone, which turns support. * Throwbacks offer traders a second chance to partake in breakouts. Chinese stocks wet on a tear from mid April to mid May with the China... READ MORE
KEY TAKEAWAYS * Absolute momentum defines trend direction. * Relative momentum quantifies the strength of the uptrend. * Take together, these two form the basis for a Dual Momentum Rotation Strategy. As the name suggests, Dual Momentum Rotation Strategies focus on stocks that are in absolute and relative uptrends. This is a two-step... READ MORE
KEY TAKEAWAYS * Corrections within bigger uptrends are opportunities. * Chartists can identify corrections using retracements and patterns. * The pattern provides a clear resistance level to watch for a breakout. There is a certain ebb and flow in uptrends. Often we see some sort of stair step higher with big advances and... READ MORE
KEY TAKEAWAYS * Chartists can measure performance by comparing highs and lows * Defense groups are leading SPY because they hit new highs already. * XLU is looking frothy because it is over 13% above its 200-day SMA. After sharp declines into mid April, stocks rebounded over the last three weeks and the... READ MORE
KEY TAKEAWAYS * A key short-term breadth indicator became oversold in mid April. * Stocks are bouncing after this oversold reading. * Breadth, however, has yet to show a serious expansion in participation. Stocks fell sharply into late April and then rebounded over the last two weeks. SPY fell 5.34% from March... READ MORE
KEY TAKEAWAYS * Primary moves define the long-term trend * Secondary moves are corrections within bigger uptrends * Corrections provide opportunities to partake in the bigger uptrend The S&P 500 is down 5.5% this month and volatility is rearing its ugly head. This is a good time to get some... READ MORE
KEY TAKEAWAYS * Outsized Moves Can Jump Start Trends * Chartists can use ATR-SAR to Identify Outsized Moves * Housing and Retail are Leading Lower with Outsized Declines Trends often start with outsized moves. But how do we measure and identify such moves? Chartists can measure moves in Average True Range (ATR) terms... READ MORE
KEY TAKEAWAYS * Overbought is just another term for strong. Â RSI above 70 shows strong upside momentum, which his bullish. Â Stocks can become overbought (strong) and remain strong. Momentum and trend strategies are off to a roaring start here in 2024. More often than not, these strategies buy leading stocks that... READ MORE
The 200-day SMA is perhaps the most widely used long-term moving average. As its name implies, it is a simple indicator that chartists can use for trend-following and momentum strategies. For trend-following, we just need to know where prices stand relative to the 200-day SMA. For momentum, we need to... READ MORE
The 20+ Yr Treasury Bond ETF (TLT) failed again at the falling 40-week SMA and looks poised to resume its bigger downtrend. Keep in mind that bonds and yields move in the opposite direction. A resumption of the downtrend in TLT translates into a resumption of the uptrend in the... READ MORE
The Oil & Gas Equipment & Services ETF (XES) is showing strength here in March as it breaks back above its 40-week SMA. More importantly, the long-term trend is up and this week's breakout argues for a continuation of this uptrend. The chart below shows XES with a... READ MORE
As its name suggests, the ATR Trailing Stop is normally used to trail a stop-loss for a long position. It can also be used to identify an outsized decline that could reverse an uptrend. Today's example will show how to apply the ATR Trailing Stop on a breakout... READ MORE
Most stocks surged with the broader market in the fourth quarter of 2023. SPY and QQQ extended their advances in 2024, but some stocks did not partake and fell back. Even so, some of these stocks show signs of long-term trend reversals and their declines in 2024 look corrective. This... READ MORE
Chartists can improve their odds by focusing on stocks that are in long-term uptrends and showing upside leadership. This is similar to a dual-momentum approach, which was covered last week. Today's example will use the 40-week SMA to define the trend, a 52-week high to confirm upside leadership... READ MORE
The momentum phenomenon has been a fixture in the US equity markets for decades. There are two types of momentum to consider: absolute momentum and relative momentum. Absolute momentum refers to the underlying trend, up or down. Relative momentum quantifies the strength of the uptrend and compares it to other... READ MORE
Divergences reflect a disconnect between price and the indicator. A bearish divergence forms when price forges a higher high and the indicator fails to confirm this high. In the case presented below, we have the S&P 500 moving higher and fewer stocks making it back above their 50... READ MORE
Gold is not the most exciting asset at the moment, but it is in a long-term uptrend and perhaps the strongest commodity out there. There are also signs that the January decline is ending as RSI hits a momentum support zone and a bullish continuation pattern forms. Note that GLD... READ MORE
This week's analysis will stick with the multiple timeframe approach. Today we are featuring a biotech stock with a channel breakout on the weekly chart and a classic retracement on the daily chart. Moreover, a larger bullish reversal pattern could be forming on the daily chart. The weekly... READ MORE
Chartists looking to increase their odds should consider two timeframes for their analysis. The longer timeframe sets the strategic tone, while the shorter timeframe defines the trading tactics. Strategically, I am interested in stocks with long-term uptrends. Tactically, I am looking for bullish continuation patterns to trade after a correction.... READ MORE
Mean-reversion strategies typically buy stocks when they are oversold, which means catching the falling knife. These declines are often rather sharp, but the odds favor some sort of bounce after reaching an oversold extreme. While there are no guarantees, chartists can mitigate risk by insuring that the stock is still... READ MORE
Tech stocks were hit with selling pressure to start the year, but many are still in long-term trends and some are nearing support-reversal zones. In particular, Apple (AAPL) fell to a support-reversal zone and I am on alert for a bounce. Let's investigate. First, the long-term trend is... READ MORE
Stocks went on a tear the last seven weeks with Nasdaq 100 stocks leading the charge. The S&P MidCap 400 SPDR (MDY) and Russell 2000 ETF (IWM) gained more than QQQ over the last seven weeks, but QQQ is still the only major index ETF to exceed its... READ MORE
The S&P 500 SPDR (SPY) surged over 10% since late October and exceeded the upper Bollinger Band (125,1). This means price is more than 1 standard deviation above the 125-day SMA. Surely, this means SPY is overbought. But is this actually bearish? Historical evidence suggests that this... READ MORE
The percentage of stocks in long-term uptrends rebounded sharply in November and returned to the highs from late August and early September. This rebound is impressive, but the absolute levels are still not that inspiring. We need to see participation breakouts and higher participation levels to get the broad bull... READ MORE
StockCharts users can chart the Zweig Breadth Thrust for the S&P 1500 or any other index that has Advance-Decline Percent data. All we have to do its convert the Zweig Breadth Thrust levels to their equivalents using Advance-Decline Percent. The Zweig Breadth Thrust is based on percent advances... READ MORE
Today's report features the Zweig Breadth Thrust, which was developed by the late, and great, Marty Zweig. Zweig appeared regularly on Wall Street Week, contributed to Barrons, published The Zweig Forecast and wrote Winning on Wall Street in 1986. Among other things, his timeless book shows us how... READ MORE
The S&P 500 is battling the 200-day SMA with four crosses over the last eleven days. We are also seeing a rise in volatility as this market benchmark plunged 5.86% in nine days (18-27 October) and then surged 5.85% the last five days. With such conditions,... READ MORE
Correlations rise during bear markets. This means more stocks participate in broad market declines than broad market advances. In other words, the odds are stacked against us when picking stocks in bear markets. Traders are better off looking outside of the stock market for opportunities. The Perfchart below shows the... READ MORE
The Home Construction ETF (ITB) led the market the first seven months of the year, but fell on hard times the last two months and reversed its long-term uptrend. Today's report/video will look at the trend reversal in ITB using the RSI Trend Range indicator. We will... READ MORE
Today's report will compare charts and performance for the Semiconductor ETF (SOXX) and the Semiconductor SPDR (XSD). SOXX represents large-caps and is holding up. XSD represents the average semiconductor stock and it is not holding up. Broad weakness within the semiconductor group is likely to spread to large-cap... READ MORE
Despite a rough ride in September, the S&P 500 is still up 14% year-to-date and the Nasdaq 100 is up a whopping 40%. The gains here, however, do not tell the entire story because many stocks are struggling in 2023. In fact, around half of the stocks in... READ MORE
Chartists looking to get the jump on a bigger breakout can turn to the swings within a developing pattern. For example, a Symmetrical Triangle after an advance is a bullish continuation pattern. We can get the jump on a breakout by trading a downswing reversal within the pattern. Let'... READ MORE
QQQ remains well above the rising 200-day SMA, but clearly shifted from bullish to bearish over the last two months. Today's report/video will show this momentum shift and analyze the short-term continuation pattern taking shape. The chart below shows QQQ trading well above the rising 200-day SMA.... READ MORE
The pockets of strength are shrinking as more stocks succumb to selling pressure. The Nasdaq 100 is the strongest of the major indexes, while the Finance sector is one of the weakest sectors. Today's report will highlight two leaders within the Nasdaq 100 and two laggards within the... READ MORE
Stocks were hit hard the last two weeks with the S&P 500 SPDR (SPY) breaking below its August low. SPY also forged a lower high from July to August. Stocks and ETFs that held above their August lows are showing relative strength. With that in mind, the three... READ MORE