The major index ETFs are nearing their moment-of-truth as the smaller uptrends start to challenge the bigger downtrends. I am still assuming that the August breakdowns signaled the start of a bigger downtrend. While I do not know how long this downtrend will last, I have yet to get a... READ MORE
Before looking at some charts to establish the bigger trend, I would like to philosophize a little on the analysis process and my approach. I use basic chart analysis and some simple trend-following indicators to define the trend and trade accordingly. My main goal is to be as OBJECTIVE as... READ MORE
Monday's Gaps Hold the First Key I am still working under the assumption that bigger trend is down after the August break down. Furthermore, SPY and QQQ are in the midst of counter trend moves denoted by a rising channel. The channel lines are based on the closing... READ MORE
Monster Beverage (MNST) did not partake in the early October surge and a key volume indicator suggests that distribution is underway. Let's start with the price chart. MNST fell sharply in August and then firmed just above the rising 200-day moving average in September. Volatility contracted as the... READ MORE
Overall, the major index ETFs remain in no man's land. Put another way, the market is between a rock (bigger downtrend) and a hard place (smaller uptrend). The bigger trend turned down with the August breakdown and broken resistance represents the rock around 2050. Short-term, the S&... READ MORE
Welcome to No Man's Land After months of dull trading, the stock market turned into Thrillsville in late August and volatility has continued into early October. This volatility is reminiscent of the periods from June to August 2010 and from early August to early October 2011. It took... READ MORE
Stock market declines are good because they expose the weak hands and highlight potentially strong stocks. Stocks that hold up during a broad market decline show relative strength and this could lead to outperformance when the market turns up again. Xilinx (XLNX) is one such stock because it held up... READ MORE
Note that I will post a video around 10AM ET. Volatility is clearly heating up as the S&P 500 completed its fifth 3+ percent swing since the August closing low. That is almost one 3+ percent swing per week (based on closing prices). With a 3.7% surge... READ MORE
The Oil & Gas Equip & Services SPDR (XES) perked up on Friday with a massive engulfing pattern on high volume. Combined with a bullish failure swing in RSI, the ETF could be setting up for a tradable low. Created by Welles Wilder, the Relative Strength Index (RSI) is a... READ MORE
Note that I will add a video around 11AM ET. Stock futures were higher before the employment report and then moved sharply lower after non-farm payrolls came in below expectations. Bonds are moving higher and the 10-YR Treasury Yield ($TNX) fell below 2%. The decline in stocks and rise in... READ MORE
Between a Setup and a Signal Note that I will post a video around 10AM ET. Trends are the driving force, signals are the exception and no-man's land is the norm. What the heck does that mean? First, the bigger trend is the driving force in my trading... READ MORE
Corn is showing signs of firming near the June lows and a possible wave 2 could be ending for the Corn Trust ETF (CORN). I will first start with December Corn Futures (^CZ15) because this is the most widely traded instrument for corn. Note that StockCharts provides end-of-day (EOD) data... READ MORE
The medium-term and short-term trends for the major index ETFs are down, but there are some stocks holding up well over the last two months and I am highlighting ten today. The charts below extend six months with the PPOs in the first indicator window and the price relative in... READ MORE
Cash Outperforms Defensive Sectors Correlations rise when the major stock indices are in downtrends. In addition, the deeper and sharper the decline, the higher the positive correlation among stocks. This means there are few places to hide when the stock market turns down. Healthcare, consumer staples and utilities are traditionally... READ MORE
The biotech ETFs have gone from leaders to laggards as the StockCharts Technical Rank (SCTR) plunged double-digits over the past week. The image below shows the ETFs with the biggest decline in their SCTR over the past week. You can set the time period using the drop down at the... READ MORE
Bigger Trend and Breadth Remain Bearish Programming note: I will add a video to this commentary by 10AM ET. Also note that I will not be doing a webinar on Tuesday, but will post a commentary. There is no change in the medium-term trends and indicators for the major index... READ MORE
The next charts show mostly stocks in uptrends with recent breakouts. For example, AMZN broke out on September 8th and this breakout is holding. The ability to hold a breakout in a weak market shows both absolute and relative strength. There are two setups for stocks that are in downtrends... READ MORE
Using Volatility-Adjusted Channels Note that I will be making a second post today with some individual stock charts (AMZN, AAPL, FB, NFLX, PANW, TASR, TSLA, UA, XOM and more). If you would like to receive email notifications when I post, check out the "yes" button at the bottom... READ MORE
Medium-term (MT), the major index ETFs are in downtrends after the August support breaks. In addition, the PPO (20,120,1) and PPO (10,60,1) are in negative territory to confirm these downtrends. Short-term (ST), the major index ETFs are mixed. IWM and SPY broke down this week and... READ MORE
In addition to this successful ad campaign, Aetna sports a bullish looking chart that argues for higher prices. First note that it has been a tough month for stocks with the S&P 500 down around 1.5% month-to-date. Aetna, in contrast, is holding up rather well and up... READ MORE
With the Fed noise behind us, for the most part at least, we can now focus on some untainted price action to define trends in the stock market. I view this week as important because there is less noise and chartists should watch for a decisive move - one way... READ MORE
There are lots of technology-consumer companies out there, but few are bigger than the big five: Apple, Amazon, Facebook, Google and Microsoft. While I am not sure if it is a zero-sum game for these behemoths, two are emerging as the leaders over the last few weeks. The SharpChart below... READ MORE
Wedges are Still Rising - Despite the Noise The stock market has certainly seen its fair share of noise in September. This noise includes the usual chatter from the talking heads and the Fed, as well as some volatile price action. Over the last 13 trading days, SPY gapped down... READ MORE
The S&P 500 SPDR (SPY) and the 7-10 YR T-Bond ETF (IEF) are going their separate ways as opposing wedges takes shape and IEF outperforms SPY (bonds outperform stocks). First, note that I am using close-only price charts to filter out some of the noise few weeks. This... READ MORE
The S&P 500 SPDR (SPY) and the 7-10 YR T-Bond ETF (IEF) are going their separate ways as opposing wedges takes shape and IEF outperforms SPY (bonds outperform stocks). First, note that I am using close-only price charts to filter out some of the noise few weeks. This... READ MORE
Medium-term Evidence Remains Bearish Video will be posted around 11AM ET. The bulk of the medium-term evidence remains bearish for the stock market as a whole. I noted that a bullish breadth thrust occurred on Thursday. This thrust, however, was not confirmed by other breadth indicators - namely High-Low Percent.... READ MORE
Large-Techs and Mid-caps Lead in September The September bounce is shaping up rather nicely with the Nasdaq 100 and the S&P MidCap 400 leading the major indices. The PerfChart below shows the month-to-date performance for eight stock indices. The Nasdaq 100 is the clear leader with a 2.... READ MORE
The weekly chart for United Airlines (UAL) is looking bullish as the stock firms in a key retracement zone and weekly MACD turns up. The green text on the chart marks five technical features over the last 15 months. First, the stock broke out to new highs in October 2014.... READ MORE
The major index ETFs remain in medium-term downtrends and short-term uptrends. Well, the short-term uptrend in SPY is up for debate because a triangle is taking shape. Nevertheless, SPY, QQQ and IWM gapped up last Tuesday and these gaps held for five days. We saw an intraday reversal on Wednesday... READ MORE
Star Wars fans may remember that quote from Darth Vader in Star Wars Episode IV (A New Hope). In any case, it came to mind when looking at the chart for Hasbro, which holds the merchandising rights for Star Wars toys. I see three reasons to be bullish on the... READ MORE
There is clearly a bearish headwind working against stocks right now. The major stock indices are in downtrends after their August support breaks, the key breadth indicators are bearish and all nine sectors are in downtrends. The image below shows the major indexes and their key breadth indicators. The boxes... READ MORE
Bullish Breadth Thrust Falls Short Stocks surged on Wednesday's open, but quickly gave up these gains and declined into the close. Selling pressure was quite broad as AD Percent for the S&P 500 exceeded -80%. Small-caps held up better as S&P 600 AD Percent... READ MORE
StockCharts users can create intraday P&F charts to shorten their time horizon and identify key levels to watch. The chart below is a 60-minute P&F chart with 10 points per box and a classic 3-box reversal. After plunging to 3790 in mid August, the Nasdaq 100... READ MORE
Breadth was exceptionally strong the last two weeks and the broad market indices are on the verge of a bullish breadth thrust. Despite a couple big down days last week, AD Percent for the major index ETFs put in four strong readings in the last nine trading days. Note that... READ MORE
Click here for the recording QQQ Shows Relative Strength as Pennant Takes Shape There are two narratives at work in the stock market and these are reflected on the charts for QQQ, SPY and IWM. First, we have a big support break in August and this break down is medium-term... READ MORE
Bonds are outperforming stocks as money flows into relative safety and shuns risk. Overall, relative strength in bonds reflects risk aversion in the financial markets. Relative strength in bonds also indicates that investors should prefer bonds over stocks right now. Like all market dynamics, it is subject to change, but... READ MORE
Oversold Bounces Fall Short The overall trend remains down for the major index ETFs (QQQ, SPY and IWM). Trading turned volatile with the mid August breakdowns, but the breakdowns remain and these are the dominant feature on most stock-related charts. Current volatility makes it hard to determine what will happen... READ MORE
What do VIX Extremes Tell Us? Even though it can be difficult to trade based on extremes, note that the volatility indices are at extremes that suggest plenty of fear and this could foreshadow a bounce. The first chart shows daily closing values for the S&P 500 Volatility... READ MORE
This is just a quick and dirty note regarding today's strength in airline stocks. The table below shows eight airline stocks, the Airline ETF (JETS) and the DJ US Airline Index ($DJUSAR). Notice that the StockCharts Technical Rank (SCTR) for two stocks is above 90 (JBLU and ALK)... READ MORE
Selling pressure was quite intense on Tuesday as some 497 stocks in the S&P 500 declined on the day. This means there were only three winners on the day: CableVision (CVC), American Airlines (AAL) and Sigma-Aldrich (SIAL), which is going to be acquired by Merck. Cablevision, which is... READ MORE