Despite a massive advance the last six weeks, the bulk of the evidence indicates that we are still in a bear market environment. The advance off the March low, while impressive on its own, still pales in comparison to the prior decline. The S&P 500 SPDR retraced around... READ MORE
The two most popular biotech ETFs are leading the market this month and making big statements. Before looking at these two, note that they are quite different. The Biotech ETF (IBB) is dominated by large-cap biotechs with the top ten holdings accounting for over 50%. The Biotech SPDR (XBI), on... READ MORE
With a surge over the last 18 days, the S&P 500 reclaimed the 50-day moving average for the first time since February 21st. The move is truly remarkable, but the index remains well below the falling 200-day SMA. Moreover, a 28.5% surge in 18 days recovered just... READ MORE
The S&P 500 went from a historic decline to a historic bounce to an above average drop. This key benchmark fell 33.9% in 23 days, surged 17.55% in three days and then dropped 5.25% the last four days. In fact, the index has experienced nine... READ MORE
Chartists looking to measure relative performance based on retracements can use the Stochastic Oscillator to quantify these bounces. Way back on March 1st, I posted an article showing how Chartists can quantify downside retracements using Williams %R. For upside retracements or bounces that retrace a portion of the prior decline,... READ MORE
The broad market environment is bearish and volatility remains high, even with stock alternatives, such as gold and bonds. This is hardly a conducive environment for trading or investing, but there are alternatives, such as a bear market project. This can be remodeling a room, finally clearing out the garage... READ MORE
The S&P 500 moved from a 52-week high to a 52-week low with lightening speed over the last three weeks. To capture the sharpness of this decline, I am showing a chart with the 3-week Rate-of-Change in the indicator window. At -18.78%, this is the deepest three... READ MORE
Support levels and bullish retracement zones are questionable, at best, in bear market environments. Why? Because the path of least resistance is down in a bear market. As such, the odds that a support level holds or a bullish retracement zone leads to a reversal are greatly reduced. The odds... READ MORE
Looking for an indicator to find stocks and ETFs that held up the best last week? Look no further. Today I will show how to use a classic indicator to quantify last week's decline and rank names by their retracements. In general, stocks bottomed in early October and... READ MORE
After falling for over a year, the Regional Bank ETF (KRE) finally got its mojo back in the fourth quarter of 2019 and broke out to new highs. The ETF then became overextended in mid December and fell back to the 200-day SMA here in February. A potentially bullish setup... READ MORE
Dow Theory applies the principle of confirmation to confirm primary trends. Charles Dow used the Dow Industrials and Dow Transports to confirm the primary trend for the broader market. The primary trend is up, and confirmed, when the Industrials and Transports both exceed their prior highs and record higher highs.... READ MORE
Amazon is by far the biggest component in the Consumer Discretionary SPDR and its recent breakout bodes well for the ETF. The new highs in XLY and AMZN this month, however, did not carry over to the Equal-weight Consumer Discretionary ETF (RCD). RCD removes the Amazon effect by treating all... READ MORE
There are three ETFs covering the defense and aerospace group and all three recorded new highs. Even though these ETFs cover the same industry group and have similar price charts, they are quite different when we look under the hood and one is seriously underperforming the other two. The Aerospace... READ MORE
Selling pressure was extremely broad in Friday with all sectors declining and more than ninety percent of stocks in the S&P 500, S&P MidCap 400 and S&P SmallCap 600 declining. While this kind of broad selling pressure creates a short-term oversold condition, it also... READ MORE
Signs of a correction were building for some time and it now appears that the long awaited corrective period is here. The S&P 500, in particular, is following the script from January 2018 quite closely. After a steady advance from October to December, signs of excess started appearing... READ MORE
The Russell 2000 ETF (IWM) broke out of a pennant formation last week and then fell sharply this week. This puts price back in the pennant and near its make or break level. Flags and pennants are short-term continuation patterns that form after a sharp move. Bullish versions represent the... READ MORE
The stock market started its latest run to infinity (and beyond) in mid August and the 20+ Yr Treasury Bond ETF (TLT) just happened to peak a week or so later. Stocks and bonds were largely on the same page from February to August as both moved higher. Correlation changed... READ MORE
Ten of the eleven sector SPDRs are positive over the last three months. The Real Estate SPDR (XLRE) is the only sector sporting a loss (~.75%), but I am not concerned with relative weakness because the price chart looks bullish overall. Note that XLRE was the leading sector in early... READ MORE
2019 was quite the year with many stocks moving sharply higher from January to July-August. In particular, several Technology stocks moved higher during this period and then corrected into October. We can see this pattern reflected in the Equal-Weight Technology ETF (RYT) as it advanced over 40% and then corrected... READ MORE
2019 was a year with lots of distractions, and yet the S&P 500 recorded 52-week highs in six of the last nine months. The index surged 17.7% the first four months and recorded its first 52-week high in late April. It then finished strong with a new... READ MORE
A theme is a fundamental trend that could influence a stock's price in the coming months, or even years. As powerful as themes seem, they are still secondary to price action. There are many forces driving price movements and we cannot be expected to know them all. In... READ MORE
The Gold SPDR (GLD) and the Gold Miners ETF (GDX) have been trending lower and lagging the broader market since September, but breadth indicators show signs of strength within the Gold Miners ETF. Today we will examine four breadth indicators and analyze the price chart for GDX. While breadth can... READ MORE
We are seeing breakouts and new highs galore in the stock market. Does this sound the all clear? Hardly. Investors waiting for the all clear will probably be waiting a long time. Moreover, the "all clear" could even mark the top, because that's just the way... READ MORE
Chartists looking for winning stocks should start with leading sectors and industry groups. Having a sector or industry tailwind can greatly improve the odds for a winning trade or investment. Programming note: There is a special announcement at the end of this commentary. Looking at the sector charts and sector... READ MORE
As noted in ChartWatchers this weekend, the Mobile Payments ETF (IPAY) came to life in November with a 7% gain, which was almost twice the gain in the S&P 500 SPDR (+3.62%). IPAY was lagging in September and October, but is now leading the market as the... READ MORE
Black Friday weekend is here and the holiday shopping season is just getting started. While I have no clue which retailers will be the big winners or losers this season, the mobile payments industry is likely to be a big winner. Mobile payments are expected to exceed $300 billion this... READ MORE
Several finance-related ETFs and stocks broke out with big moves from early October to early November. Many of these then stalled over the last two weeks and this rest could be the pause that refreshes. Today we will look at performance for the finance-related ETFs and the bull flags taking... READ MORE
The S&P 500 SPDR and Nasdaq 100 ETF recorded new all time highs this past week, while the S&P MidCap 400 SPDR hit a new 52-week high in November. Sounds bullish, but the S&P SmallCap 600 SPDR and Russell 2000 ETF are still well... READ MORE
The number of stocks making new highs has been a lagging link in the breadth indicators this year. While the S&P 500 trades at a new high, the number of new highs within the index has yet to exceed 100 and get back to the levels seen in... READ MORE
The character of the stock market changed over the last six to seven weeks as the market took on a more offensive tone. Don't get me wrong. The stock market was already in bull mode and the S&P 500 has been above its 200-day SMA since... READ MORE
The Russell 2000 ETF is finally showing signs of an uptrend with the first higher-low/higher-high sequence in six months. The chart below shows the Russell 1000 ETF (IWB), the Russell 2000 ETF (IWM) and the Russell Microcap ETF (IWC) to compare highs and lows. Chartists can use this technique... READ MORE
The new high parade continued this week with the S&P 500 SPDR and four sector SPDRs hitting new highs. The Technology SPDR (XLK), Industrials SPDR (XLI), Finance SPDR (XLF) and Materials SPDR (XLB) recorded new 52-week highs. The Healthcare SPDR (XLV) recorded a new high for 2019, but... READ MORE
The Nasdaq AD Line is not keeping pace with the Nasdaq Composite, but this is not bearish for the Nasdaq or the market as a whole. Note that the Nasdaq hit a new high in July and again on November 1st, even though the Nasdaq AD Line has been falling... READ MORE
The Biotech ETF (IBB) is making a bullish statement with recent developments in momentum, volume and trend. IBB is also outperforming its counter part, the Biotech SPDR (XBI), over the last two months. The chart below shows IBB surging around 10% from the early October low to the current high.... READ MORE
The market as a whole is not firing on all cylinders, but that is not really important. What, then, is important? We cannot expect a perfectly bullish stock market and rising tide that lifts all boats, as was the case in 2013 and 2017. Instead, we need to know which... READ MORE
Bullish continuation patterns are my favorite patterns when it comes to stocks and ETFs. As the name suggests, bullish continuation patterns, when confirmed, signal a continuation of the prior trend. Furthermore, because it is a "bullish" continuation, it means the prior trend was up and that trend is... READ MORE
The Industrials SPDR (XLI) and Finance SPDR (XLF) are two of the big six sectors in the S&P 500 and both are moving in the right direction: up. The Industrials sector accounts for 9.32% of the S&P 500, while the Finance sector accounts for 13.... READ MORE
While the S&P 500 and large-caps hold up well, small-caps and mid-caps continue to trade mixed. This suggest that the average stock is trading mixed, some up and some down. Even though we are not in a bear market environment, stock picking is challenging right now and we... READ MORE
The lack of new highs may seem like a concern, but one cannot talk about new highs without also looking at new lows because there are two sides to the story. The S&P 500 is within 2% of an all time high and there were just 28 new... READ MORE
The S&P 500 SPDR (SPY) hit a new high in July and then moved into a trading range the last few months. Momentum turned down during this trading range and this is perfectly normal during a consolidation. Today will look at a weekly chart pattern taking shape and... READ MORE