S&P 500 TESTS OLD HIGH... A lot of attention is being paid to the S&P 500 which is in the process of testing its record high. That can be seen in Chart 1. In addition, its 14-day RSI line is in a very overbought condition. That... READ MORE
SPX RALLY BROADENS OUT... Two inflation reports this week showed consumer and producer price inflation cooling off. Then on Wednesday afternoon the Fed suggested that it may be ending its rate hikes, and might even lower rates three times in the coming year. That combination resulted in a big drop... READ MORE
SECTOR SPDRS IN UPTRENDS... The number of sectors in rally mode has broadened out which is a positive sign for stocks. You may recall concerns in recent months that the market rally was too concentrated in large growth stocks and lacked market breadth. That's no longer the case.... READ MORE
PEAK IN OIL LED TO PEAK IN BOND YIELDS... Previous messages have shown a drop in bond yields starting a month ago coinciding with the fourth quarter rally in stocks. But there's another element in that story which is a sharp drop in the price of oil. That&... READ MORE
NASDAQ CLEARS OCTOBER HIGH.. .After spending the week in a holding pattern, stocks are ending the week on a strong note and appear poised to continue their fourth quarter uptrend. Chart 1 shows the S&P 500 testing its mid-October high and nearing an upside breakout. Odds for an... READ MORE
TEN YEAR BOND YIELD MEETS RESISTANCE AT 5%... The 10-Year Treasury yield backed off sharply this week from long-term resistance near 5.00%. The upper box in Chart 1 also shows its 14-day RSI line peaking from overbought territory over 70 and falling to the lowest level in several months.... READ MORE
S&P 500 BREAKS 200-DAY LINE...Last week's message showed the S&P 500 testing important support lines which included its 200-day moving average. Those support levels are being broken to the downside. The daily bars in Chart 1 show the SPX falling below its 200-... READ MORE
NEARLY AT 5%... Previous messages have mentioned 5% as the next major upside target for the 10-Year Treasury yield. The TNX hit 4.99% today. Chart 1 shows the next potential target at 5.25% which was the closing high formed sixteen years ago. That previous peak may provide some... READ MORE
S$P 500 TESTS TRENDLINE SUPPORT AND 200-DAY AVERAGE... Last week's message suggested that the S&P 500 was headed for a test of its 200-day moving average (red line) and a rising trendline drawn under its October/March lows. Chart 1 shows that test taking place... READ MORE
SEPTEMBER SECTOR RANKING... September has lived up to its reputation of being the year's weakest month. All major stock indexes have fallen during the month. And so have most S&P sectors -- except for one. Chart 1 shows energy being the only sector to end the... READ MORE
TEN-YEAR BOND YIELD HITS 16-YEAR HIGH...Recent market messages have been focusing on the upturn in energy prices which threatened to boost inflation pressures and put upward pressure on bond yields. Those same messages have shown the 10-year Treasury yield nearing an upside breakout. That breakout took place this week... READ MORE
RISING OIL PRICES HURT TRANSPORTS... Transportation stocks are one of the groups most sensitive to the direction of energy prices. That makes sense since fuel is so important to their bottom line. And not surprisingly, they've been one of the market's weakest groups over the last... READ MORE
ENERGY BREAKOUTS... Several previous messages have talked about upside breakouts taking place in energy stocks. And that trend has only gotten stronger both in the stocks and the commodity. The upper box in Chart 1 shows the price of WTIC crude oil rising to the highest level since last November.... READ MORE
ADVANCE-DECLINE LINE BOUNCING... A glance at various measures of market breadth offers good and bad news. All of them are lagging behind the S&P 500 which is a caution sign. The good news is that they're bouncing off potential support lines. Chart 1 compares the S&... READ MORE
TEN-YEAR YIELD TESTING OCTOBER HIGH... Last week's message suggested that rising bond yields (along with rising energy prices) was one of the factors that could push an overbought stock market into a downside pullback. More on that shortly. The big story of the week, however, was how much... READ MORE
RISING ENERGY PRICES MAY BOOST YIELDS... This week's inflation reports sent a mixed message. July's CPI came in lower while July's PPI came in higher. Bond yields, however, gained more ground. The green bars in the upper box in Chart 1 show the 10-Year... READ MORE
UPSIDE ENERGY BREAKOUTS...Last week's message listed energy as the strongest market sector over the last week and month. That positive trend continued this past week with some upside breakouts taking place. Chart 1 shows the United States Oil Fund (USO) trading above its April high. WTIC hasn&... READ MORE
NYSE ADVANCE-DECLINE LINE BREAKS OUT... Stocks gained more ground this week to continue their uptrend. What's helping keep the rally going is the fact that more individual stocks are joining the uptrend. Chart 1 shows the NYSE Advance-Decline line rising above several previous peaks to the reach the... READ MORE
MONEY ROTATES INTO HEALTHCARE... One of the most encouraging developments over the last month has been the rotation into formerly lagging sectors like industrials, financials, and materials. That rotation also includes this week's upside breakout in the Dow Industrials to the highest level in more than a year.... READ MORE
ENERGY SECTOR LOOKS OVERSOLD... Energy stocks have been one of the year's weakest sectors. The daily bars in Chart 1 show the Energy SPDR (XLE) trading sideways since March and looking oversold. The XLE would need to clear its red 200-day average and falling trendline to signal a... READ MORE
TRANSPORTS GAIN, UTILITIES LOSE... Chart 1 shows transportation stocks rising while utilities are falling. The significance of the chart is that it suggests that investors are turning more positive. That's because stronger transports suggest a stronger economy while falling utilities show that investors are turning less defensive. Airlines... READ MORE
MORE BROADENING OUT...Various measure of market breadth continue to improve. That includes the number of stocks moving back above their moving average lines. Chart 1 shows the Percent of S&P 500 stocks trading above their 200-day averages rising to the highest level in four months. As a... READ MORE
S&P 500 TESTS AUGUST HIGH...Chart 1 shows the S&P 500 Index in the process of testing important overhead resistance at its August high (flat line). A close above that barrier would be a positive sign. The SPX has now gained 20% from its October low.... READ MORE
DOW PLAYS CATCH-UP... A strong May jobs report and the passing of the debt ceiling bill have combined to give a big boost to stocks at week's end. The rally has been enough to push the Nasdaq to a new 52-week high and a ten-month high in the... READ MORE
TALE OF TWO MARKETS... Previous messages have pointed out the growing gap between rising technology stocks and the rest of the market. That gap widened even further this week. Technology was once again the week's strongest sector thanks to surging chip stocks. The weekly bars in Chart 1... READ MORE
BIG TECH STOCKS LEAD MARKET HIGHER... The largest stocks in the technology sector saw big gains during the week. That pushed the Invesco QQQ Trust to the highest level in more than a year as shown by the weekly bars in Chart 1. Technology and Communication Services SPDRS were the... READ MORE
BAD BREADTH CONTINUES... Several recent messages have demonstrated poor stock market breadth. Unfortunately, that negative situation hasn't shown any improvement. One of the charts used to demonstrate that negative situation is repeated below. Chart 1 compares the S&P 500 Large Cap Index (black bars) to the... READ MORE
BONDS YIELDS VS. THE NASDAQ...The direction of bond yields has had an impact on various intermarket relationships. One of the them is the Nasdaq market. The main point of Chart 1 is to show that falling bond yields have been good for the Nasdaq market so far this year.... READ MORE
MARKET ENDS WEEK ON A STRONG NOTE... Stocks gained more ground this past week with major indexes moving closer to overhead resistance levels. The market is being led higher by communication and technology stocks. As a result, the Nasdaq 100 touched a new high for the year and is leading... READ MORE
MORE NEGATIVE DIVERGENCES... My message from a couple of weeks ago showed various measures of market breadth failing to keep up with the S&P 500 which suggested that the current stock rally was on weak technical footing. Unfortunately, that situation hasn't improved. A number of breath... READ MORE
GOLD RALLY STALLS AT OVERHEAD RESISTANCE... Gold has risen to the highest level in a year and has been attracting a lot of attention lately. Gold is traditionally viewed as a safe haven asset when investors are concerned about the state of the economy in an inflationary environment. The weekly... READ MORE
EQUAL WEIGHTED SPX LAGS BEHIND...Stocks were little changed on the shortened trading week and have maintained their intermediate uptrend. The black bars in Chart 1 show the S&P 500 having reached the highest level in two months. The SPX also remains above moving average lines and may... READ MORE
MAJOR STOCK INDEXES HAVE A STRONG WEEK...Although the stock market's long-term trend may still be in doubt, stocks are ending the quarter on a strong note. Starting with the weakest, Chart 1 shows the Dow Industrials ending the quarter back above its 200-day moving average and in... READ MORE
BANK INDEX WEIGHS ON STOCKS...Despite day to day volatility, major stock indexes are trying to hold onto small gains for the week and are trying to hold underlying support levels. The black bars in Chart 1 show the S&P 500 bouncing last week off potential support at... READ MORE
S&P 500 STABILIZES NEAR DECEMBER LOW...A short-term oversold condition helps support stocks. The daily bars in Chart 1 show the S&P 500 bouncing off potential chart support at its December low. In addition, its 9-day RSI line in the upper box is bouncing off its... READ MORE
BANK INDEX COLLAPSES... A plunge in bank stocks this week has inflicted heavy technical damage on that group and is weighing heavily on the rest of the market. The weekly bars in Chart 1 show the KBW Bank Index losing -16% on the week and falling to the lowest level... READ MORE
STOCK INDEXES HOLD 200-DAY LINES...After a weak month of February, major stock indexes are finally attracting some new buying. More importantly, this week's rebound is happening at some important moving average lines. Chart 1 shows the Dow Industrials bouncing off potential chart support along its late December... READ MORE
DOW FAILS TEST OF AUGUST PEAK... The Dow Industrials led the three-month rally from their October low; and may be now leading the market lower. Chart 1 shows the Dow failing to clear a major resistance barrier at its August high and now falling back to the lowest level of... READ MORE
TEN-YEAR YIELD TESTS 3.90%... Bond yields climbed this week on two reports showing that inflation gained during January. Chart 1 shows the 10-Year Treasury yield testing some resistance at 3.90% formed at the end of December. A close above that level would put the TNX at the highest... READ MORE
BOND YIELDS ARE CLIMBING... Last week's message showed the 10-Year Treasury yield bouncing off its 200-day moving average suggesting that a rebound in yields might be starting. Chart 1 shows the TNX climbing above its 50-day moving average and a falling trendline extending back to its October high.... READ MORE