SOX BREAKS DECEMBER LOW... Earlier in the week I suggested that the fate of the Nasdaq market was tied to the Semiconductor (SOX) Index which was trying to bounce off support at its December low. Unfortunately, the Semiconductor Index took a turn for the worst today and pulled the Nasdaq... READ MORE
WEEKLY INDICATORS ARE NEGATIVE... The S&P 500 and the other major stock averages have enjoyed an oversold bounce this week. What's turning me more cautious on the market, however, is what's happening on the longer-term weekly and monthly charts. Chart 1 is a weekly... READ MORE
DOLLAR FALL PUSHES GOLD HIGHER... The dollar is falling sharply today against the Euro and the Japanese yen. That's pushing gold prices $4.40 higher to $411. Naturally, that's giving a boost to gold shares which are rising today. If today's gains hold, it... READ MORE
FEDEX, STANLEY WORKS, AND YAHOO JUMP... The three stocks shown below are helping lead another stock market bounce today. Chart 1 shows FedEx surging to a new three-month high on strong volume. The stock is safely back above its 50- and 200-day moving averages. That's giving a boost... READ MORE
BOND YIELDS DROP... To no one's surprise, the Fed left short-term rates unchanged today. It did, however, seem to soften its description of the economic recovery a bit. That may account for today's drop in long-term rates. Chart 1 shows the 10-year T-note yield closing at... READ MORE
DROP IN BOND YIELDS HURTS STOCKS... I wrote a column on Wednesday describing some similarities (although on a smaller scale) between the current market and the one in the spring of 2000. I was talking mainly about sector rotations out of technology into defensive groups like oil, consumer staples, utilities,... READ MORE
FOURTH ANNIVERSARY OF NASDAQ TOP... In my latest book on Intermarket Analysis, Chapter 7 discusses the sequence of sector rotations that normally take place at market tops. Although the magnitude of the current selling in stocks isn't the same as the market top four years ago, the current... READ MORE
NASDAQ BREAKS 2000 LEVEL... The Nasdaq Composite Index took a more serious turn for the worse today when it closed beneath the 2000 level for the first time this year. That level is important for two reasons. First, it represents the previous low hit a couple of weeks ago and... READ MORE
NASDAQ 100 QQQS FALLS HARD... The Nasdaq 100 was the day's worst performer and pulled the entire stock market down with it. Chart 1 shows the QQQs threatening the late February low near 36. That level also corresponds with the prior peaks formed during November and December. Any... READ MORE
SMALL CAPS ARE IN THE LEAD... Over the past week, the past month, and year-to-date, small caps have been the strongest market group measured by size. Mid-caps came in second over all three time spans -- while large caps came in last. Charts 1 and 2 show the S&... READ MORE
BLUE CHIP INDEXES REVERSE EARLY LOSSES... The stock market had a lot of bad news thrown at it today. Intel gave a weak quarterly report last evening. An extremely weak February jobs report this morning caused early selling of stocks. By day's end, however, the blue chip averages... READ MORE
BOND YIELDS PLUNGE TO EIGHT-MONTH LOW... This morning's weak February job report was a shocker. The number of new jobs came in at 21K versus expectations for 125K new jobs. As a result of that very weak report, the price on the 10-year T-note soared 50/32 and... READ MORE
SMALL CAP LEADERSHIP... After consolidating throughout the month of February, it now looks like several of the major stock indexes are getting ready to resume their uptrends. And that rally is being led by smaller stocks. Chart 1 shows the S&P Small Cap Index having already broken out... READ MORE
EURO FALLS BENEATH JANUARY LOW... Today's dollar rally pushed the Euro beneath its January trough to the lowest level since last December. That turns the "short-term" trend of the Euro down and the dollar trend up. The breakdown in the Euro caused a ripple effect in... READ MORE
FEBRUARY IS OVER... The month of February, with its historically poor performance, is over and the month of March has gotten off to a good start. The Dow gained nearly a hundred points today and is now closer to the top of its February trading range. The Nasdaq had a... READ MORE
RETAIL INDEX BREAKOUT... The S&P 500 Retailing Industry Group Index (plotted through Thursday) broke through its November high a couple of weeks ago and has been consolidating above that breakout point since then. That represents positive chart action. The relative strength line shows the retailing group starting to... READ MORE
EURO BREAKS 50-DAY LINE... The U.S. dollar, which has been stabilizing since the start of the new year, had another big gain today. Last week most of the dollar's gains came against the yen. This week the dollar is also gaining more ground on the Euro. Chart... READ MORE
GILLETTE BREAKS OUT OF MAJOR BASE... Gillette is one of the consumer staples that have been attracting new monies of late. The daily bars in Chart 1 show the stock hitting a new 52-week high today. It's relative strength line has been rising throughout most of February as... READ MORE
GOLD AND OIL STOCKS GAIN GROUND... Another drop in the dollar boosted gold prices by $5.50 today to $405. Once again the area around $400 has proved to be a stubborn support level. As a result, gold stocks had a strong day today. Chart 1 shows that the XAU... READ MORE
INTEL FALLS BELOW 30 -- NASDAQ TESTING 2000... Given its large size, today's breakdown in Intel is a big blow to the Nasdaq market. Chart 1 shows Intel falling under its December low near 30. That appears to have completed a "double top" formation that started... READ MORE
CPI INFLATION HIGHER THAN EXPECTED... January's CPI numbers on inflation came in higher than expected. Some of that was attributed to rising energy prices, but not all. Even the core inflation figure (ex food and energy) was higher than expected. At the end of last week the government... READ MORE
AMAT STOCK FAILS BADLY -- PULLS SOX LOWER... The sharply higher opening in Applied Materials this morning was the big news in a bouncing SOX Index and a higher Nasdaq opening. By day's end, things had turned ugly. Chart 1 shows AMAT closing lower after jumping all the... READ MORE
BIOTECH INDEX HITS NEW HIGH... During January the Biotech Index broke through the 500 barrier to turn its major trend higher. Its relative strength line, which had been dropping since last June, started rising again during November. That was part of a new rotation into the healthcare sector. The BTK... READ MORE
DOLLAR REBOUNDS OFF JANUARY LOW... Earlier today it looked like the U.S. Dollar was breaking its January low near 85. As chart 1 shows, however, the Dollar Index scored an upside reversal day. Part of the rebound may have been technical in nature. The daily RSI and MACD lines... READ MORE
TELECOM ETF RESUMING UPTREND... Cingular's purchase of AT&T Wireless lit a fire under the telecom sector today. Most of the wireless stocks in the group gained ground including AT&T Wireless, Sprint PCS, Nextel, Verizon, and Vodafone. The only two losers were Bellsouth and SBC.... READ MORE
DOW STALLS AT LONG-TERM RESISTANCE... On Wednesday, the Dow Industrials moved above the highs reached in the spring of 2002 at 10673. I stated at the time that the Dow needed to stay over that resistance barrier through week's end. It wasn't able to do that.... READ MORE
GOLDMAN SACHS LEADS BROKERS HIGHER... Brokerage stocks gained almost 4% today and helped lead the financial sector to a strong day's performance. Four brokers hit new 52-week highs including Bear Stearns, Goldman Sachs, Lehman Brothers, and Merrill Lynch. A brokerage upgrade of Goldman Sachs this morning pushed that... READ MORE
DOLLAR DROPS WITH BOND YIELDS... Mr. Greenspan's testimony before Congress which talked about the benefits of a weaker dollar pushed the U.S. dollar sharply lower today. As has been the case lately, bond yields fell along with the dollar (Chart 1). The drop in bond yields (or... READ MORE
OIL JUMPS MORE THAN A DOLLAR... Today's surprise OPEC production cut pushed crude oil prices over a dollar higher. Crude is within a dollar of its recent high at $35. Energy stocks have been the strongest part of the stock market this week. I've said before... READ MORE
OIL SERVICE INDEX IS CLIMBING... OPEC announced today it's plan to cut oil production by one million barrels a day starting April 1. The cut came as somewhat of a surprise and is boosting prices today. Crude oil futures prices are up 60 cents to 33.43. Interestingly,... READ MORE
AUSTRALIAN DOLLAR IS LINKED TO INDUSTRIAL METALS... An article on page C1 of the Wall Street Journal today was entitled "Dollar Suffers Most Against Currencies Tied to Commodities". I've discussed this before but it's worth repeating. First of all, a bull market in commodities... READ MORE
THE KEY IS INTEREST RATES... One news source today attribued the stock market rebound to the jobs picture "brightening". The drop in the dollar, however, was explained by "disappointing" job figures. While those reports seem to be in conflict, they're not too far from... READ MORE
OUT OF CYCLICALS AND INTO CONSUMER STAPLES... One of the best visual ways to spot group rotations is with ratio or relative strength analysis. There are two ways to do that. One is to compare each index to the S&P 500 and to see which ones are outperforming... READ MORE
CISCO AND CIENA TUMBLE... Cisco is the most actively-traded stock today and it's falling heavily. Chart 1 shows the tech bellwether gapping under its 50-day moving average in morning trading. In addtion, it's 14-day RSI line has fallen under 50 for the first time in three... READ MORE
JNJ LEADING DRUGS HIGHER... Yesterday we showed Pfizer achieveing a bullish breakout and helping to lead the drug group higher. It was pointed out that PFE was the most heavily-weighted stock in the DRG Index. The second biggest DRG stock is Johnson & Johnson. Chart 1 shows that drug leader... READ MORE
TOP SECTOR... Once again Healthcare was the day's top sector. Much of the gains were seen in biotech and drug groups, both of which gained more than 1% today. Two of the day's standout performers are charted below. Chart 1 shows Amgen surging to a four-month... READ MORE
DOLLAR IS AT BOTTOM OF TRADING CHANNEL AND OVERSOLD... Chart 1 shows a clearly defined trend channel, which are parallel trendlines drawn over the peaks and troughs of the Dollar's weekly bars. The Dollar Index is touching the lower trendline for only the third time in the last... READ MORE
SOX LEADING TECHS LOWER...ROTATION INTO CONSUMER STAPLES... The prospect for higher rates usually takes its biggest toll on market sectors with the highest p/e ratios. Those are usually the stocks that have led the market higher during the past year. Small caps and techs certainly qualify. That makes... READ MORE
HIGHER DOLLAR HURTS COMMODITIES... Yesterday's announcement by the Fed hinted at higher rates sooner rather than later. That raised rates all along the yield curve and has boosted the U.S. dollar. A bounce in an oversold dollar is causing heavy profit-taking in gold and commodities in general.... READ MORE
BOND YIELDS JUMP... The Fed took the bond and stock markets by surprise today by dropping their commitment to keeping short-rates low "for a considerable period of time". That was interpreted to mean that the Fed was a step closer to boosting rates. The result was predictable. Bond... READ MORE