SOX ALREADY ON SHORT-TERM SELL SIGNAL... Our midday update talked about the Semiconductor (SOX) index being on a short-term sell signal. We also showed that the weekly chart was starting to look toppy. Chart 1 shows the daily stochastics and MACD lines for the SOX having turned negative. The SOX... READ MORE
NOVELLUS BREAKS 200-DAY AVERAGE... Novellus is tumbling 11% today on very heavy volume. It's one of the Nasdaq's most active stocks. The daily chart shows the stock tumbling under its 200-day moving average. Not only had the stock already broken its 50-day average, but the 50-day... READ MORE
YIELDS BOUNCE BACK OVER 4%... The 10-Year T-note yield has been dropping since the start of January. Last week the yield fell below 4% for the first time in three months -- and slipped under its 200-day moving average. Although the short-term rate in trends has been down, Chart 1... READ MORE
TALE OF TWO STOCKS... For the second time in two days the Dow held up better than the Nasdaq. The Dow ended the day unchanged while the Nasdaq lost 23 points (1%). That discrepancy can be explained by looking at the divergent trends of two Dow stocks. Eastman Kodak soared... READ MORE
RATE-SENSITIVE STOCKS HAVE A GOOD DAY... In a bullish display of unanimity, all three Dow averages hit new 52-week highs today. On a percentage basis, the biggest gain was seen in the utilities. That have may have to do with the fact that rate-sensitive stocks were market leaders today. The... READ MORE
CRUDE OIL CLIMBS OVER $36... Crude oil prices jumped another $1.13 today to close above $36. Natural gas and heating oil prices gained 5% and 3% respectively. That gave a another big boost to the energy sector, which was the day's top performer. While the entire group... READ MORE
NASDAQ BREAKS THROUGH 2100 RESISTANCE... The Nasdaq Composite Index finally closed decisively above the 2100 level, which represented the price peak formed at the start of 2002. Chart 1 shows that the next upside objective is just above 2300. The ability to break through that resistance barrier is a sign... READ MORE
FINANCIALS JUMP ON STRONG VOLUME... News of the merger of JPM and Bank One may have contributed to today's jump in the financial sector because it was the day's top gainer. For the record, JPM lost ground on heavy volume while Bank One jumped on strong... READ MORE
APPLE AND INTEL BACK OFF FROM RECENT HIGHS... Yesterday afternoon we showed a chart of Intel backing off from resistance along its November/December highs as it headed into an important earnings reports. The report was good, but the stock is still selling off. The same thing is happening with... READ MORE
INDUSTRIALS BOUNCE OFF 20-DAY AVERAGE... The modest Dow pullback has found support at its 20-day moving average, which is usually the first line of defense. In Wednesday's trading, the Dow is the biggest percentage gainer and is leading the rest of the market higher. The techs lagged a... READ MORE
SHORT-TERM TREND IS WEAKENING... A very weak December jobs report caught an overbought market by surprise on Friday and caused nervous profit-taking. Contributing to the selling was the fact that the market was struggling with an overbought market condition. The overbought condition isn't new. The daily RSI line... READ MORE
POSTWAR HIGHS... Energy prices are jumping again today. Natural gas is up 5% to a new recovery high. Heating oil and crude oil are also trading at the highest levels since last spring. Chart 1 plots an index of energy prices and shows it trading at the highest level since... READ MORE
BUYING A TELECOM ETF... Last Friday, I wrote a Market Message entitled "Telecom Turnaround". I showed a chart of the AMEX Telecom iShares ETF which appeared to be on the verge of a bullish breakout. I also suggested that the pattern had the look of an "ascending... READ MORE
NEARING TEST OF EARLY 2002 PEAK... The Nasdaq Composite Index is approaching an important chart test. That's because it's nearing the peak hit at the start of 2002 at 2098. I've been using that as a major upside target for most of the past... READ MORE
RYLAND IS BIGGEST LOSER... Last week I talked about Ryland leading the homebuilders lower. It's doing it again today. RYL has tumbled 9.80 this morning on rising volume. That puts the homebuilder at the lowest level in three months and within striking distance of its 200-day moving... READ MORE
LOW U.S. RATES ARE HURTING THE DOLLAR... The direction of the U.S. dollar is heavily influenced by the direction of U.S. interest rates -- especially short-term rates. Since 2000, the Fed has dropped short-term rates to the lowest level in decades. And has pledged to keep them... READ MORE
DUKE ENERGY BREAKS RESISTANCE... Three of today's top percentage gainers in the S&P 500 are charted below. All three are breaking through formidable resistance barriers. In a strong utility group, Duke Energy is moving above chart resistance at its June high. Its 40-week moving average has... READ MORE
BIOTECH INDEX TESTING SEPTEMBER HIGH... After rallying during November and December, the Biotech Index is meeting resistance near its September high. Despite the recent rally, its relative strength line has continued to lag behind the S&P 500. Chart 1 BROKERS TESTING OLD HIGH... Brokerage stocks are also testing... READ MORE
CRB INDEX HITS 15-YEAR HIGH... Earlier today we showed the price of gold breaking out to a new 15-year high. Gold ended up $8.70 to close at 424.80. In a sign of how broad-based the commodity rally has become, the CRB Index also hit a 15-year high. The... READ MORE
GOLD RISES OVER $420... The price of gold has risen $8 today and is trading over $420 for the first time in fifteen years. That's giving a big boost to gold shares today. Chart 1 shows gold moving above the highs reached during 1993 and 1996. The same... READ MORE
WORST SECTOR FOR 2003... I've written recently about sector rotations out of former market leaders into former market laggards. One 2003 lagging sector that appears to be attracting new money is Telecommunations. This was the worst performing sector for 2003. Chart 1, however, shows AMEX Telecom iShares rising... READ MORE
MOTOROLA LEADS TECH SECTOR... The four strongest sectors today are technology, utilities, materials, and healthcare. The charts below show the top performers in each category for the day. In the technology sector, Motorola is breaking out of a three-month trading range -- and on increasing volume. The weekly bars in... READ MORE
STRONG MANUFACTURING DATA HURTS BONDS... U.S. December manufacturing activity hit the highest level in 20 years. That good news is having a predictably bullish impact on stocks. However, it's hurting bonds. As a result, bond prices are down sharply -- and rates are jumping. Chart 1 shows... READ MORE
NASDAQ LEADS MAJOR AVERAGES...DOW LAGS... Of the three major stock averages, the Nasdaq market gained 50% during 2003 and was the years's top performer. By contrast, the S&P 500 gained 26% and the Dow 25%. That means that the Nasdaq gained twice as much as... READ MORE
FALLING DOLLAR IS BULLISH FOR COMMODITIES... A key intermarket principle is that a falling dollar produces higher commodity prices. This is especially true for gold. The U.S. dollar peaked at the start of 2002 and has since fallen to the lowest level in seven years. The CRB Index started... READ MORE
FINANCIALS HAVE STRONG DAY... The Santa Clause rally refers to the usual stock market rally that takes place between Christmas and New Years. So far the market is following its usual end-of-year script. The market had a strong Monday with all major stock indexes hitting new highs for the year.... READ MORE
SECTOR LEADERS REFLECT DEFENSIVE MOOD... As we review the various market sectors on Christmas Eve, it appears that investors have turned somewhat defensive. That's probably not too surprising. The market has had a good year -- boosted by historically low interest rates. New signs of leadership by industrial... READ MORE
FORD JUMPS ON STRONG VOLUME... Auto stocks helped drive the market higher today and Ford was the star of the day. Chart 1 shows the stock jumping 1.62 points in heavy trading. It was one of the top percentage gainers in the S&P 500. The relative strength... READ MORE
VALUE VERSUS GROWTH... I recently wrote about rotation from small cap stocks to large caps. Not only are investors shifting from smaller to larger stocks, but there's a recent preference for value stocks over growth stocks in both categories. Chart 1 plots a ratio of small cap value... READ MORE
DOW CLIMBS TO NEW RECOVERY HIGH... Blue chip stocks continue to do better than the Nasdaq market. The Dow gained 15 points today to hit another recovery high for the year. Most other stock indexes also closed higher. Big board breadth was positive. The Nasdaq market lost 3 points and... READ MORE
DOW OUTPERFORMING THE NASDAQ... Over the past few weeks I've spoken about several rotations that are going on within the stock market. One of the most obvious is the new preference for industrial stocks over technology stocks. That can be seen in Chart 1 which plots a ratio... READ MORE
WEEKEND SADDAM HUSSEIN CAPTURE... Monday's market reactions resulting from the weekend capture of Saddam Hussein are reasonably predictable. Stocks are expected to trade higher while bonds are expected to drop. That's in keeping with their normal inverse relationship. The dollar is expected to rise which will... READ MORE
STOCKS SUFFER REVERSAL DAY... Two things happened today. Neither one was a big surprise. Stocks opened higher on news of Saddam Hussein's capture over the weekend. By day's end, the initial euphoria had faded. In fact, stock averages suffered downside reversal days on relatively heavy volume.... READ MORE
ENERGY PRICES HAVE TURNED UP... Last week, natural gas prices rose to a six-month high. This week crude and heating oil followed suit. A surge on Friday pushed all three energy markets higher. Natural gas was the strongest and gained 9%. Crude oil jumped $1.19 to close over $33... READ MORE
DOW CLOSES OVER 10K... The 15-minute bar chart shows the Dow finally crossing the 10,000 psychological barrier today. It crossed above that threshold just after 2:00 pm and withstood some selling late in the day to close 10008. That's not much of a penetration, but it... READ MORE
CRB INDEX REACHES POSSIBLE RESISTANCE AT 1996 PEAK... The CRB Index of 17 commodity markets is in the midst of a major uptrend. We've pointed that out several times over the past year. Most commodity markets have participated in the rally -- as have common stocks tied to... READ MORE
DEFLATION THREAT HAS PASSED... The Fed left rates unchanged today and left the main part of their statement intact. One change it did make, however, related to the standoff between the forces of deflation and inflation. Up to now, the Fed has maintained that deflation was a bigger threat than... READ MORE
FALLING DOLLAR CONTINUES TO BOOST COMMODITIES... Anyone who doubts the fact that commodity prices trend in the opposite direction of the U.S. Dollar need only compare Charts 1 and 2. They show the major upturn in the CRB Index at the start of 2002 coinciding with the major downturn... READ MORE
NOT GOOD FOR MARKET WHEN ENERGY IS LEADING... With the stock market looking tired at current levels, it's not a good sign to see energy shares take the top leadership spot for the week. Historically, the stock market tends to sag when the energy sector takes a leadership... READ MORE
OPEC LEAVES QUOTAS ALONE... OPEC has decided to leave their oil quotas alone. Energy prices are trading higher today. Recent OPEC statements suggest that higher oil prices are in store. With oil prices at the top of the OPEC trading band, some increase in production would normally be expected to... READ MORE