ENERGY ETF BREAKS OUT... After lagging behind the rest of the market for the past year, the energy sector finally got energized today. In a generally listless trading day, the Energy Select Sector SPDR jumped over 2% and was by far the day's standout performer. Chart 1 shows... READ MORE
NASDAQ AND DOW REACH PSYCHOLOGICAL NUMBERS... The Dow and the Nasdaq have reached important round numbers -- 2,000 for the Nasdaq and 10,000 for the Dow. Although round numbers do carry psychological importance, the 2000 number carries less chart importance than 2098 for the Nasdaq. Chart 1 shows... READ MORE
VOLUME PICKS UP... Traders apparently decided to lock up some profits at the Nasdaq 2,000 level. The daily chart shows the Nasdaq hitting an intra-day high of 2000.90 today before losing almost twenty points. That downside reversal day was also accompanied by the heaviest trading in a month.... READ MORE
S&P 500 RESUMES UPTREND... The S&P 500 is now trading at the highest level in more than a year and is reflective of a strong start to the month of December, which is traditionally the strongest month of the year. Strong economic data is boosting global... READ MORE
PAPERS AND CHEMICALS LEAD CYCLICAL RALLY... Today's report that U.S. manufacturing saw the biggest gain in twenty years gave another big boost the economically-sensitive cyclical and basic material stocks. Two of today's strongest cyclical groups were the chemicals and papers. Charts 1 and 2 show... READ MORE
PRETTY TYPICAL ACTION... Two events made today's action pretty typical. One was that the market finished higher. That's pretty typical for Thanksgiving week. The second was that volume was light. That's also typical for the day before and after the holiday. Despite the light... READ MORE
LEADING SECTOR FOR THE DAY... The Materials Select Sector SPDR was the top performing sector for today. Chart 1 shows that the XLB jumped sharply and is trading at a new closing high for the year. The rising relative strength line along the bottom of the chart shows continuing leadership... READ MORE
DOLLAR RALLIES AGAINST THE EURO... The dollar is having a good day against the Euro. Chart 1 shows that the Euro is having its biggest daily drop in three weeks. While this doesn't reverse the uptrend in the Euro (and the downtrend in the dollar), it is setting... READ MORE
DOLLAR BOUNCES, COMMODITIES DROP... The dollar had its biggest gain in three weeks. Chart 1 shows the Euro falling today from a short-term overbought condition. The dollar also bounced against the yen. With all the attention focused on recent dollar weakness, today's rebound in the greenback had a... READ MORE
WEEKLY MOMENTUM IS WEAKENING... Even with a modest Friday bounce, the market suffered its second losing week in a row. A glance at the weekly bars for the Dow in Chart 1 shows that this is the first consecutive weekly losses since before the bull leg began last Februry. Volume... READ MORE
GE HITS FIVE-WEEK HIGH... General Electric is climbing today and is the most-actively big board stock. That's a good combination. Its chart action is also encouraging. The daily bars in Chart 1 show GE bouncing off its 200-day moving average this week. Its price climb over the past... READ MORE
EURO JUMPS TO RECORD AGAINST THE DOLLAR... The Euro surged 1.80 today and exceeded its May/June high. That put the European currency at a new record high against the dollar. While that was bad for the dollar, it was good for gold. Bullion climbed $6.10 to close... READ MORE
NIKKEI FALLS BELOW 10,000... Today's selling started in Asia. The biggest drop came in Japan with a 3.7% loss. Hong Kong fell 1.7%. In Europe, French and German stock markets lost an average of 3%. Chart 1 shows the Nikkei breaking chart support at its... READ MORE
NASDAQ 100 LEADS FRIDAY DECLINE... A glance at the stock table on the Stockcharts.com homepage shows that the Nasdaq 100 lost 2.2% on Friday to lead the end of week selloff. That decline contributed to a 1.9% drop in the Nasdaq Composite, which made it the weakest... READ MORE
DRUGS BOUNCE SHARPLY... Drug stocks led an impressive bounce in the healthcare sector. Chart 1 shows the AMEX Pharmaceutical Index jumping to a two-month high. The DRG is also back over its key moving average lines. The relative strength line under the chart has been dropping for the last six... READ MORE
S&P 500 RETRACES 38% OF BEAR TREND... One of the ways we arrive at upside targets is to identify percentage retracement levels. The most popular percentage retracement of a previous trend is 50%. Professional technicians also place importance on Fibonacci retracements of 38% and 62%. It's... READ MORE
CRUDE JUMPS $1.55... Energy prices spiked higher today. Heating oil gained 4.84 points to lead the advance. Crude oil futures prices jumped $l.55 to close back over $30. That doesn't really change the overall direction of oil, which has been trading sideways for months. To... READ MORE
SOX LEADING STRONG TECHNOLOGY SECTOR... The Semiconductor (SOX) Index is the day's strongest group and is making technology the day's leading sector. Four of the top five percentage tech gainers are in the chip group -- Altera, Applied Materials, National Semiconductor, and Xilinx. AMAT, NSM, and... READ MORE
STRONG ECONOMIC REPORTS BOOST STOCKS... All the major stock averages have hit new highs for the year, thereby keeping their uptrends in intact. A couple of stronger-than-expected economic reports had a predictable effect on the various markets. Stocks and the dollar were strong, while bonds and commodities were weak. Leadership... READ MORE
MATERIALS LEAD OCTOBER'S GAINS... Anyone whose been reading our market messages over the past month shouldn't be surprised to find out that Basic Materials were the strongest market sector for the month of October. Materials gained 9.7% for the month followed by a 9.1%... READ MORE
BUYING INDUSTRIAL METALS... A big reason why commodity markets have been rallying so much this year is the result of buying by China. Investors Business Daily's commodity page this morning carried the headline "Soybeans Soar on Chinese Buying". Soybeans are trading at the highest level in... READ MORE
MATERIALS SELECT SECTOR SPDR HITS NEW HIGH... Earlier today I talked about how rising industrial metal prices (and commodity prices in general) were giving a big boost to basic material stocks and were keeping them in a market leadership role. That trend was evident again today as the Materials Select... READ MORE
FED STILL SEES RISK OF DEFLATION... The bond and stock markets seemed to like the Fed's statement today. It offered a balanced view of things without leaning too far in either direction. It repeated the theme that deflation remains a bigger threat than inflation. Bond traders liked that.... READ MORE
STILL ON NASDAQ ALERT... Last Thursday, I talked about how the Nasdaq was beginning to look toppy -- owing primarily to the size of its yearlong advance, its proximity to major resistance near 2000, and the fact that its weekly indicators were overbought. I also talked about keeping an eye... READ MORE
NIKKEI LOSES 5%... The Japanese stock market had its biggest percentage loss in two years. Chart 1 shows that the Nikkie 225 fell 554 points last night to break its 50-day moving average by the biggest margin in six months. The Hang Seng Index lost 4%. That got the day... READ MORE
AMAZON FORMS POSSIBLE ISLAND TOP... Big losses in Amazon.com and Merck are leading a market correction in morning trading. AMZN has gapped down almost four points in active trading. Combined with an upside gap formed two weeks ago, a potential "island reversal" has formed on the daily... READ MORE
HONG KONG MARKET HITS NEW TWO-YEAR HIGH... Over the first three quarters of this year, Asia has been the strongest region of the world. Within Asia, China has been the main powerhouse. One sign of that has been the relative strength in the Hong Kong market. Chart 1 shows the... READ MORE
THE NEW BOOK IS DONE... I spent this morning at my publisher in New York getting a final look at the pages for my new book on intermarket analysis. I'm happy to say that the book is totally done and should be available by the start of the... READ MORE
HONEYWELL IS DOW'S STRONGEST STOCK... Honeywell is the Dow's top percentage gainer today. Chart 1 shows the stock moving up to challenge its September high near 30. A close above that chart barrier would register a new 52-week high. The relative strength line along the bottom... READ MORE
T-NOTE YIELDS OVER 50-DAY AVERAGE... The yields on T-bonds and notes are continuing to rise. A couple of weeks ago the 10-year T-note yield was testing its 200-day moving average. It bounced off that line and has now risen back over its 50-day average. When yields are rising, prices of... READ MORE
MARKET A LITTLE OVERBOUGHT... Today's pullback isn't too surprising giving the fact that several of the major market averages are somewhat overbought. Charts 1 and 2 show essentially the same picture on two of today's more actively-traded indexes. The Nasdaq 100 Shares touched their... READ MORE
BANK INDEX HITTING 52-WEEK HIGH... Strong action in banking stocks is making the financial sector the day's leading group. Chart 1 shows the PHLX Bank Index moving to a new 52-week high today. Even more impressive is the ability of the BKX to rise above the highs formed... READ MORE
CRUDE OIL REACHES $32... A combination of low supplies this week, and the onset of colder weather, has given a strong boost to the entire energy complex. Nearby crude oil plrices jumped 96 cents today to close just shy of $32. Chart 1 shows that crude oil prices are approaching... READ MORE
NASDAQ HITS NEW HIGH... Jobless claims dropped much more than expected; the drop was the biggest in eight months. That's reminiscent of last Friday's strong jobs report. And the market's reactions are the same. Stocks are higher, bonds are lower; in addition, a bouncing... READ MORE
RUSSELL 2000 REACHES NEW HIGH... Our earlier update showed the small-cap Russell 2000 moving up to a new recovery high this morning. I take that as a positive sign for the market. That's because leadership by small cap stocks is the historical norm when an economy is recovering... READ MORE
LEADING A RECOVERY... Earlier today, I pointed out that small caps and technology stocks were leading an upside breakout in the stock market. That's a good sign, because leadership by those two groups is usually seen in the early stages of an economic recovery. I've also... READ MORE
ALCOA GAINS ON STRONG EARNINGS... A strong earnings report last night boosted Alcoa today and made it day's strongest Dow stock. Chart 1 shows the big aluminum stock climbing on rising volume today. The stock isn't too far from a new 52-week high. The rising relative... READ MORE
DOLLAR FALLS BACK TO YEARLY LOW... A strong jobs report last Friday produced a bounce in the Dollar Index off its June low. It fell heavily today, however, and is within striking distance of this year's low again. Chart 1 shows that the rally in the Dollar Index... READ MORE
EMPLOYMENT NUMBERS SURPRISINGLY STRONG... Today's employment report was much stronger than expected. It showed job growth for the first time in eight months. And, the unemployment figure was unchanged. The immediate market reactions are predictable. Stocks are opening sharply higher. Breadth figures are extremely strong. The S&... READ MORE
GOLD PLUNGES $15... Our morning comment talked about how the strong stock market bounce and a firming dollar was causing some profit-taking in gold shares. That profit-taking has gotten much heavier owing to a $15 drop in the price of gold (Chart 3). Gold is trading below initial chart support... READ MORE