NASDAQ LEADS MARKET RALLY... It seems to always come back to the Nasdaq market. That's because the Nasdaq usually leads the market in both directions. That's shown by the relative strength line plotted along the bottom of the chart. That line is a ratio of the... READ MORE
REIT INDEX HITS NEW HIGH... The Dow Jones REIT Index just recently rose above its previous high reached in the spring of 2002. The $DJR bottomed last October along with rest of the market and really started to gain ground during March as the rest of the market turned higher.... READ MORE
HOMEBUILDERS JUMP ON GOOD VOLUME... Our earlier update today talked about falling bond yields giving a boost to homebuilding stocks and showed KBH turning up. Charts 1 and 2 show two other homebuilders that had very good days. Centex and PHM both broke out of trading ranges on heavy volume.... READ MORE
SUN LEADS NASDAQ LOWER... Sun Microsystems is the most actively-traded Nasdaq stock this morning. And it's price has plunged. Chart 1 shows the stock gapping down to the lowest level in five months. It's also fallen beneath both moving average lines. The stock is now threatening... READ MORE
QQQS SLIP UNDER 50-DAY LINE ON VOLUME... Nasdaq 100 Shares (QQQ) led the market lower again today, reflecting continuing weakness in the technology sector. Chart 1 shows the QQQ closing beneath its 50-day average for the first time in seven weeks. Volume picked up again today as prices fell. Notice... READ MORE
GOLD BACKS OFF FROM FEBRUARY HIGH... On Thursday morning, gold broke briefly through its February high at $390 to hit the highest level in seven years. Unfortunately, it couldn't hold the gain. By day's end, gold had gone from a $5.00 advance to a $2.... READ MORE
OIL BOUNCE HELPS ENERGY STOCKS... OPEC announced a surprise 3.5% cut in production. That's boosting oil prices 90 cents in morning trading and is causing a bounce in oil shares. The energy sector is up 1% and is the only sector in positive territory today. The Oil... READ MORE
CRUDE JUMPS 1.3% ON SURPRISE OPEC CUT... OPEC surprised everyone today by announcing a 3.5% production cut to take effect on November 1. That set a positive tone for energy stocks, but contributed to a down day in the rest of the stock market. Combined with the plunge... READ MORE
DOLLAR PLUNGES TO 3-YEAR LOW AGAINST YEN... As we discussed last week, the weekend G7 meeting called for flexible exchange rates and less intervention by central bankers to keep their currencies from rising. The most dramatic result is being seen in the Japanese yen, which has jumped to the highest... READ MORE
YEN HITS THREE-YEAR HIGH AGAINST THE DOLLAR... Market forces usually win out over market intervention in currency markets. I wrote that statement back on August 29 in a bullish forecast for the Japanese yen. [If you haven't already done so, please read my August 29 Market Message entitled... READ MORE
MIRCOSOFT BREAKS THROUGH MAJOR RESISTANCE... Yesterday IBM broke through some formidable resistance. Today it was Microsoft. The stock rose 1.56 on rising volume to make the Nasdaq's most-actives list. The weekly bars in Chart 1 shows MSFT breaking through the high reached during the fourth quarter of... READ MORE
BANKS AND BROKERS ARE STRONG... The Financial sector is up over 1% today and is the day's strongest group. Chart 1 shows the Financials Select Sector SPDR hitting a seven-week high this morning and moving up to challenge the summer highs. Earlier in the week we showed that... READ MORE
TRANSPORTATION LEADERS... Today's strength in transportation stocks is coming from air freight, rails, and truckers. The top transportation gainer today is CNF Transportation. Chart 1 shows that stock soaring to a new six-month high on massive volume. Yellow Corp is getting close to an eleven-month high. Burlington Nortern... READ MORE
MARKET AVERAGES RESUME UPTRENDS... All the major market averages hit new 52-week highs today to keep their uptrends intact. As has been the case throughout most of the rally since March, the Nasdaq 100 is leading the market higher. It did so again today. Chart 1 shows the Nasdaq 100... READ MORE
TOBACCO STOCKS JUMP... A favorable court ruling sent tobacco stocks sharply higher and made them the day's top performers. The strongest performance was seen in RJ Reynolds. RJR surged to a new six-month high on massive volume. Altria also gapped higher on strong volume. Chart 1 Chart 2... READ MORE
LOWEST CORE INFLATION IN 37 YEARS... This morning's report on consumer inflation showed that the core CPI rose only 0.1% during August. The annual rate of 1.3% was the lowest since 1966. That drop in inflation should keep the Fed from doing anything with interest rates... READ MORE
FED LEAVES RATES UNCHANGED... The Fed did nothing today and the market liked it. The Fed statement was basically unchanged from the prior one and once again emphasized the threat of lower inflation. That meant that the Fed would hold short-term rated down indefinitely. This morning's report that... READ MORE
BOND YIELDS DROP WITH THE DOLLAR -- THE EURO RISES... This morning's report of a drop in consumer confidence has boosted bond prices and caused selling in stocks. When bond prices rise, yields fall. Chart 1 shows the 10-year T-note yield falling under its 50-day average for the... READ MORE
BASIC MATERIAL LEADERSHIP... Basic material stocks led a Friday stock market bounce. Chart 1 shows the Materials Select Sector SPDR scoring a nice uptick on Friday. Its relative strength has shown continuing leadership since mid-July. While the daily chart pattern still has a positive look to it, the weekly bars... READ MORE
DOW HOLDS 20-DAY LINE... All the major stock averages closed higher today. Breadth was positive. The Dow Industrials managed to hold its first line of support at the 20-day moving average which sits at 9429. However, volume was very light. One of the more encouraging moves within the Dow today... READ MORE
SOX IS OVERBOUGHT SHORT-TERM... The Semiconductor (SOX) Index is the down 3.9% today and is the weakest part of the technology sector. That's due mainly to a short-term overbought condition as reflected in Chart 1. After recently hitting a new 52-week high, the 14-day RSI line for... READ MORE
NASDAQ LEADS DECLINE... Pulled down by a 5% drop in the Semiconductor (SOX) Index, the Nasdaq market lost 2.6% today to lead the rest of the market lower. Some bottom-fishing was seen in the defensive drug stocks. [Please see our mid-day update on chips and drugs]. Small-cap stocks also... READ MORE
GOLD TESTING FEBRUARY HIGH... Gold bullion is up $6.10 near midday and is currently trading over $382. That puts gold at the highest price since February when it reached $390 before reversing downward. If gold prices close at the their current level, it would represent the highest close for... READ MORE
CRB INDEX REFLECTS COMMODITY BREAKOUT... The CRB Index of commodity prices is trading at a new six-month high today. Since February, the CRB has been trading sideways in a triangular consolation pattern. In late August, it exceeded its May peak to signal resumption of its major uptrend. In today'... READ MORE
BIOTECHS HAVE A STRONG DAY... While all the market averages hit new highs today, leadership once again came from small caps and the Nasdaq. Biotechs were a big part of the Nasdaq's strong advance to new high ground. The Biotech Index gained 3.8% on the day. Chart... READ MORE
BOLLINGER BAND TARGET FOR S&P 500... One of the ways to arrive at an upside target for a market advance is by applying Bollinger Bands to monthly charts. Chart 1 plots monthly Bollinger Bands for the last seven years over the S&P 500. Chart 1 shows... READ MORE
CISCO MOVES UP ON GOOD VOLUME... Cisco rallied to a new 52-week high today and was the most actively traded stock on the Nasdaq. Given the size of the stock, and its role as a Nasdaq bellwether, that was another encouraging sign for the technology sector. With Cisco having cleared... READ MORE
VOLUME AND BREADTH ARE STRONG... The month of September got off to a roaring start today. Strong economic news at the start of the day pushed bond prices lower and stock prices higher. The dollar was also strong, while gold prices lost $3.00. One of the day's... READ MORE
THE DOLLAR IS TESTING 200-DAY AVERAGE... The Dollar Index has been rallying since June within the confines of a long-term downtrend. That rally may be about over. Chart 1 shows the Dollar Index (plotted through Thursday's close) starting to struggle at its 200-day moving average. In addition, the... READ MORE
CRB STARTING TO RALLY AGAIN... Late last year the CRB Index hit a new five-year high. Since then, the commodity index has been in a large consolidation pattern. Since July, the CRB has started to rally again. This suggests that the long-term uptrend in commodity markets is resuming. Rising commodity... READ MORE
GOLD RISES OVER $370... In morning trading, the price of bullion is up $5.00. More importantly, gold is now trading over $370 for the first time in nearly three months. We take that as a bullish sign that gold may be starting another upleg. Gold still needs to clear... READ MORE
GOLD STOCKS JUMP 4.8%... The price of gold bullion gained $7.30 today to close at 374. That's the highest close in three months. Today's price jump pushed gold through the upper line in a symmetrical triangle that has existed since February. That suggests that... READ MORE
XEROX IS TOP S&P 500 GAINER... Xerox was the day's top percentage gainer in the S&P 500. Today's bounce appears to have come just in time. Chart 1 shows the stock bouncing sharply off its 200-day moving averge on the heaviest volume... READ MORE
NASDAQ COULD BE IN FIFTH WAVE ADVANCE... The recent downside correction in the Nasdaq market took place in three waves -- which qualifies that as an A-B-C correction. This week's move to new high ground signals the completion of that minor correction. While that's good news,... READ MORE
MORE TECH AND SMALL CAP LEADERSHIP... Two of the strongest parts of the market today were technology and small caps. Both influences helped the Nasdaq market close at a new 52-week high. It also did so on rising volume. That's a good combination. Small and mid-cap market indexes... READ MORE
GOLD STOCKS STILL SHINE... The two indexes of gold stocks that we track are now in confirmed major bull markets. The AMEX Gold Bugs Index (HUI), which includes only unhedged gold stocks, has been trading at a multi-year year for some time. The PHLX Gold/Silver (XAU) Index, however, had... READ MORE
BOND YIELDS ARE FALLING... After briefly hitting another yearly high last week, yields on T-bond and notes are falling today. The short-term indicators also suggest that yields may be putting in short-term tops here. The 14-day RSI is showing negative divergence near 70; and the daily MACD lines are turning... READ MORE
QQQS ARE MOST ACTIVELY TRADED UNIT... At midday, we showed the Dow Industrials hitting a new 52-week high. The biggest percentage gain, however, was seen in the Nasdaq 100 Index. The QQQs were also the the most-actively traded issue in today's strong market advance. The daily chart showed... READ MORE
RATES ARE JUMPING AGAIN... Just a day after the Fed talked about keeping interest rates low, long-term yields rose sharply. A stronger-than-expected retail report caused T-bond and note prices to fall over a point. The yield on the 10-year T-note jumped to a new yearly closing high of 4.56%... READ MORE
MARKET LIKES FED'S BALANCED STATEMENT... No one was surprised that the Fed didn't make any rate changes today. What it did do was return to its statement of a couple of months ago that deflation was still a risk, that interest rates would stay low for... READ MORE