Editor's Note: This article was originally published in John Murphy's Market Message on Thursday, September 5th at 10:46am ET. A rally in global stocks has taken a turn for the better with major stock indexes clearing some upside resistance barriers. The three major stock indexes... READ MORE
MAJOR STOCK INDEXES ACHIEVE UPSIDE BREAKOUTS...A rally in global stocks has taken a turn for the better with major stock indexes clearing some upside resistance barriers. The three major stock indexes shown below have all cleared their August highs and 50-day moving averages. At the same time, their 14-day... READ MORE
MAJOR STOCK INDEXES BACK OFF FROM OVERHEAD RESISTANCE...Stocks are only halfway through one of the year's weakest seasonal stretches between August and September. And September is usually the weaker of the two. And they're starting the month on a weak note. Another round of tariffs... READ MORE
THE DOW HOLDS ITS RED LINE...A lot of underlying support levels have held this week, and stocks are now approaching overhead resistance.Tuesday's message showed the Dow Industrials testing its 200-day moving average for the third time since the start of August. Sometimes the third time is... READ MORE
SMALLER STOCKS TEST IMPORTANT SUPPORT LEVEL...Yesterday's message showed the Dow Industrials and a handful of sector SPDRS testing potential support at their 200-day moving averages. Today's message will show three stock groups that are testing even more important support along their spring lows. Starting with... READ MORE
STARTING WITH THE DOW...Chart 1 shows the Dow Industrials finding support at its 200-day moving average for the third time this month. That's an encouraging sign. In addition, its daily MACD lines are close to turning positive (lower box); while its 14-day RSI line (top box) is... READ MORE
Editor's Note: This article was originally published in John Murphy's Market Message on Thursday, August 15th at 3:47pm ET. Everyone's talking about inverted yield curves. The 10 year - 3 month yield curve turned negative a few months ago. The 10 year -... READ MORE
DEFLATIONARY COMMODITY TREND... My earlier message today showed that bond yields and stocks have been trending in the same direction for most of the last two decades. It further explained that deflationary tendencies around the start of the new century changed the bond-stock relationship that existed prior to that. Plunging... READ MORE
BOND YIELDS AND STOCKS BEFORE 2000...A lot of attention is being given to what falling bond yields mean for the U.S. economy and stock market. I've written several books on intermarket analysis that explain the impact that bond yields have on the stock market (and eventually... READ MORE
MORE HEAVY STOCK SELLING...Global stocks are under heavy selling pressure again today. Bond yields continue to drop around the world. The ten-year Treasury yield dropped below the 2-year yield for the first time since 2007 which has created a second inversion of the yield curve. The 10-year yield fell... READ MORE
STOCKS END MODESTLY LOWER AS BOND YIELDS WEAKEN...After a week of wild swings, stocks ended only modestly lower on the week. The devaluation of the Chinese yuan to the lowest level in more than a decade set the tone for a volatile week in financial markets. The 10-year Treasury... READ MORE
Editor's Note: This article was originally published in John Murphy's Market Message on Friday, August 9th at 12:27pm ET. I was asked during an interview on StockCharts TV yesterday whether I was concerned about the Dow Theory divergence between the Dow Industrials and the Dow... READ MORE
TRADITIONAL DOW THEORY DIVERGENCE...I was asked during an interview on Stockcharts TV yesterday whether I was concerned about the Dow Theory divergence between the Dow Industrials and the Dow Transports. I responded that I was. But with an additional twist to that theory which is also giving a warning... READ MORE
STOCK INDEXES CONTINUE REBOUND...Yesterday's impressive intra-day rebound in stocks is continuing into today's trading.Chart 1 shows the Dow Industrials surviving a test of its 200-day moving average yesterday; and building on that today. That's an encouraging sign. But it still needs to... READ MORE
DOW TESTS 200-DAY AVERAGE...Chart 1 shows the Dow Industrials testing their 200-day moving average (red line). The 14-day RSI line has dipped below 30 signalling a short-term oversold condition. That's the first important test of support for the Dow. BANKS HAVE A BAD DAY...Falling bond yields... READ MORE
S&P 500 STILL LOOKS VULNERABLE...U.S. stocks are under pressure again today. Another plunge in global bond yields is undermining confidence in the global economy. Three more foreign central banks lowered rates today in New Zealand, India, and Thailand. That's feeding the "race to... READ MORE
SECTOR BREADTH ISN'T BROAD ENOUGH...One of the ways to measure the strength of the stock market's uptrend is to see how many of its eleven sectors have hit new highs with the major stock indexes. In a strong uptrend, most market sectors should be confirming... READ MORE
CHINA DEVALUES YUAN IN RESPONSE TO NEW TARIFFS...It didn't take long for China to retaliate against last Thursday's announcement of a new U.S. tariffs on Chinese imports starting on September 1. Those tariffs are a tax on Chinese imports which raises their price. Today&... READ MORE
S&P 500 UPTREND MAY BE TESTED...Global weakness has become a major theme for financial markets. Even the Fed's so-called "data dependence" relies more on developments in foreign economies and markets. That includes falling foreign interest rates which are pulling bond yields down in... READ MORE
AUSSIE AND CANADIAN DOLLARS ARE TIED TO COMMODITIES...Two major events this past week have highlighted the need to view things from a global perspective. Mr. Powell on Wednesday emphasized that the Fed was lowering its short-term rate to partially offset weakness in foreign markets. President Trump yesterday announced new... READ MORE
BOND YIELDS PLUNGE...A threat of new tariffs on China starting September 1 is contributing to this afternoon's plunge in bond yields. And lower stock prices. Chart 1 shows the 10-Year Treasury yield plunging 13 basis points to the lowest level since 2016. Even more surprising is a... READ MORE
A RISING DOLLAR IS KEEPING COMMODITY INFLATION DOWN...One of the reasons given by the Fed for lowering rates yesterday was to boost inflation. But the dollar hit the highest level in a year right after the rate cut. That's because foreign central bankers in Asia and Europe... READ MORE
STOCKS WEAKEN...Stocks sold off on today's Fed accouncement. Or, more accurately, during the press conference afterwards based on some confusing responses from Jerome Powell regarding the reasons for today's rate cut, or whether more cuts are coming. The first three charts show three major stock... READ MORE
NASDAQ AND S&P 500 HIT NEW RECORDS... SMALLER STOCKS AND TRANSPORTS STRENGTHEN... Stocks ended the week on a strong note. Charts 1 and 2 show the Nasdaq Composite Index and the S&P 500 closing at record highs on Friday. A report showing 2.1% GDP growth... READ MORE
Editor's Note: This article was originally published in John Murphy's Market Message on Friday, July 26th at 11:16am ET. Global stock indexes are once again testing overhead resistance barriers. The weekly bars in Chart 1 show the MSCI All Country World Index iShares (ACWI) in... READ MORE
ALL COUNTRY WORLD INDEX TESTS PREVIOUS HIGH...Global stock indexes are once again testing overhead resistance barriers. The weekly bars in Chart 1 show the MSCI All Country World Index iShares (ACWI) in the process of testing its previous high set at the start of 2018 (see red circle). Any... READ MORE
UPS GIVES BIG BOOST TO TRANSPORTS...The recent upturn in transportation stocks is starting to gain more traction. Chart 1 shows the Dow Transports rebounding nicely from last week's late selloff; that's helping to restore the bullish upturn that occurred at the start of last week.... READ MORE
BANK INDEX TURNS UP...Stocks are having another strong day, with sector leadership coming from materials (led by commodity chemicals) and industrials (with help from airlines). Semiconductors continue to lead technology higher. Financials are also having a strong day, led by banks. We're going to focus on banks... READ MORE
BANKS HELP BOOST FINANCIALS...Financials are one of the day's strongest sectors. And banks are a big reason why. The daily bars in Chart 1 show the KBW Bank Index finding support above its 50- and 200-day moving averages; as well as a rising trendline drawn under its... READ MORE
TRANSPORTS HAVING A VERY BAD DAY... Just a day after reaching a new two-month high, transportation stocks are the day's weakest group. The daily bars in Chart 1 show the Dow Jones Transportation Average falling more than 3% today. And it's being led lower mainly by... READ MORE
U.S. STOCK INDEXES SET NEW RECORDS...The three major U.S. stock indexes ended the week in record territory. A number of sectors hit records as well, or are getting close to doing so. Consumer discretionary and technology SPDRs hit new records. Financials hit a new high for the... READ MORE
Editor's Note: This article was originally published in John Murphy's Market Message on Friday, July 12th at 11:39am ET. Gold is more than just a commodity. Gold is sometimes also viewed as an alternate currency. When global traders lose confidence in their currency, they often... READ MORE
GOLD IS DOING BETTER THAN THE WORLD'S MAJOR CURRENCIES... Gold is more than just a commodity. Gold is sometimes also viewed as an alternate currency. When global traders lose confidence in their currency, they often turn to gold as an alternative store of value. Since gold is quoted... READ MORE
POWELL TESTIMONY MAKES JULY RATE CUT MORE LIKELY...Last Friday's strong jobs report raised concerns about a July rate cut later this month, which boosted interest rates and caused some profit-taking in stocks. Mr. Powell today put the July rate cut back on the table. Traders are now... READ MORE
STRONGER THAN EXPECTED JOBS REPORT BOOSTS YIELDS...A increase of 224,000 jobs in June was much higher than expected, and may have diminished hopes for a July rate cut. That can be seen by rising bond yields today. The 10-Year Treasury yield is rising 11 basis points to 2.... READ MORE
S&P 500 SETS NEW RECORD... DOW IS GETTING CLOSE...Stocks are trading higher again today in a shortened pre-holiday trading session. Chart 1 shows the S&P 500 trading well above its late-April high and trading in new record territory again today. The SPX is trading well... READ MORE
Editor's Note: This article was originally published in John Murphy's Market Message on Thursday, June 27th at 3:49pm ET. Previous messages have pointed out that defensive stock sectors were top performers since the market hit a peak at the end of April when trade tensions... READ MORE
TRANSPORTS CLEAR 200-DAY AVERAGE...Two market groups that have been market laggards all year are suddenly attracting new buying. I'm referring to small cap stocks and transports. Chart 1 shows the Dow Jones Transportation Average ending the week above its 200-day moving average. It's also one... READ MORE
DEFENSIVE SECTORS FALL BEHIND... Previous messages have pointed out that defensive stock sectors were top performers since the market hit a peak at the end of April when trade tensions started to resurface. Stocks, however, have recovered most of their May losses during the month of June. And sector leadership... READ MORE
SMALL CAPS CONTINUE TO UNDERPERFORM...Small cap stocks have been lagging behind larger stocks for most of this year. And in a big way. The black bars in Chart 1 show the Russell 2000 Small Cap Index (RUT) lagging behind the S&P 500 Large Cap Index (gray area)... READ MORE