MAJOR STOCK INDEXES ARE RETESTING TUESDAY'S INTRA-DAY LOWS... Stocks are falling sharply again today and are in the process of retesting intra-day support levels formed on Tuesday. That's an important test. The 10-minute bars in Chart 1 shows the Dow Industrials testing lows formed Tuesday between... READ MORE
10-YEAR TREASURY YIELD NEARS ANOTHER FOUR-YEAR HIGH ... A plunging stock market earlier in the week caused some safe-haven bond buying which caused bond yields to weaken. Chart 1, however, shows the 10-Year Treasury yield climbing 7 basis points today and very close to another four-year high. The recent upside breakout... READ MORE
S&P 500 REBOUNDS OFF CHART SUPPORT... After opening sharply lower, stocks achieved an upside reversal on heavier volume than yesterday. And stocks bounced off a couple of important support levels. Yesterday's message showed a rising trendline extending back to late 2016 near the 2600 level. The... READ MORE
S&P 500 FALLS BELOW 50-DAY AVERAGE... Stocks had a terrible day today. Major stock indexes in the U.S. lost about 4% in one day. And some chart damage was done. The daily bars in Chart 1 show the S&P 500 falling well below its 50-day... READ MORE
Bond yields are rising a lot faster than a lot of people expected. And that's starting to worry stock holders. The weekly bars in Chart 1 show the 30-Year Treasury Yield rising over 3.00% for the first time since last March and heading up for a challenge... READ MORE
BOND YIELDS ARE CLIMBING ... Bond yields are rising a lot faster than a lot of people expected. And that's starting to worry stock holders. The weekly bars in Chart 1 show the 30-Year Treasury Yield rising over 3.00% for the first time since last March and heading... READ MORE
S&P 500 IS DUE FOR A PAUSE ... There are a number of ways to tell when a market is stretched too far. My January 6 message pointed out that the 14-month RSI for the S&P 500 was the most overbought since the late 1990s (twenty years... READ MORE
CRB INDEX ACHIEVES BULLISH BREAKOUT ... A couple of messages during the week showed the Bloomberg Commodity Index nearing a two-year high. It broke through those highs during the week. Today's message shows the more widely-followed Reuters/Jefferies CRB Index accomplishing a bullish breakout of its own by rising... READ MORE
HEALTHCARE SECTOR IS PLAYING CATCH-UP ... Healthcare stocks are off to a good start for the new year, and are one of the market's strongest sectors. That's a big change from the past three years when healthcare was one of the markets weakest laggards. That's... READ MORE
BRITISH POUND RISES WITH UK BOND YIELDS ... It's now official that the U.S. government wants a weaker dollar. Speaking in Switzerland, Treasury Secretary Mnuchin stated that a weak dollar is good for the U.S. economy, and would help reduce the U.S. trade deficit. That'... READ MORE
DOLLAR CONTINUES TO WEAKEN AS FOREIGN CURRENCIES RISE... Chart 1 shows the PowerShares Dollar Index (UUP) falling today to the lowest level in three years. The dollar is losing ground against virtually all major foreign currencies. Most of the upward movement in the UUP is coming from buying of the... READ MORE
The direction of currency markets tells us a lot about the relative strength (or weakness) of global markets. As a rule, stronger economies have stronger currencies, while weaker economies have weaker currencies. As a result, the direction of the U.S. dollar tells us whether to favor U.S. stocks... READ MORE
TEN-YEAR BOND YIELD TOUCHES THREE-YEAR HIGH ... The weekly bars in Chart 1 show the 10-Year Treasury Yield touching the highest level in three years today. A decisive close above its late 2016 peak (2.62%) would signal even higher rates. That's a lot better for stocks than it... READ MORE
MARKET INDEXES NEAR YESTERDAY'S INTRA-DAY HIGH ... Stocks are making a strong comeback after yesterday afternoon's pullback. The charts below show 30-minute price bars for the three major stock indexes. All three are approaching the intra-day highs reached yesterday. Chart 1 also shows the Dow Industrials back... READ MORE
EURO REACHES THREE-YEAR HIGH ... Yesterday's message showed the euro on the verge of a new three-year high. The weekly bars in Chart 1 show the eurozone currency achieving that bullish breakout in today's trading. I also mentioned yesterday that a move above 1.20 would push... READ MORE
A LONGER TERM LOOK AT RISING BOND YIELDS... Chart evidence of a major upturn in Treasury bond yields continues to grow. The weekly bars in Chart 1 show the 10-Year Treasury yield ($TNX) nearing a test of its late 2016 intra-day peak at 2.62%. A decisive move above that... READ MORE
TEN-YEAR TREASURY YIELD REACHES HIGHEST LEVEL SINCE MARCH ... Chart 1 shows the 10-Year Treasury Yield ($TNX) climbing 5 basis points to 2.53% which is the highest level since last March. That leaves little doubt that the trend for Treasury yields is upward. Part of the reason for today'... READ MORE
Global stock markets started off the new year with a bang. U.S. stock indexes exploded to record highs for the best start in years. Foreign stock benchmarks did the same, including the FTSE All World Stock Index which also hit a new record. New records were set in North... READ MORE
S&P 500 IS MOST OVERBOUGHT SINCE LATE 1990S... Global stock markets started off the new year with a bang. U.S. stock indexes exploded to record highs for the best start in years. Foreign stock benchmarks did the same, including the FTSE All World Stock Index which also... READ MORE
UNITED STATES OIL FUND NEARS UPSIDE BREAKOUT ... Energy prices continue to rise. WTIC Light Crude Oil is trading over $61 today for the first time more than two years and is nearing a test of its spring 2015 high just over $62. Chart 1 shows the United States Oil Fund... READ MORE
COMMODITIES ARE HISTORICALLY VERY CHEAP VERSUS STOCKS... I suggested yesterday that commodity prices (and stocks tied to them) usually do better in the later stages of a business cycle as inflation pressures start to build. We may be entering that stage. One of the reasons why investors may be turning... READ MORE
U.S. DOLLAR INDEX WEAKENS ... The U.S. dollar continues to weaken. Chart 1 shows the PowerShares US Dollar Index (UUP) falling today to the lowest level in a month. The dollar is down against all foreign developed currencies except the yen which is marginally lower. The biggest influence on... READ MORE
SANTA CLAUS RALLY STILL LIES AHEAD... The stock market experienced the second slowest trading day of the year on Friday as traders headed home for Christmas. All major stock indexes, however, hit new records during the week. The Russell 2000 Small Cap Index had the week's biggest percentage... READ MORE
DOW JONES HOME CONSTRUCTION INDEX REACHES ELEVEN-YEAR HIGH... Recent reports of strong home sales and home construction have boosted stocks tied to the housing sector. The low inventory of existing homes available for sale argues for even more homebuilding in the year ahead. All of which bodes well for the... READ MORE
10-YEAR TREASURY YIELD HITS NINE-MONTH HIGH ... Chart 1 shows the 10-Year Treasury yield climbing another 3 basis points today to the highest level since March (2.49%). That's most likely tied to the impending passage of the tax bill before Congress with expectations for faster economic growth and... READ MORE
10-YEAR TREASURY YIELD SURGES... The daily bars in Chart 1 show the 10-Year Treasury yield ($TNX) jumping 7 basis points today to the highest level in two months in one of the biggest daily gains this year. That puts the yield within striking distance of its late October intra-day peak... READ MORE
MATERIALS SPDR HITS NEW RECORD ... In a strong market day, materials led stocks higher. Chart 1 shows the Materials Select SPDR (XLB) breaking out to a new record. The XLB has been finding support along its 50-day average. The XLB/SPX ratio (top of chart) has been lagging behing the... READ MORE
The Nasdaq finally joined the Dow and S&P 500 in record territory on Friday. Chart 1 shows the PowerShares QQQ exceeding its November peak at week's end, and in heavy trading. The QQQ is based on the Nasdaq 100 index which includes the 100 largest non-financial... READ MORE
TECHNOLOGY HAS A STRONG WEEK... After leading the market higher for most of the year, technology stocks saw some profit-taking near the end of November, and have lagged behind the rest of the market since then. This week, however, technology was the market's strongest sector. And that was... READ MORE
DISNEY AND FOX SURGE ... The announcement that Walt Disney was buying $66 billion worth of assets from Fox sent both stocks surging today. And they helped make cyclical stocks the day's biggest gainer. Chart 1 shows Disney (DIS) surging more than 3% to the highest closing level since... READ MORE
BOND YIELD IS CLIMBING... The daily bars in Chart 1 show the 10-Year Treasury Yield climbing 2 basis points to 2.40%. The 5-year Treasury Yield (not shown) has climbed to the highest level in six years. Today's strong PPI report may have something to do with that.... READ MORE
INDUSTRIAL SECTOR CONTINUES NEW LEADERSHIP ROLE... Industrial stocks assumed a new market leadership role during November and remained in that role again this week. Chart 1 shows the Industrial Sector SPDR (XLI) gaining 1.4% during the week which made it second only to the financial sector's gain... READ MORE
EMERGING MARKETS ISHARES FALL TO TWO-MONTH LOW... The recent rotation out of technology stocks may be taking a toll on emerging markets which are heavily exposed to that sector. Chart 1 shows Emerging Markets iShares (EEM) falling below its 50-day average to the lowest level in two months. And it&... READ MORE
CHEAPER STOCKS ARE GAINING ... The rotation into cheaper undervalued stocks that started last week is continuing today on the back of the weekend passage of the tax reform package. The relative strength lines in Chart 1 show the past week's leaders to be banks (blue line), retailers (red... READ MORE
Energy shares are finally showing some bounce. The daily bars in the chart below shows the Energy Sector SPDR (XLE) climbing above its 50-day average today. The XLE is bouncing off chart support along its late October low and its 200-day moving average. Those are logical chart points for the... READ MORE
ENERGY SHARES REBOUND ... Energy shares are finally showing some bounce. The daily bars in Chart 1 shows the Energy Sector SPDR (XLE) climbing above its 50-day average today. The XLE is bouncing off chart support along its late October low and its 200-day moving average. Those are logical chart points... READ MORE
S&P RETAIL SPDR BREAKS OUT TO THE UPSIDE... My Monday message showed the S&P Retail SPDR (XRT) attempting an upside breakout above its October high. Chart 1 shows the XRT accomplishing that in pretty decisive fashion over the last two days. In fact, retailers have been... READ MORE
FINANCIAL SPDR CONTINUES TO BOUNCE OFF 50-DAY AVERAGE... My message from last Wednesday showed the Financial Sector SPDR (XLF) starting to bounce off its 50-day moving average. Chart 1 shows that the XLF continues to find support at its 50-day line. That's an encouraging sign. The gray area... READ MORE
S&P 500 RETAIL SPDR ATTEMPTS UPSIDE BREAKOUT ... Retail stocks may have a strong holiday season after all. Chart 1 shows the S&P 500 Retail SPDR (XRT) trying to clear its early October high near 42. That would put it at the highest level in six months.... READ MORE
YIELD CURVE FALLS TO LOWEST LEVEL IN A DECADE ... I've been reading a lot about the yield curve falling to the lowest level since 2007 and the potential warning that carries. The green bars in Chart 1 plot the spread between 10-year and 2-year Treasury yields (the yield... READ MORE