SMALL CAP LEADERSHIP... The last couple of messages have shown improvement in market breadth. That improvement was reflected in rising advance-declines lines and percent of stocks over moving average lines. Here's another example of improving breadth in the form of small cap leadership. The daily bars in Chart... READ MORE
NEXT TEST IS DECEMBER HIGH... The technical condition of the stock market continues to improve. Chart 1 shows the S&P 500 clearing its 200-day moving average. Although not shown here, it also cleared a falling trendline extending back a year. Both are positive signs. The next test will... READ MORE
S&P 500 REMAINS IN MAJOR DOWNTREND...Although stocks have experienced a counter-trend rally over the last three months, their major trend is still down. One way to measure that is by looking at where moving averages and trendlines are located. Chart 1 show the S&P 500... READ MORE
Last week's message showed how a falling dollar was boosting the price of gold and its miners. The falling dollar may also be lending support to material stocks tied to various commodities which can also benefit from a weaker dollar. FALLING DOLLAR BOOSTS MATERIAL STOCKS The green area... READ MORE
BOND YIELDS AND THE DOLLAR WEAKEN... The direction of interest rates plays a big role in determining the direction of the dollar. Rising U.S. rates during 2022 helped push the dollar to the highest level in twenty years. Chart 1, however, shows the 10-Year Treasury yield peaking during October... READ MORE
STOCKS END YEAR UNDER PRESSURE... Little has changed since the last message written a couple of weeks ago. At that point, major stock indexes had failed a test of overhead resistance levels and were starting to weaken. They've weakened even further since then. Chart 1 shows the Dow... READ MORE
STOCK INDEXES ARE FAILING AT OVERHEAD RESISTANCE LEVELS... The year-end stock market rally appears to have run its course. A more hawkish Fed on Wednesday suggesting that rates will be higher for longer started the stock selling. This mornings's economic reports for November showed a drop in retail... READ MORE
STOCK INDEXES CONTINUE TO STRUGGLE WITH OVERHEAD RESISTANCE... The expected yearend rally has taken major stock indexes up against some formidable overhead resistance barriers. So far, the rally hasn't been enough to reverse the market's major downtrend. While seasonal trends are usually favorable during the fourth... READ MORE
DOW CONTINUES TO LEAD... The market ended the Thanksgiving week with the Dow gaining ground on Friday while the S&P 500 and and Nasdaq ended the day lower. For the week, all three gained ground with the Dow in the lead and the Nasdaq turning in the weakest... READ MORE
DOW LEADS WHILE SPX AND QQQ LAG BEHIND... The fourth quarter rally in stocks may be losing some upside momentum. That's especially true of the Dow. Chart 1 shows the Dow Industrials approaching formidable overhead resistance at their August highs. That may be hard to overcome. Charts 2... READ MORE
DOW LEADS STOCKS HIGHER... Annual inflation for October was a lower than expected reading of 7.7% which was the lowest since January. That softer reading raised hopes that inflation might be peaking and pushed stock and bond prices sharply higher. A big drop in bond yields and the dollar... READ MORE
SECTOR ROTATION MODEL .. One of the more useful ways to help determine the state of the stock market and the economy is to compare how various market sectors are performing. Certain market sectors do better at market tops, while others do better at market bottoms. Chart 1 shows the Stockcharts... READ MORE
DOW TESTS 200-DAY LINE... October has turned to be a strong month for the market, and industrials in particular. Chart 1 shows the Dow Industrials reaching a two month high and trying to close above its 200-day moving average. The Dow has gained more than 5% for the week and... READ MORE
SHORT-TERM REBOUND CONTINUES... Stocks are ending the week on a positive note and continue to show signs of having formed a short-term bottom. The daily bars in Chart 1 show the S&P 500 building on the gains that started the previous week. Sbort-term momentum indicators like the RSI... READ MORE
NO UPSIDE FOLLOW-THROUGH...Stocks are being sold again on Friday following Thursday's impressive upside reversal. The daily bars in Chart 1 show the S&P 500 reversing upward on Thursday after falling to another bear market low. And it did so on heavy volume. The fact that... READ MORE
STOCK INDEXES GAP LOWER... Stocks are selling off sharply following this morning's September job report which came in a bit stronger than expected. That may be a case of good economic news being bad for stocks because it keeps the Fed on its path of higher interest rates.... READ MORE
FALLING FOREIGN CURRENCIES... Last week's message showed the U.S. Dollar Index rising to the highest level in twenty years. That's due largely to the fact that the Fed has been hiking rates faster and higher than most foreign bankers. What's good for the... READ MORE
TREASURY YIELDS SOAR... An intermarket view across the various financial markets continues to present an overall bearish picture. And it starts with this year's surge in interest rates. Chart 1 shows the yield on 2-Year and 10-Year Treasury yields surging to the highest levels in more than a... READ MORE
STOCK INDEXES NEAR TEST OF SUMMR LOW... Hotter than expected inflation numbers this week pushed interest rates sharply higher and stock prices sharply lower. The daily bars in Chart 1 show the S&P 500 falling to the lowest level in two months and nearing a likely test of... READ MORE
S&P 500 ENDS THREE-WEEK DECLINE... Stocks are ending the week on a strong note after falling for the previous three weeks. An oversold condition and the presence of underlying chart support are also playing a role in this week's buying. The 9-day RSI line in the... READ MORE
STOCKS SELL OFF FOLLOWING POWELL SPEECH... A modest rally attempt was turned back pretty decisively today following a speech by Fed chief Powell that sounded more hawkish than the market was expecting. Friday's heavy selling also reinforced the view expressed last Friday that the summer rally in stocks... READ MORE
S&P 500 STALLS AT 200-DAY AVERAGE...The two month rally in stocks has run into a couple of formidable resistance lines while in an overbought condition. Last week's message showed the S&P 500 nearing a test of its 200-day moving average and a falling... READ MORE
JUNE HIGHS CLEARED... Last week's message showed major stock indexes testing initial resistance at their June highs, and suggested that an upside penetration of that resistance could lead to a possible test of their 200-day moving averages. Those June highs have since been exceeded. Chart 1 shows the... READ MORE
INTERMEDIATE TERM RALLY CONTINUES... The stock rally that started in mid-June continues to gain ground which confirms that the market has put in an intermediate term bottom. The question is how far that intermediate rally can rally within the current downtrend. Hopefully, the charts shown below will help determine where... READ MORE
STOCK INDEXES GAIN MORE GROUND... Despite a .75% rate hike by the Fed on Wednesday, and a second quarter of negative GDP growth on Thursday, stock indexes continued to gain ground. And they're in the process of testing some overhead resistance lines. Chart 1 shows the Dow Industrials... READ MORE
MODEST WEEKLY GAINS... Stock indexes gained some ground this week, but not enough to reverse major downtrends. And they remain below overhead resistance levels. The daily bars in Chart 1 show the Dow Industrials rising to the highest level in six weeks and clearing their 50-day moving average. While that... READ MORE
TEN YEAR - TWO YEAR YIELD CURVE INVERTS... Chart 1 shows the spread between the ten year and two year Treasury yields falling below the zero line which signals an inverted yield curve. That means that the shorter two-year yield is now higher than the longer maturity ten-year yield. That... READ MORE
MAJOR STOCK INDEXES GAIN ON THE WEEK... Stocks saw modest gains on the week but not enough to disturb their major downtrend. Chart 1 shows the Dow Industrials gaining .77% for the week but remaining well below overhead resistance levels and moving average lines. Chart 2 shows the S&... READ MORE
STOCKS REMAIN UNDER PRESSURE...Stocks are ending the quarter with more selling. The weekly bars in Chart 1 show the S&P 500 down more than 3% on the week with a monthly loss of more than 8%. For the year, the S&P 500 is down 20%... READ MORE
BEAR MARKET BOUNCE...Major stock indexes had their first gain in three weeks and made up for the previous week's big losses. But any rebound still has to be viewed as a bear market bounce. The weekly bars in the first three charts below paint a similar picture.... READ MORE
RISING RATES HURT HOMEBUILDERS... Weakness in homebuilding stocks is another sign that the U.S. economy is weakening. Rising mortgage rates which are closely tied to bond yields have a lot to do with that. The brown weekly bars in Chart 1 show the U.S. Home Construction iShares (ITB)... READ MORE
HOT CPI REPORT SIGNALS LOWER STOCK PRICES... Friday's report that the May Consumer Price Index gained 8.6% from the previous year was the highest inflation rate in more than forty years and pushed stock prices sharply lower for the day and week. Going into the report, expectations... READ MORE
NOT MUCH OF REBOUND...This time last week it seemed clear that stocks had put in a short-term bottom marking the start of a potential bear market rally. So far at least, that rally hasn't gone very far. The three charts shown below show the same overhead resistance... READ MORE
WEEKLY S&P CHART SHOWS OVERSOLD CONDITION... Stocks are having their best week in two months which suggests that a short-term bottom may be in place. Before looking at daily charts, however, it's worth checking a weekly chart to keep things in perspective. The weekly bars in... READ MORE
S&P 500 REMAINS IN DOWNTREND...Stock prices continue to weaken with no sign of a bottom. The daily bars in Chart 1 show the S&P 500 having fallen to the lowest level in more than a year and nearing a 20% loss which signals a bear... READ MORE
INFLATION REMAINS THE BIGGEST THREAT TO MARKETS... It was reported this morning that April's Producer Price Index for the past year came in at 11%. That followed yesterday's report that the Consumer Price Index was 8.3%. Both reports confirm that inflation remains dangerously high with... READ MORE
STOCK SELLING RESUMES... Stocks are being sold heavily today and are totally reversing yesterday's Fed relief rally. Stocks have given back all of Wednesday's price gains and look poised to fall further. Chart 1 shows the Dow Industrials falling sharply today after meeting resistance at their... READ MORE
A BAD APRIL ENDS UNDER PRESSURE... Stocks fell sharply on Friday to end one of the weakest months in recent memory. The Nasdaq market lost -13.2% to register its worst month since 2008. The S&P 500 and Dow lost -8.8% and -4,9 % and experienced the... READ MORE
50-BASIS POINT HIKE ON THE TABLE FOR FED MAY MEETING... Today's statement by Fed Chairman Jerome Powell that a 50-basis point rate hike was on the table for May, combined with other hawkish comments, pushed stocks sharply lower today. And their technical condition continues to weaken. Particularly disturbing... READ MORE
STOCKS CONTINUE TO WEAKEN... The technical condition of major U.S. stock indexes continues to weaken. All three shown below lost more ground during the week. Chart 1 shows the Dow Industrials meeting overhead resistance near their red 200-day moving average. Chart 2 shows the S&P 500 trading... READ MORE