STOCK INDEXES BOUNCE OFF CHART SUPPORT... Global stocks and commodities are off to a strong start today. U.S. stocks are following the lead of rising foreign shares. Today could be an important day for U.S. stocks if the market can hold and build onto this morning's... READ MORE
STOCHRSI TURNS SHORT-TERM BEARISH FOR THE NASDAQ ... A correction or consolidation period could be in store as the Nasdaq comes off overbought conditions in September. Chart 1 shows the Nasdaq surging around 13% in September and breaking above its summer high. With a 1.11% decline today, the index is... READ MORE
QQQQ, SPY AND XLY FORM SMALL CONSOLIDATION PATTERNS ... Link for todays video. With stocks trading flat the entire week, consolidation patterns formed in a number of key ETFs. Chart 1 shows the Nasdaq 100 ETF (QQQQ) surging above its summer highs and then consolidating around 49 this week. QQQQ gapped... READ MORE
STOCKS STALL, BUT NO SIGNS OF WEAKNESS YET... Link for todays video. Stocks finished mixed on Wednesday with large-caps edging lower, small-caps edging higher and the Nasdaqs finishing fractionally lower. Chart 1 shows the NY Composite ($NYA) stalling around 7300 on Wednesday. The overall trend is clearly up with a... READ MORE
NYSE COMPOSITE INDEX RESUMES UPTREND ON RISING VOLUME -- SMALL CAPS BREAK OUT... After opening lower this morning, stocks turned in a positive chart day. All of the major stock indexes closed at or near new recovery highs. And they did so on rising volume, which is a healthy combination.... READ MORE
HIGH YIELDING GROUPS ARE MARKET LEADERS... With US rates at or near record lows, investors have been favoring stock groups that pay dividends in excess of bond yields. I addressed this issue on August 12 with a message headlined: "Dividend Paying Stocks Like Utilities and Telecom Do Better in... READ MORE
FINANCIALS LEAD LATE SELL-OFF IN STOCKS... Link for todays video. After bouncing around most of the day Monday, stocks were hit with selling pressure in the final hour and the S&P 500 closed near its lows for the day. Chart 1 shows the S&P 500 edging... READ MORE
CRB INDEX HITS EIGHT-MONTH HIGH... I wrote on Thursday that a falling US Dollar Index was bullish for commodities (and stocks tied to commodities). Chart 1 shows the USD hitting another eight-month low on Friday. Right on cue, the CRB Commodity Index broke out to a new eight-month high on... READ MORE
NASDAQ HOLDS BREAKOUT AS RESISTANCE TURNS SUPPORT... Link for todays video. The Nasdaq broke above its July-August highs with the September surge and broken resistance turned into support this week. After breaking resistance around 2300, chart 1 shows the index pulling back mid week and then surging on Friday. Broken... READ MORE
DOW TRANSPORTS HAVEN'T BROKEN... A lot has been written about the recent upside breakout in several market indexes. Unfortunately, the upside breakout took place on relatively light volume and hasn't shown much follow-through. I suspect that part of the reason for the lack of bullish follow-through... READ MORE
SEMIS CONTINUE TO LAG BROADER MARKET... Link for todays video. The Semiconductor HOLDRS (SMH) stands out as a clear laggard over the last few months. Most broad market indices moved above their summer highs, but SMH did not even come close. In addition, note that the Networking iShares (IGN), the... READ MORE
SPY BREAKS ABOVE NECKLINE RESISTANCE... Link for todays video. There are some classic chart patterns at work in the major index ETFs. First, the S&P 500 ETF (SPY) has an inverse head-and-shoulders pattern that is being confirmed with todays advance. This pattern is also present in the Nasdaq... READ MORE
I wrote on Tuesday that strength in foreign currencies (especially commodity currencies like the Aussie and Canadian Dollars) was negative for the U.S. Dollar but positive for most commodities. One reason for that view is that stronger foreign currencies suggest growing confidence in the global economy. Another sign of... READ MORE
OFFENSIVE SECTORS LEAD SEPTEMBER SURGE... Link for todays video. Leadership from the four key offensive sectors makes the September surge all the more impressive. Consumer discretionary, finance, technology and industrials are considered the offensive sectors. Leadership from at least 2 of the 4 is needed for a rally to have... READ MORE
BASIC MATERIALS LEAD MARKET RALLY... I wrote on Tuesday that strength in foreign currencies (especially commodity currencies like the Aussie and Canadian Dollars) was negative for the U.S. Dollar but positive for most commodities. One reason for that view is that stronger foreign currencies suggest growing confidence in the... READ MORE
SMALL-CAPS AND TECHS LEAD MARKET HIGHER... Link for todays video. Buying pressure continued on Wednesday with the Russell 2000 ETF (IWM) and the Nasdaq 100 ETF (QQQQ) leading the major indices higher. John Murphy wrote about the S&P 500 testing neckline resistance yesterday. Today, the Nasdaq 100 ETF... READ MORE
FOREIGN STOCKS LEAD US HIGHER... One of the reasons I've turned more bullish on the U.S. stock market is the relatively strong performance in foreign shares. Look at Chart 1 which compares EAFE Index iShares (red line) to the S&P 500 (green line) over the... READ MORE
PRECIOUS METAL BREAKOUTS ... I've devoted the last two Tuesday's to bullish articles on precious metals. This Tuesday is no exception. That's because precious metal assets are surging through important resistance barriers today to achieve bullish breakouts. Chart 1 shows the Gold Trust Shares (GLD)... READ MORE
QQQQ AND SPY SURGE INTO RESISTANCE... Link for todays video. Chart 1 shows the Nasdaq 100 ETF (QQQQ) gapping higher on Monday and moving into a resistance zone from the June-August highs. With todays advance, the ETF is up around 3.5% from its August closing lows. Also notice that... READ MORE
S&P 500 GRAVITATES TOWARDS RANGE RESISTANCE... Link for todays video. The markets continue to move from risk-on to risk-off market modes over the last few months. Swings in the stock market appear to be a major factor in these mood swings. Chart 1 shows the S&P... READ MORE
S&P 500 MOVES UP TO CHALLENGE 200-DAY LINE... My message from last Thursday described a potential "head and shoulders" bottom forming in the S&P 500 with the August low looking like a "right shoulder". That potentially bullish pattern suggests that the market... READ MORE
IWM HITS RESISTANCE AND STALLS ... Link for todays video. Despite leading the market lower the last few months, small-caps led the market higher over the last two weeks. However, chart 1 shows the Russell 2000 ETF (IWM) running into resistance around 64 over the last few days. Resistance in this... READ MORE
SILVER LEADS TEST OF 2010 HIGHS... I wrote a bullish message on precious metal assets last Tuesday which showed gold and silver prices nearing test of their 2010 high. That test has come a bit sooner for silver. Chart 1 shows Gold Trust Shares moving closer to its June high... READ MORE
Today's message is going to represent a shift in emphasis in favor of stocks. As you know, I've been writing since the spring about the huge move into bonds and out of stocks owing to fears of economic slowdown and deflation. I've also written... READ MORE
YIELDS RISE AND BONDS FALL ON JOBS REPORT... Link for todays video. A better-than-expected employment report combined with positive revisions to July weighed on bonds. Bonds surged in August as the double-dippers took center stage. Sign of weakness in the economy favor lower interest rates and lose monetary policy. Todays... READ MORE
IS A HEAD AND SHOULDERS BOTTOM FORMING IN STOCK?... Today's message is going to represent a shift in emphasis in favor of stocks. As you know, I've been writing since the spring about the huge move into bonds and out of stocks owing to fears of... READ MORE
DIA AND QQQQ FILL THEIR GAPS WITH BREAKOUTS... Link for todays video. Stocks moved sharply higher on Wednesday with a broad advance that lifted most boats. All major indices were up sharply. All sectors were higher with the biggest gains coming from industrials, energy, finance and consumer discretionary. Chart 1... READ MORE
GOLD AND SILVER ETFS CONTINUE TO RISE... With stocks and most commodities on the defensive, money continues to move into precious metal assets. As a result, gold and silver prices are higher again today. Chart 1 shows the Gold Trust Shares (GLD) approaching a test of their summer highs. Chart... READ MORE
SMALL-CAPS LEAD MARKET LOWER... Link for todays video. Stocks moved broadly lower on Monday with small-caps leading the way. The Dow fell around 141 points to test the 10,000 mark at the close (-1.4%). The S&P 500 and Nasdaq were both down around 1.5%. The... READ MORE
RUSSELL 2000 ETF TESTS JULY LOW ... Link for todays video. The Russell 2000 ETF (IWM) is the first of the major index ETFs to test its July low. We have been talking about relative weakness in small-caps and this is just further evidence. The Dow SPDR (DIA) and S&... READ MORE
RISING YEN PUSHES NIKKEI TO NEW LOW... A rising Japanese yen is normally bad for Japanese stocks. Chart 1 demonstrate their inverse relationship. It shows the the Nikkei 225 (orange line) falling below 9000 for the first time in more than year which makes it the weakest of the world&... READ MORE
EXPANDING ON THE RISK-ON RISK-OFF TRADE... Link for todays video. John Murphy and I have been writing a lot on the movement away from risk in favor of relative safety. I showed a PerfChart on August 6th showing the beginnings of a shift from the risk-on trade to risk-off trade.... READ MORE
TRANSPORTS LEAD INDUSTRALS LOWER ... We've been writing about a lot of negative stock market signals of late which include bearish chart action, as well as recent rotations out of small caps and technology and into traditionally defensive groups (that pay dividends). This morning's message will focus... READ MORE
A BEARISH ABC COUNT FOR THE S&P 500 ... Link for todays video. It is time to open Pandoras box with some Elliott Wave analysis of the S&P 500. To smooth the data and filter out the noise, I am using a 5-day exponential moving average for... READ MORE
It's usually a bad omen for the market when small caps and technology stocks are underperforming -- as they're doing at present. Chart 1 shows the Russell 2000 Small Cap Index trading closer to its July low than its July high. Its falling relative strength line... READ MORE
QQQQ REMAINS ON P&F SELL SIGNAL... Link for todays video. The Nasdaq 100 ETF (QQQQ), S&P 500 ETF (SPY) and Russell 2000 ETF (IWM) capture three important market segments. QQQQ captures technology, IWM reflects the performance of small-caps. SPY covers large-caps and the broader market). As... READ MORE
S&P 500 STILL ON SHORT-TERM SELL SIGNAL ... The last chart I showed on Tuesday was an hourly bar chart of the S&P 500 with Fibonacci lines drawn over the price. The point of the chart was to show where overhead resistance was likely to appear. [That&... READ MORE
ISLAND REVERSALS VIE FOR SHORT-TERM TREND IN SPY... Link for todays video. Even though the month is barely half over, August is full of gaps. Chart 1 shows August starting with a big gap up as the S&P 500 ETF (SPY) surged above 112 to start the month.... READ MORE
SELECT DIVIDEND ISHARES SHOW RELATIVE STRENGTH... My last message suggested that dividend paying stocks (especially telecom and utilities) offered defensive protection in a slowing economy with falling interest rates. The DJ Select Dividend Index Fund (DVY) offers a simple way to take advantage of that dividend benefit. Chart 1 shows... READ MORE
SEMICONDUCTORS HOLDRS TESTS RANGE SUPPORT... Link for todays video. The Semiconductors HOLDRS (SMH) defines the current state of unusual uncertainty in the stock market. Chart 1 shows SMH locked in a volatile trading range since early May. From low to high or high to low, the ETF has moved 10%... READ MORE