NEW LOWS OUTPACING NEW HIGHS... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The 10-day simple moving average (SMA) for Net New Highs is a good medium-term indicator to assess broad market strength or weakness. Net New Highs equal new 52-week... READ MORE
A RISING VIX IS USUALLY BAD FOR STOCKS ... On Friday August 29, I wrote a Message about the CBOE Volatility (VIX) and the CBOE Put/Call Ratio (CPC) being too low to support a market rally. As far as I can see, that situation hasn't changed. Chart 1... READ MORE
HOMEBUILDERS AND REITS HAVE STRONG DAY ... The government's weekend takeover of Fannie Mae and Freddie Mac gave a boost to global stocks today. Among the biggest gainers were those related to housing and real estate. Charts 1 and 2 show the PHLX Housing Index and the Dow Jones... READ MORE
STOCKS FIRM AFTER EMPLOYMENT REPORT... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor The Labor Department reported that 84,000 jobs were lost in the month of August. Non-Farm Payrolls have declined for eight straight months now. Incidentally, the S&... READ MORE
BROAD SELLING RATTLES WALL STREET... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor Stocks were broadly lower on Thursday. The major market indices were all down around 3% with remarkably equal declines. Usually, the Nasdaq (techs) and Russell 2000 (small-caps)... READ MORE
SEMIS GET SLAMMED... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor Semiconductor stocks led the technology sector lower with steep losses on Wednesday. Charts 1 and 2 show the Semiconductor HOLDRS (SMH) and Semiconductor PowerShares (PSI) dropping sharply over the... READ MORE
ENERGY STOCKS LEAD THE MARKET LOWER... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor A sharp decline in crude sparked broad selling pressure in energy stocks on Tuesday. The Energy SPDR (XLE) led the sectors lower by declining over 5%... READ MORE
SEPTEMBER IS USUALLY WEAKEST MONTH ... Earlier in the week I wrote that September and October were two of the most dangerous months of the year. A number of readers asked me to elaborate on that. Most seasonal patterns are taken from the Stock Trader's Almanac which contains a... READ MORE
OIL FALLS AND DOLLAR RISES ... A surprisingly strong second quarter GDP report helped the U.S. Dollar turn in another strong day. Chart 1 shows the Power Shares US Dollar Bullish ETF (UUP) closing near a new recovery high today. That continues the dollar uptrend that started a month ago.... READ MORE
STRONGER SECOND QUARTER GDP BOOST MARKET... At midday, the stock market is holding onto some impressive price gains. One of the drivers is stronger-than-expected second quarter GDP growth. Another factor is a strong performance by financials and consumer discretionary stocks. All are showing short-term chart improvement. Chart 1 shows the... READ MORE
QQQQ FINDS SUPPORT AT BROKEN RESISTANCE... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The Nasdaq 100 ETF (QQQQ) found support near its resistance break on Tuesday and bounced with a modest advance on Wednesday. Chart 1 shows the ETF surging... READ MORE
FINANCIALS AND DISCRETIONARY STOCKS ARE FALLING... Little has changed from the market messages that I posted last week. Friday's low-volume bounce was just a minor interruption in the market's deteriorating technical condition. The market is starting the new week on a decided down note, and it&... READ MORE
CRB BOUNCES OFF SPRING LOW... Last week I wrote about the Reuter/Jefferies CRB Index testing chart support at its March low near 380. So far, that support has held. The CRB Index rose nearly 15 points today for one of its biggest gains in years. Chart 1 also shows... READ MORE
CONSUMER DISCRETIONARY STOCKS FAIL IMPORTANT TEST ... Last Friday I showed the Consumer Discretionary SPDR (XLY) testing its 200-day moving average. So far, it looks like that test is failing. Chart 1 shows two unsuccessful attempts to get through the major resistance line over the past week. Charts 2 and 3... READ MORE
TWO SECTOR LEADERS ARE STAPLES AND HEALTHCARE ... Until proven otherwise, the two strongest market sectors are still consumer staples and healthcare. And both are defensive categories. Chart 1 shows the Consumer Staples Select SPDR) trading at a new eight month high after breaking through its spring high. It's... READ MORE
MORE ON SECTOR ROTATIONS... I keep getting questions on where we stand on the matter of sector rotation. We've pointed out repeatedly that defensive stock groups like consumer staples and healthcare have become new market leaders. That makes sense in a slowing economy. Earlier in the week, however,... READ MORE
CONSUMER STAPLES SPDR TURNS UP ... Despite recent signs of improvement in economically-sensitive groups like consumer disretionary stocks, investors still show a preference for more defensive consumer staples. These are stocks that do okay in good times and bad and don't rely on the state of the business cycle.... READ MORE
RETAIL BUYING BOOSTS CONSUMER DISCRETIONARY STOCKS ... On Friday, I wrote about signs of improvement in the consumer discretionary sector which has been benefiting from falling oil prices. I suggested that most of the improvement was coming from homebuilders and retailers. That was certainly true today with both groups having very... READ MORE
EURO COMPLETES DOUBLE TOP ... One of the main intermarket factors behind the recent plunge in commodity markets has been new strength in the U.S. Dollar. That's because commodity prices and the U.S. Dollar trend in opposite directions. In fact, the bull market in commodities since 2002... READ MORE
QQQQ MAKES A BREAKOUT BID... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor Last week I wrote about relative weakness in the Nasdaq 100 ETF (QQQQ) and its inability to break resistance. Chart 1 shows a change afoot. After a sharp... READ MORE
COMMODITY DROP SHOULD EASE INFLATION ... The Fed left the short-term rate unchanged at 2% today as expected. It did, however, cite growing inflation concerns along with a weakening economy. That's a bad combination. Most of the inflation increases, however, have come from rising commodities. With commodity markets in... READ MORE
ALL COMMODITIES ARE IN THE RED ... The CRB Index is trading 12 points lower today with all seventeen commodities in the red. Chart 1 shows the DB Commodities ETF (DBC) falling to a three-month low. The other charts show losses in energy (Chart 2), precious metals (Chart 3), agriculture (Chart... READ MORE
ECONOMISTS ARE LATE AS USUAL... In a recent Market Message, I discussed how the stock market is a leading indicator of the economy and why it isn't a good idea to use economic forecasting to trade the stock market. Historically, the market turns down at least six months... READ MORE
QQQQ SHOWS RELATIVE WEAKNESS ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The stock market bottomed on 15 July and surged over the last 11 trading days. Despite this big surge, performance has been unequal among the major index ETFs. Chart... READ MORE
OIL RESUMES DOWNTREND... A bounce in the dollar today is causing more selling in commodities. Gold, grains, and oil are all falling as a result. A $3 drop in the price of crude has pushed the United States Oil ETF (Chart 1) below its early June low near 100 and... READ MORE
A LOOK AT FOREIGN ETFS... One of our readers asked me to take a look at foreign ETFs. So here they are. Chart 1 shows the EAFE iShares (EFA) having lost 23% from their November peak. That puts them in bear market territory. The EFA chart doesn't look... READ MORE
HEALTHCARE SPDR SHOWS RELATIVE STRENGTH ... Healthcare remains the only defensive group showing relative strength. Chart 1 shows the Health Care SPDR (XLV) moving up to challenge its spring highs. Its relative strength line (below chart) is much more impressive. The RS turned up during May (when the last market rally... READ MORE
RUSSELL 2000 SURGES TO 200-DAY ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The Russell 2000 surged to its 200-day moving average with an extremely sharp move over the last seven days. This small-cap index showed less weakness by holding above... READ MORE
AIRLINE INDEX CLEARS 50-DAY LINE ... Another possible sign that oil prices have peaked was today's spectular rally in airline shares. Chart 1 shows the AMEX Airline Index (XAL) jumping 22% today to make it day's strongest group by far. In addition, the XAL clearled its 50-day... READ MORE
ENERGY IS THE LAST COMMODITY GROUP TO ROLL OVER ... I've gotten a lot of questions regarding my article last week about commodities having entered into a downside correction. One reader asked if there were any commodity ETFs in existence. There are several of them. Chart 1 shows the... READ MORE
SHORT-TERM SELL SIGNALS GIVEN ... This week's downturn in crude oil prices has had a depressing effect on the entire commodity group. Chart 1 shows the CRB Index (plotted through Thursday) breaking a three-month up trendline (and its 50-day moving average). The 12-day Rate of Change (ROC) line (top... READ MORE
CRUDE OIL BREAKS SUPPORT... On Tuesday I suggested that the downside correction in energy shares warned of possible weakening in the price of crude. The drop in energy shares became more serious today. So did the drop in crude. Crude oil fell another $4.91 (-3.6%) today. Chart 1... READ MORE
SMALL-CAPS AND TECHS SHOW RELATIVE STRENGTH ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor It has been a tale of two markets over the last few months. On one side, the Dow Industrials and S&P 500 were weighed down... READ MORE
ENERGY STOCKS CONTINUE DOWNSIDE CORRECTION ... A big drop in energy prices made energy the day's weakest sector. Actually, energy stocks have been correcting for the past two weeks. Chart 1 shows that the Energy SPDR (XLE) broke its 50-day average a couple of weeks back on heavy volume.... READ MORE
FOREIGN CURRENCIES JUMP ... The U.S. Dollar is coming under a lot of pressure. The most significant drop is against the Euro which touched a new record today (Chart 1). In fact, all major currencies are rallying against the dollar. Charts 2 through 4 show upturns in the British Pound,... READ MORE
REGIONAL BANKS TUMBLE ... The rout in financial shares continues. Chart 1 shows Bank Regional Holders tumbling to the lowest level in six years. That contributed to more big losses in the entire financial sector. Chart 2 shows the RHK bearing down on its 2002 lows. As has been suggested herein... READ MORE
TAKING A BIG STEP BACK... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor The stock market is oversold, but just getting even more oversold. Chart 1 shows the Dow Industrials ETF (DIA) moving to a new low for 2008. The... READ MORE
TO BOUNCE OR NOT TO BOUNCE... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor The major indices surged on Tuesday, pulled back sharply on Wednesday and then firmed on Thursday. Needless to say, there is a serious tug-o-war underway between... READ MORE
EASY COME EASY GO ... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor After a big rebound in the financial sector on Tuesday, stocks got cold feet on Wednesday and retreated. The major indices closed sharply lower with small-caps and techs... READ MORE
TECHS AND SMALL-CAPS LEAD MARKET REBOUND ... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor The stock market rebounded on Tuesday with the Russell 2000 ETF (IWM) and the Nasdaq 100 ETF (QQQQ) leading the charge. IWM surged over 3%, while... READ MORE