STRONG RETAIL NUMBERS AND IMPORT PRICES ... The market is having second thoughts about the Fed being done with its rate hiking. A strong retail report today and a big jump in import prices suggest that the economy and inflation may be a little stronger than expected. I agree with the... READ MORE
GOLD ETF NEARS WEEKLY BUY SIGNAL ... I suggested yesterday that gold could be one of the biggest beneficiaries of Fed inaction on rates. That was predicated on my view that the dollar would weaken. In today's trading, the dollar is indeed dropping and gold prices are rising. This... READ MORE
RETAILERS AND HOMEBUILDERS FALL... The Fed paused today as pretty much everyone expected. Unfortunately, the stock market fell on the news. Part of the reason may have had to do with the wording of the accompanying statement. The Fed acknowledged economic slowing, especially in the housing sector. Its claim (or... READ MORE
BOND YIELDS HIT FOUR-MONTH LOW... The U.S. economy added fewer jobs than expected during July and the unemployment report rose for the first time in five months to 4.8% from 4.6%. The weak job report is the latest in a string of signs that the economy is... READ MORE
US DOLLAR IS ROLLING OVER ... Recent reports of economic weakening, combined with diminished expectations for additional rate hikes by the Fed, are causing selling in the dollar. Chart 1 (plotted through Tuesday) shows the U.S. Dollar Index starting to roll over to the downside over the last week. The... READ MORE
NATURAL GAS SPIKES ON HOT WEATHER... While everyone has been looking at the rising price of crude oil and gasoline, natural gas prices have declined for most of the year -- until the last week. Unusually hot weather conditions have produced an impressive spike in natural gas prices which climbed... READ MORE
SECOND QUARTER GDP DROPS SHARPLY... Today's report that U.S. second quarter growth fell to 2.5%, which is less than half of the first quarter's +5.6%, carries both good and bad news. The bad news is that the economy is slowing. The good news... READ MORE
FEDEX LEADS TRANSPORTS LOWER ... The transportation sector continues to get battered. Yesterday we showed UPS and a couple of rail stocks falling below their 200-day lines. Today's most notable casualty is FedEx. Chart 1 shows that stock breaking both its 200-day line and its June low. Even an... READ MORE
DOW INDUSTRIALS VS. INDUSTRIALS SPDR ... I've written several times over the past few months that the Dow Industrials were holding up a little better than the rest of the market, and interpreted that to mean that investors were switching from riskier small cap stocks into more stable industrials.... READ MORE
AT&T HITS NEW FOUR-YEAR HIGH ... Although the market remains in a short-term rally mode, upside leadership keeps coming from traditionally defensive groups. Today's standout Dow performer was AT&T which surged to the highest level in four years. The daily bars in Chart 1 show... READ MORE
HEALTHCARE IS GETTING BETTER... On Friday I wrote about how the big pharmas were attracting some serious money and were starting to pull the entire healthcare sector higher. I showed the daily chart of the Health Care Sector SPDR (XLV) and suggested that it needed a close over its 200-day... READ MORE
DRUGS LEAD HEALTHCARE HIGHER... Whenever we list defensive groups that usually do better when the market gets into trouble, the usual candidates are consumer staples, utilities, and healthcare. Consumer staples and utilities have continued to be the market's top performers over the last couple of months. It looks... READ MORE
MARKET LIKES FED COMMENTS ... The bond and stock markets liked what Mr. Bernanke had to say today before Congress. He indicated that economic growth and inflation were moderating which was taken to mean that the Fed might be nearing the end of its rate hikes. Bond prices rose and yields... READ MORE
DOLLAR BUYING PUSHES GOLD LOWER ... Yesterday saw the first serious selling of gold and silver in more than a month. Part of that selling is due to technical factors. Part of it is also due to a rising dollar. While geopolitical concerns have helped boost gold and oil prices recently,... READ MORE
HOMEBUILDERS CONTINUE TO CRUMBLE... Yesterday I wrote about how relative weakness in retail stocks over the last year was an early sign that higher energy prices and rising interest rates were starting to hurt the economy and the stock market. It was reported this morning that June's retail... READ MORE
CRUDE EXCEEDS $76... Crude oil surged $1.70 today to reach a new all-time high. A lot of that had to do with mideast tensions. It also had a lot to do with the big drop in oil inventories reported on Wednesday. And the fact that oil, like most commodities,... READ MORE
S&P RETESTS 200-DAY AVERAGE ... This is as good a time as any to take another look at a variety of moving average lines and signals. I'm going to show three different ways to do that. The first is the usual 50- and 200-day moving averages. The... READ MORE
DIVIDEND ETF IS OUTPERFORMING ... Last Friday I showed a few defensive groups that were showing upside leadership including consumer staples, pharmaceuticals, and utilities. Here's another one. Chart 1 is a daily bar chart of the DJ Dividend Index iShares (DVY) through the first six months of 2006. The... READ MORE
A RECIPE FOR STAGFLATION ... The June employment report gave a double dose of bad news to the stock market today. First of all, June job growth was very weak. That hinted at economic slowing. At the same time, June wages jumped at the fastest rate in five years. That'... READ MORE
CRB INDEX CLEARS 50-DAY LINE ... Commodity markets continue the new rally that began with the recent bounce off their 200-day moving average. Today's gain has pushed the Reuters/Jefferies CRB Index back above its 50-day moving average. Fourteen of the nineteen commodities are in the black with some... READ MORE
GASOLINE LEADS COMMODITY MARKETS HIGHER ... Commodity markets rose again today. The most bullish action occurred in the gasoline pits. Chart 1 shows the continuous futures contract for unleaded gasoline breaking out to a new ten-month high. Crude oil rose another $1.35 to close at 73.50. That's... READ MORE
GASOLINE TESTS YEARLY HIGH ... One of the things the Fed will most likely be looking at today and tomorrow is the price of oil, gasoline, and most other commodities. They'll do that to get some clue as the future direction of inflation (and the economy). They won'... READ MORE
MARKET ON FED WATCH ... Very little has changed over the last few trading days. The market has been attempting a modest price bounce to work off a short-term oversold condition. Major market averages (with the exception of the Dow) have been unable to regain their 200-day moving averages. The fact... READ MORE
SHORT-TERM TREND STRENGTHENS ... The market is ending the week on a firm note. That's largely due to a short-term oversold condition and improvement in short-term market indicators. Chart 1 shows the daily MACD lines turning positive on the S&P 500 for the first time in a... READ MORE
NEW HIGH FOR YIELDS ... The yield on the 10-year Treasury Note touched a new four-year high today. The weekly bars in Chart 1 show that the uptrend in long-term interest rates began exactly a year ago. The fact that bond yields were headed higher was confirmed in the spring of... READ MORE
MORGAN STANLEY LEADS BROKERS HIGHER ... Strong second quarter earnings by Morgan Stanley has pushed the brokerage stock up nearly 5% today and is leading a rally in that group and the market in general. Chart 1 shows the stock gapping back over its 200-day moving average on rising volume. Chart... READ MORE
CONSUMER STAPLES ARE DAY'S TOP SECTOR... With today's stock market rally fading again, investors continued to favor the defensive qualities of consumer staples. That made consumer staples the day's top sector. That's nothing new. Chart 1 shows the Consumer Staples Sector SPDR... READ MORE
TELECOM HOLDERS ARE HAVING A GOOD YEAR ... With the market selloff that started in May, a lot of defensive groups have attracted new money -- including consumer staples and utilities. The telecommunications group belongs on that list. Chart 1 shows why. Telecom Holders (TTH) have been one of the top... READ MORE
BULLISH PERCENT INDEX SUGGESTS A BEAR ... The most difficult thing to determine in market analysis is the difference between a market correction and the start of a bear market. They look pretty much the same. Prices fall to an area of chart support (usually around the 200-day moving average), get... READ MORE
BOND PRICES ARE FALLING AGAIN ... For the second day in a row, core inflation numbers came in higher than economists were expecting. Yesterday it was the PPI. Today's core CPI reading for May rose to 0.3%. [The actual CPI rose .4% during May]. Core inflation (excluding food... READ MORE
LEHMAN BREAKS 200-DAY AVERAGE ... We've been showing a lot of markets threatening or breaking their 200-day moving averages lately. Here's another one. Despite a 47% jump in second quarter earnings, Lehman Brothers has fallen 4% and, in so doing, has broken its 200-day moving average. That&... READ MORE
NYSE STILL SITTING ON 200-DAY LINE ... Friday's market action didn't tell us much about the staying power of Thursday's afternoon bounce. Market averages closed modestly lower in lighter trading volume. The good news is that the NYSE Composite Index remains on top of its... READ MORE
DOW AND NYSE INDEXES CLOSE ABOVE 200-DAY LINES ... An afternoon comeback avoided a serious market breakdown. Chart 1 shows the Dow Industrials closing 8 points higher after heavy losses this morning. More importantly, the Dow closed on top of its 200-day moving average. Chart 2 shows the NYSE Composite Index... READ MORE
GLOBAL BREAKDOWN... Rate hikes by central bankers in Europe and Asia (and more hawkish comments from Fed officials) have pushed most global stocks below their 200-day moving averages. Among the hardest hit are emerging markets like Latin America which are tied to commodity prices which are also falling. Chart 1... READ MORE
BEAR FUNDS ARE STILL RISING... A number of readers have asked for an update on a couple of bear funds that I recommended in mid-May. As you might expect, they've been rising as the market has been falling. Chart 1 shows the ProFunds Short OTC Fund (plotted through... READ MORE
FIRMER DOLLAR PUSHES COMMODITIES LOWER... Although commodities have been the strongest asset class since 2002, and while they remain in a major uptrend, they're not immune to a downside correction. We may be seeing the start of one right now. One hint at that is the recent heavy... READ MORE
HOUSING INDEX HITS NEW 52-WEEK LOW ... More bad news on the housing front pushed the PHLX Housing Index to the lowest level in eighteen months. The weekly bars in Chart 1 leave little doubt that housing stocks have peaked. The recent breaking of the late 2005 lows has left a... READ MORE
CRB INDEX STAYS OVER 50-DAY LINE ... The Reuters/Jefferies CRB Index jumped seven points today to close at 350. As Chart 1 shows, that keeps the CRB above its 50-day moving average. Chart 1 also shows that very little damage has been done to the commodity uptrend. While most of... READ MORE
THE DOW IS BACKING OFF FROM 2000 PEAK ... Whenever the market is at an important inflection point, it's usually a good idea to take another look at long-term charts. Not that short-term trends aren't important. But longer-term trends are more important. That's why I... READ MORE
VIX CONTINUES TO CLIMB ... We've produced a number of articles recently showing the CBOE Volatility (VIX) Index climbing to a new two-year high and warned about the danger that poses for the stock market. That's because the market usually trends in the opposite direction of the... READ MORE