BMY GAPS UP ON BIG VOLUME ... News that Bristol Myers Squibb reached a settlement calling for delayed production of the generic version of the world's second largest drug pushed the stock 11% higher today and made it the day's strongest stock. Chart 1 shows BMY gapping... READ MORE
RETAIL HOLDERS RESOLVE BULLISH TRIANGLE ... Near the end of February, I wrote a positive piece on the retail sector (February 27, 2006). At the time the Retail Holders (RTH) were testing the upper line in a triangular-shaped pattern which favored an eventual move to the upside. Chart 1 shows that... READ MORE
DOLLAR INDEX BREAKS 200-DAY AVERAGE ... The Dollar Index has taken a turn for the worst this past week. The daily bars in Chart 1 (through Thursday) show the USD falling below its March low and its 200-day moving average. The daily MACD lines are also in negative alignment. That suggests... READ MORE
INDUSTRIALS SPDR INCLUDED TRANSPORTS ... While the Dow Industrials have reached the highest level in four and half years, the Dow Transports are trading at a new record. In today's trading, the transports gained more than 2.0% and were the day's strongest group. In case you&... READ MORE
GOLDMAN SACHS SURGES TO RECORD HIGH... The big brokerage firm reported the biggest profit in the history of Wall Street. As a result, the stock gapped to a new high on very strong volume as shown in the daily bars in Chart 1. The monthly bars in Chart 2 are... READ MORE
TWO DIFFERENT VIEWS ... Last week I wrote an article on sector rotations that suggested that consumer staples were now due to show market leadership. They were in fact the strongest sector last week. Chart 2 gives two views of the group. The black line is the S&P Consumer... READ MORE
LONG-TERM DOLLAR VIEW ... I've long maintained that currency markets represent a separate asset class that most investors don't participate in. Institutions can and do trade cash currencies through interbank arrangements. Futures and options traders can trade foreign currencies on the Chicago Mercantile Exchange or the Dollar... READ MORE
STAPLES COME AFTER ENERGY ... In the latter stages of an economic expansion and and bull market in stocks, basic material and energy stocks take over market leadership. We've seen that over the last two years. Energy stocks are usually the last group to peak at a market top.... READ MORE
RISING RATES HURT RISKIER MARKETS ... This week's upside breakout in U.S. bond yields, and prospects for more global tightening of short-term rates, takes a toll on riskier markets. That certainly includes emerging markets which are falling hard today with average losses of 3%. What's more,... READ MORE
BOND BREAKOUT ... Last Friday I showed the yield on the 10-year T-note testing its 2004 highs. It broke through those highs today. Chart 1 shows the TNX trading over 4.70% for the first time since the middle of 2004 (see red circle). That appears to leave little doubt that... READ MORE
WHY BULLION CAN LEAD GOLD STOCKS FOR A TIME... Earlier in the week I made the observation that, at the moment, bullion might be a better bet than gold stocks. Naturally, I got a lot of e-mail questioning that view. After all, I've written in the past that... READ MORE
CISCO BREAKS OUT ON BIG VOLUME ... Although most technology stocks rallied today, Cisco was the chart standout. Chart 1 shows why. The big networker broke through its summer 2005 highs and it's done so on sharply higher volume. That's a bullish combination. Its relative strength line... READ MORE
ECB EXPECTED TO RAISE RATES... This Thursday we have an interest rate decision from the European Central Bank. It is widely expected that it will increase the European rate at that meeting. It's likely that the recent bounce in the Euro is in anticipation of that expected rate... READ MORE
GOOGLE FALLS ON BIG VOLUME ... Today's market selloff can't be blamed entirely on Google. There were other factors at work as well. But the plunge in Google didn't help. A disappointing forecast sent the huge Internet stock plunging over $30 today on huge volume.... READ MORE
RETAIL HOLDERS TEST RESISTANCE LINE... In an article on Regional Banks Holders last Wednesday, I incorrectly used the symbol RTH instead of the correct RKH. I showed the right chart, but typed the wrong symbol. Maybe my subconscious mind was at work because today I'm writing about the... READ MORE
CRB INDEX STAYS OVER 200-DAY LINE... Earlier in the week we showed the Reuters/Jefferies CRB Index bouncing off its 200-day moving average. After dipping back on Thursday, it rallied again at week's end. Thirteen of the nineteen commodities in the CRB bounced on Friday with most of... READ MORE
BANK BREAKOUT ... Some good things happened to the market today. One of them was a bullish breakout in bank stocks. Earlier today I showed the Bank Regional Holders (RTH) hitting a new record high (February 22, 2006). They were the day's strongest ETF. Chart 1 shows the bullish... READ MORE
FINANCIALS ARE DAY'S STRONGEST SECTOR ... Judging from today's strong surge in the financial sector, it seems that the market is encouraged by the January core CPI inflation rate of 0.2% and less concerned about the threat of rising interest rates. That would explain today'... READ MORE
TWO WAYS TO MEASURE MARKET BREADTH... One of our readers asked me to explain the difference between the NYSE Advance-Decline line and the NYSE Bullish Percent Index. They both tell us something about market "breadth", but in different ways. Chart 1 shows the NYSE AD line which is... READ MORE
CRB UPTREND IS STILL INTACT... It was in October of 2001 that the Reuters/Jefferies CRB Index started the four-year rally that continues to this day. During that period, we've seen steep rallies followed by downside corrections or periods of consolidation. Two things,however, have remained constant. One... READ MORE
KEYSPAN LEADS UTILITY BOUNCE ... Although utilities are usually thought of as being interest-rate sensitive, they're being heavily influenced by the trend of energy stocks -- and natural gas stocks in particular. Today is a good example of that. News that KeySpan, which is the largest natural gas seller... READ MORE
WHY I USE THEM ... As you know, I place a lot of importance on moving average lines. Not because they're infallible, because they're not. Or because they're the most important of all the indicators I look at. Because they're not. For people... READ MORE
BIOTECH HOLDERS MOVE UP ... Over the last week, I've shown bullish breakouts in two telecom ETFs (TTH and IYZ) and the strong upturn in Retail Holders (RTH). The biotech group has moved into third place over the last week in the relative strength rankings. The weekly bars in... READ MORE
DOW CLOSES BACK OVER 11K... The Dow Industrials continue to show new market leadership. Today's strong close put it back over the 11,000 level for the first time since mid-January. The monthly bars in Chart 2 put that in better perspective. A Dow close over 11047 would... READ MORE
JANUARY RETAIL SPENDING JUMPS 2.3% ... The market is being helped by at least two factors today. One is the continuing drop in crude oil prices to the lowest level in 2006. While energy stocks are the day's weakest group, retailers are one of the day's... READ MORE
CRB INDEX BREAKS 50-DAY LINE ... The sharp slide in commodity markets that started last week continued into Monday trading. Today's four point loss has pushed the Reuters/Jefferies CRB Index to the lowest level for 2006. It broke its 50-day average on Friday and now appears headed toward... READ MORE
GOLD CONTINUES DOWNSIDE CORRECTION ... Gold stocks fell again on Friday to continue the downside correction that began late last week. The daily bars in Chart 1 show the Gold & Silver (XAU) Index heading down toward its 50-day day moving average. This week's downturn in the XAU (and... READ MORE
SMALL CAPS ARE STARTING TO SLIP ... One of the more subtle changes that took place this past week was slippage in small cap stocks. The slippage wasn't substantial; nor has there been any serious chart damage done. But it's something that bears watching. That's... READ MORE
S&P 500 CLIMBS BACK OVER 50-DAY LINE -- FOREIGN ETFS ARE EVEN STRONGER ... Chart 1 shows the S&P 500 climbing back over its 50-day moving average in afternoon trading. That's a positive sign and suggests that the short-term decline of the last month has... READ MORE
TELECOM HOLDERS HIT 52-WEEK HIGH ... Here's a group that I seldom write about. The reason I'm writing about it now is that it's the strongest group in the market over the last week. Chart 1 tells the tale. Telecom Holders (TTH) have broken through... READ MORE
HOUSING INDEX BREAKS 200-DAY LINE ... A bad earnings report from Toll Brothers (which hit a new 52-week low) made a bad situation worse for the homebuilding group. The five homebuilders in the S&P 500 suffered losses averaging 3.5% on the day. Each of the stocks are trading... READ MORE
NATURAL GAS INDEX STALLS AT PREVIOUS PEAK... Last Thursday I showed the Natural Gas Index (XNG) pulling back from its late-September peak and suggested that it was leading an energy pullback. With natural gas prices falling to a six-month low, and crude down to the lowest level in a month... READ MORE
XAU PULLS BACK FROM OLD HIGHS... Last Friday I issued a short-term warning on gold and gold stocks based primarily on Chart 1 which showed the Gold & Silver (XAU) Index up against major overhead resistance at its 1996 and 1987 highs near 155 (February 03, 2006). I suggested that... READ MORE
EDITOR'S NOTE... Jeanette Schwarz Young contributed to this article. Ms. Young is a trader on the New York Board of Trade with special expertise on commodity markets. In the coming weeks, you can expect to see more joint articles from her and myself. - John Murphy IT'... READ MORE
AMAZON AND GOOGLE FALL HARD... It wasn't hard to see where most of the damage in the Nasdaq 100 came from today and the past week. Two of the biggest weekly losers were Amazon.com (-15%) and Google (-12%). The ugly chart damage can be seen in Charts... READ MORE
XAU INDEX REACHES MAJOR RESISTANCE ... Earlier in the week I showed a chart of Newmont Mining trading over its 1996 high at 60. [It's since dipped back below that level]. Chart 1 shows a long-term chart of the Gold & Silver (XAU) Index. And therein lies a short-term... READ MORE
RESPONSE TO QUESTIONS ... I've made several references to the strong performance of inflation-sensitive stocks. Apparently, there are a lot of readers who don't know what they are. Inflation-sensitive stocks are those that are tied to rising commodity prices. The most obvious are gold (precious metal) stocks,... READ MORE
MARKET TURNS DEFENSIVE ... Two of the factors that have helped keep inflation under control are rising worker productivity and low labor costs. But that may now be changing. Fourth quarter worker productivity fell for the first time in five years. At the same time, labor costs rose for the first... READ MORE
U.S. STEEL NEARS RECORD HIGH... Stocks tied to basic materials continue to gain ground on the back of the ongoing commodity rally. The Materials Select SPDR (XLB) was the only sector ETF to hit a new 52-week high today while most others fell. One of the day's... READ MORE
MATERIALS ARE WEEK'S TOP SECTOR ... There's generally a pretty close correlation between the direction of commodity prices and basic material stocks that are tied to those commodities. I've suggested in the past that one way to participate in the commodity bull market is through... READ MORE