S&P HOLDS 50-DAY LINE ... As you know, I've been expecting the S&P 500 to fall below its 50-day average. It dipped beneath it yesterday intra-day before closing just above it. Today it bounced off it pretty impressively. While that doesn't completely rule... READ MORE
HOMEBUILDERS DRAG MARKET DOWN ... A weaker-than-expected report on home sales for the month of December is causing heavy selling in homebuilding stocks. That in turn is helping to pull down the rest of the market which is in a weak technical condition to begin with. From a charting standpoint, the... READ MORE
DOW AND NASDAQ ETFS ARE STILL BELOW 50-DAY LINES... The modest price bounce of the last two days has done little to reverse the downside momentum created by last week's high-volume price drop. For one thing, this week's bounce has been on relatively light volume as... READ MORE
DOW DIAMONDS BREAK 50-DAY LINE AND DECEMBER LOW ... Thanks mainly to a huge plunge in Citigroup and General Electric, the Dow Industrials had a terrible chart day. Chart 1 shows the Dow Diamonds (DIA) shattering its 50-day moving average and falling to the lowest level in more than two months... READ MORE
DOW BREAKS 50-DAY LINE ... The Dow is the first of the major stock indexes to break its 50-day moving average. If that pattern continues through the balance of the day, it would be the first legitimate sell signal since last October. Although the Nasdaq and the S&P 500... READ MORE
SOX CLIMBS 3.4% AND BOOSTS SMH ... Last evening I suggested that the ability of the Semiconductor (SOX) Index to end in positive territory after early selling was a positive sign. That positive tone has carried into today's trading in a big way. Thanks to good news from... READ MORE
INTEL IS BIGGEST STOCK IN THE SMH ... Today's plunge in Intel has been devastating to its chart pattern. Chart 1 shows the chip and technology bellwether plunging nearly 3 points (-12%) on very heavy volume. The stock is now threatening its fourth quarter low. That helped make the... READ MORE
CRUDE TOPS $65 -- XLE HITS RECORD HIGH ... Crude oil continues to climb after recently breaking through its mid-December peak at 62. That upside breakout signaled that the downside correction starting in early September had been completed and that its intermediate trend had turned higher. Rising crude prices are good... READ MORE
DOLLAR TREND CONTINUES TO WEAKEN ... The weekly chart of the U.S. Dollar Index shows that the 2005 rally stopped at the spring 2005 peak just above 92. At the same time, the weekly MACD lines have "double topped" and turned negative. The USD has also broken an... READ MORE
VIX AT LOWEST LEVEL IN A DECADE... Despite the market's getting off to a strong start in the new year, I've maintained a generally cautious view on the market's long-term trend. Part of that is based on the length of this bull market which... READ MORE
ADVANCE-DECLINE LINE HITS NEW HIGH ... Back in December I expressed concern about the fact that the NYSE Advance-Decline line remained beneath its August/September highs which was creating a "negative divergence" with the NYSE and S&P 500 indexes which had broken through those highs during the... READ MORE
CONCENTRATING ON STRENGTH ... The market is starting the new year with a bang. Virtually all of the major market averages have risen to new 52-week highs. Some of that new optimism is the result of the Fed minutes released earlier in the week hinting that it might be close to... READ MORE
TAIWAN AND SEMICONDUCTOR ISHARES ARE DAY'S LEADERS ... As you've probably figured out by now, I try to look for meaningful linkages behind the day's headlines and the movements in various markets. One such linkage is evident in today's trading. Domestically, the day&... READ MORE
DOLLAR WEEKLY CHART LOOKS TOPPY ... In writing about the drop in the U.S. dollar yesterday I mentioned that its weekly chart also looked toppy. I was referring to the chart that I showed back in mid-December accompanied by the headline: "Record Trade Deficit Weakens Dollar at Major Resistance... READ MORE
2:00 RELEASE BOOSTS MARKET ... The minutes of the Fed's December meeting carried wording that future rate hikes would probably not be large and that inflation pressures were well contained. That hint that the Fed might be near the end of their tightening campaign turned what had been... READ MORE
OIL CLIMBS OVER $63... Crude oil (and most other commodities) are starting the new year on a strong note. Crude oil is climbing more than $2 and is trading over $63 for the first time in more than two months. Gold is trading $11 higher while the CRB Index is... READ MORE
REPEATS OF EARLIER MESSAGES... Yesterday I presented a long-term bullish case for the gold market. Today I'm going to try to do the same for Japan. First of all, I have to remind some newer readers that my bullish attitude on Japan isn't new. I started... READ MORE
LONG-TERM TREND NOW FAVORS GOLD ... I've written articles about why I'm a long-term bull on gold, but I thought it worth revisiting as we approach the end of the year. Gold is also my favorite stock group for the coming year. Chart 1 is a ratio... READ MORE
THERE MAY BE NO SANTA CLAUS THIS YEAR ... In case you're confused about what the traditional Santa Claus rally is, it's the tendency for the market to rise in the week between Christmas and New Years. Judging from today's selling in stocks, there'... READ MORE
JOHN'S LATEST PERFORMANCE CHART ... John's Latest Performance Chart ranks the best and worst groups over the last month. Basic materials, gold, and oil service stocks have benefited from firmer commodity prices. Other sector leaders include healthcare, utilities, and consumer staples. It's worth noting that... READ MORE
HEADED TOWARD LOWER BAND... The price of gold fell $7.85 today to close below $500 for the first time in a month. Chart 1 shows the recent chart action for the Gold Trust Shares (GLD). It closed at $49 today which is the equivalent of $490 for bullion. The... READ MORE
NYSE ADVANCE DECLINE HASN'T HIT A NEW HIGH ... Like most other market analysts, I've been expecting the traditional fourth quarter market rally. On Tuesday, after the Fed hinted that it might be nearing the end of its rate-hiking, I wrote that the two-week correction/consolidation appeared... READ MORE
GOLD PULLS BACK WHILE YEN JUMPS ... On Monday I revisited the positive relationship between gold and the Japanese market. I suggested that both still looked overbought to me, but would probably need to correct together. Gold started its downturn yesterday which has continued today. Chart 1 shows the Gold Trust... READ MORE
FED DROPS REFERENCE TO ACCOMODATION ... The Fed raised short-term rates another quarter point today to 4.25% as expected. However, it dropped its reference to "policy accommodation". The market took that to mean that the Fed may be nearing the end of its tightening cycle. Whether that'... READ MORE
NEITHER ONE HAS CORRECTED ... A couple of weeks ago I expressed some concern that gold prices might stall or pullback temporarily from long-term supply around $500. Obviously, that didn't happen. Gold has since jumped another $40 to a new 24-year high. It was up over $10 earlier today.... READ MORE
DOW LOSES MORE GROUND ... The market lost more ground today. The Dow Industrials fell 55 points to close at 10755. That puts it within 55 points of its summer highs near 10700. The market got hit with two negatives today. One was a sizeable pullback in semiconductors which had recently... READ MORE
DOW BACKS OFF FROM 11000 ... Chart 1 shows some chart reasons why the Dow Industrials are pulling back. First of all, the Dow reached its spring high (10984) in an overbought condition. That's seen in the 9-day RSI line (top of chart) which moved into overbought territory over... READ MORE
SEMIS CONTINUE TO CLIMB ... The Semiconductor (SOX) Index is gaining more than 2% today to continue its uptrend and its recent market leadership. Chart 1 shows the SOX reaching a new 52-week high today. Just last week it broke through its summer high to achieve a bullish breakout. It'... READ MORE
YIELDS ARE BOUNCING OFF SUMMER HIGHS... After pulling back during the month of November, bond yields are starting to climb again. More importantly, they're bouncing off the previous peaks hit during August. That's important in chart work because short-term pullbacks shouldn't fall below previous... READ MORE
INDUSTRIALS STILL BELOW 2005 HIGH ... One of the oldest technical approaches is the Dow Theory. It simply holds that upside breakouts in either the Dow Industrials or the Dow Transports must be confirmed by the other to signal the start or the resumption of the major bull trend. In this... READ MORE
BUYING CYCLICALS ... On Tuesday I showed the Materials Select SPDR (XLB) breaking through its summer high to achieve a bullish breakout. Materials were today's second strongest group just behind energy. Although there may be some inflationary meaning behind the new buying in these stocks, there's a... READ MORE
SMALL CAP BREAKOUT ... Earlier in the week I suggested that the fourth quarter market advance was being stalled partially by the inability of small cap stocks to break through their summer highs. That inability is being corrected today. Charts 1 and 2 show the S&P 600 Small Cap... READ MORE
DOW IS OVER-EXTENDED ... Yesterday I wrote about the Dow Industrials running into some selling along its early 2005 peak just below 11,000. I also mentioned it being over-extended. That can be plainly see in the 9-day RSI line which is well into overbought territory over 70. That's... READ MORE
MATERIALS SPDR TURNS UP ... Basic material stocks are the day's strongest sector. Chart 1 shows the XLB having already broken through its summer high to reach the highest level in seven months. The relative strength ratio, which peaked in March, has also bottomed. Most of today's... READ MORE
HEAVY RETAIL SELLING... With the holiday shopping season upon us, all eyes are focused on retailers. For today at least, investors weren't impressed with what they've seen so far. As a result, the Retail Holders were one of the day's biggest losers. To make... READ MORE
MONTHLY DOLLAR INDEX CHART ... To get a better idea of where the dollar stands in relation to its long-term trend, it's a good idea to start with the monthly chart. The monthly bars in Chart 1 show the Dollar Index peaking at the start of 2002 and falling... READ MORE
SEMICONDUCTOR INDEX TESTING 2005 HIGHS ... After some hesitation earlier this morning owing to a jump in energy prices, the market moved into new ground this afternoon to resume its uptrend. A lot of the credit for the afternoon strength comes from the semiconductor group which was second only to energy... READ MORE
CRUDE OIL BOUNCES OFF SUPPORT LINES... After losing more than 20% since the end of August, crude oil prices are starting to bounce off two lines of potential chart support. One is the horizontal line in Chart 1 which is drawn under the July lows. The other is the 200-day... READ MORE
NASDAQ HITS FOUR-YEAR HIGH ... Chart 1 shows the Nasdaq Composite having hit a new four-year high this week. It's now trading at the highest level since the spring of 2001. There's another shelf of potential resistance to watch at 2328 (see circle), but the action has... READ MORE
SHIFT FROM DEFLATION TO INFLATION ... Gold and the Japanese market are breaking out to new highs together. I don't think that's a coincidence. Back on September 29 I wrote an article entitled "New Japanese Leadership May Be Signaling Shift To Global Inflation" (September 29,... READ MORE