GOLD SOARS $9.00... Gold prices have risen $9.00 today and are on the verge of a new multi-year high. That's putting a strong bid under gold stocks which are up 4% and the day's strongest stock group. Chart 1 shows the Gold ETF (GLD)... READ MORE
DOW AND S&P 500 PULL BACK FROM RESISTANCE ... Yesterday I wrote about some of the major market averages being up against chart resistance and in an overbought condition. That combination probably helped lead to today's profit-taking in the overall market. Chart 1 shows theDow Industrials backing... READ MORE
DOW INDUSTRIALS REACH 10700 BARRIER ... Some of the major market averages have reached important resistance levels which represents a moment of truth for the market. The Dow is a good example. It's trading over 10,700 today which puts it right up against the highs formed from July... READ MORE
ENERGY STOCKS SELLOFF ON WEAK OIL ... With crude oil falling to a three-month low, energy stocks are coming under heavy selling pressure. On Monday, I showed the Energy Sector SPDR (XLE) falling back below its 50-day moving average. It's fallen even further since then. Chart 1 shows the... READ MORE
HOMEBUILDERS PEAKED IN JULY ... A negative forecast from Toll Brothers that housing demand was weakening pushed that stock and other homebuilders sharply lower today. In turn, that caused some profit-taking in the broader market. The idea that the housing sector might be peaking isn't new. If you go... READ MORE
OIL BACK BELOW $60 AS ENERGY STOCKS FALL ... The price of crude oil fell $1.11 today to close back below the $60 level. Chart 1 shows, however, that crude is nearing its 200-day moving average at 57.39. It remains to be seen if that long-term support line will... READ MORE
DOLLAR INDEX BREAKS SUMMER HIGH ... The U.S. Dollar broke through its summer high today and closed above 91 for the first time in eighteen months. The daily bars in Chart 1 show the short-term bullish breakout. The weekly bars in Chart 2 show that the USD is trading at... READ MORE
TRANSPORTS HIT ALL-TIME HIGH ... I've written several times over the last few weeks about how the drop in energy prices during October was giving a big boost to the fuel-sensitive transportation stocks. With crude continuing to trade below $60, the Dow Transportation Average has broken through its spring... READ MORE
INTERNATIONAL STOCKS RISE... Following on the heels of Friday's strong stock market gains in the U.S., international stock markets opened the week on a powerful note. The major European stock markets gained about 2% while Japan did about the same. That got our market off to a... READ MORE
NO CHANGE IN SHORT-TERM TREND... Last Friday I showed the S&P 500 trading between support at its 400-day (80-week) moving average (blue line) and resistance at the red 200-day (40-week) line. I also suggested that the S&P needed a decisive close above 1200 to turn its... READ MORE
NEW SIX MONTH HIGHS ... Long-term interest rates surged today in the T-bond and T-note markets. Charts 1 and 2 show the 10-year T-note (TNX) and the 30-year T-bond yield (TYX) surging to the highest levels in more than six months. This upward trend continues breakouts that took place earlier in... READ MORE
OIL MAY HAVE BOTTOMED ... It looks like the fourth quarter correction in crude has probably ended. After dipping briefly below $60, crude oil jumped more than $2 yesterday and looks to have bottomed. The Commodity Channel (CCI) Index (on top of the chart) is turning up from oversold condition after... READ MORE
TRANSPORTS HAVE ANOTHER STRONG DAY... On Friday I wrote that one of the places that any fourth quarter bounce would start would be the transports. That's because they're among the main beneficiaries of the recent slide in oil prices. [Earlier in the week I also listed... READ MORE
CAUGHT BETWEEN TWO LINES ... There's good and bad news on the daily S&P 500 bar chart. The bad news has to do with the fact that the S&P is still trading below its red 200-day moving average line. Although not every break of the... READ MORE
TRANSPORTS ARE SHOWING RESILIENCY... Earlier in the week I wrote that falling energy prices should benefit certain market groups more than others. I also suggested that any fourth quarter rally would most likely be led by financials (mainly banks), retailers, technology, and transports. I've already shown some early... READ MORE
JAPAN IS TOP OCTOBER MARKET ... A number of readers have asked for an update on the Japanese market. My October 11 message entitled "Why Japan is a Good Global Value" (October 11, 2005) showed the low correlation between Japan and the U.S. over the last fifteen years,... READ MORE
OVERSOLD NYSE BOUNCES ON STRONG VOLUME... A lot has been written about the 200-day moving average lately. That's because a market that breaks that long-term support line -- and then stays below it -- can be in trouble. Several market indexes have broken that support line over the... READ MORE
OIL SERVICE HOLDERS STILL IN CORRECTION ... On September 14 I wrote an article showing that the energy sector had moved into a long-range overbought condition. That article, however, allowed for more short-term buying until the short-term trend also became overbought. On September 23, I wrote that oil appeared to be... READ MORE
WHY NEXT TARGET FOR GOLD IS $500 ... After reaching $700 in 1980, the price of gold fell for the next twenty years before hitting bottom at $250 in late 1998. Bullion started to rise in early 2002 and is close to doubling in price. One of the ways to arrive... READ MORE
NYSE BULLISH PERCENT INDEX AT CRITICAL SUPPORT... I've been asked to update my views on the NYSE Bullish Percent Index (BPNYA). The BPNYA is the percent of stocks in the NYSE Index that are on point & figure buy signals. On September 26 I reported that the BPNYA... READ MORE
INVERSE FUNDS ... One of our readers asked which indicators to use when analyzing bear mutual funds. The answer is to use the exact same indicators that we use in the stock market. Bear funds are simply inverse funds. They're designed to move in the opposite direction of the... READ MORE
BOND YIELDS EXCEED AUGUST HIGH... Yields on the 10-year T-note and the 30-Year T-bond closed over their August highs today. I've explained before that I'm focusing more on the 30-year bond because I believe that's where the most reliable trend signals are being given... READ MORE
BIOTECH AND INTERNET INDEXES BREAK 50-DAY LINES... Two former leadership groups in the Nasdaq market have undergone short-term trend damage. Chart 1 shows the Biotechnology Index (BTK) trading beneath its 50-day average for the last four trading days. Its relative strength line (versus the Nasdaq) is starting to slip as... READ MORE
JAPAN CONTINUES TO LEAD GLOBAL MARKETS... I've written some recent articles on my belief that the Japanese market represents the best global value at this point in time. Part of that reasoning is tied to the idea that Japan is benefiting from the global swing from deflation to... READ MORE
DAILY CHARTS ... October is trying to live up to its reputation as one of the year's most dangerous months. All of the market averages fell sharply and on rising volume. That's a bad combination. Many of them undercut initial chart support at their August lows and... READ MORE
EURO BOUNCES OFF JULY LOW ... The Euro is bouncing strongly off chart support at its July low as shown in Chart 1. Aside from technical considerations, there were two main catalysts behind today's jump. One is a statement from the president of the European Central Bank that it... READ MORE
BREAKS AUGUST LOW ... Earlier today I wrote that the S&P 500 was at a critical chart point as it neared a test of its August low and its 200-day moving average. It failed on both counts. Chart 1 shows the S&P closing below both support points... READ MORE
BASIC MATERIALS ETF IS UNDERACHIEVING ... With all the recent talk about basic material prices moving up, a lot of readers have asked if this a good time to put money into the Materials Select Sector SPDR. I don't think so. Although it may seem counter-intuitive, the XLB has... READ MORE
STOCK MARKET INDEXES WEAKEN FURTHER ... The stock market slide that started yesterday afternoon is continuing this morning. Yesterday's selling on rising volume raised bearish concerns along with the fact that moving average lines were broken as well. The Dow Diamonds (DIA) in Chart 1 have fallen back below... READ MORE
MATERIAL PRICES HAVE BIG JUMP ... Long-term rates continue to rise in the face of rising inflation pressures. Over the last month, manufacturers reported the biggest jump in fifteen years in the prices they pay for materials. That means that upside pressures are building in the inflation pipeline. As you would... READ MORE
MARKET AVERAGES CLOSE BACK OVER 50-DAY LINES... The market had a lot thrown at it this month. A spike in energy prices, plunging consumer confidence, and rising long-term interest rates. It also had the month of September to deal with which has traditionally been the worst month of the year.... READ MORE
JAPAN CONTINUES TO LEAD GLOBAL MARKETS ... I've written several bullish articles on Japan over the last few months. The last one on September 9 carried the headlines: "Japan Hits Four Year High" and "Japanese Market Leads Global Rally". The last paragraph in that article... READ MORE
A COMPARISON OF NAT GAS AND OIL... It's becoming increasingly clear that natural gas is now the strongest part of the oil patch. Part of the reason why can be seen in the following charts. The first two charts compare the ten-year history of crude oil (Chart 1)... READ MORE
HEALTHCARE ETF IS SLIPPING ... On September 7 I wrote a positive story on the healthcare sector which was based on good chart action combined with relative strength (September 07, 2005). Although the group hasn't done that badly since then, it hasn't done that well either. So... READ MORE
30-YEAR T-BOND YIELD TESTS 200-DAY LINE ... I recently started to look at the 30-year T-bond yield to help determine the direction of long-term rates. That's because the 10-year T-note yield has given some false signals over the last year. Chart 1 shows the 30-year T-bond yield (TYX) jumping... READ MORE
PULLBACK IN OIL MAY BE HELPING ... Everywhere we look we see essentially the same chart picture. The major stock indexes are struggling to hold at the first key support levels drawn under their August lows. Chart-watchers know that's a very important test. Even before the recent hurricanes (and... READ MORE
HIGH VOLUME REVERSAL IS A CONCERN ... On September 14 I used weekly charts to show why I believed that the the long-term trend of the energy sector had reached overbought territory (September 14, 2005). [The monthly charts are also overbought]. I allowed, however, for higher prices since the short-term trend... READ MORE
BANK INDEX HITS FIVE-MONTH LOW ... Heavy selling in bank stocks is pulling the entire financial sector lower today. Chart 1 shows the PHLX Bank Index (BKX) falling to a new four-month low. Part of the financial selling may be coming from heightened fears of inflation which encourages the Fed to... READ MORE
GOLD SHARES REACH TOP OF TRADING RANGE... On September 14 I wrote that the next upside target for the Gold & Silver (XAU) would be the top of a two-year trading range in the 111-113 zone (September 14, 2005). The XAU has reached that zone and is pulling back a... READ MORE
CONSUMER STOCKS ARE UNDERPERFORMING ... The latest consumer confidence report showed the biggest drop in years. While that may have been an over-reaction to the shock of Hurricane Katrina, consumer confidence has been dropping all year. We can tell that by looking at the relative performance of consumer discretionary stocks. As... READ MORE