NASDAQ STILL HOLDS A KEY TO THE MARKET ... The technology-dominated Nasdaq has been a real problem for the broader stock market. The relative weakness in the Nasdaq since the end of the last year has been one of the big negative factors weighing on the market. If the market is... READ MORE
JAPANESE APOLOGY BOOSTS YEN... Over the last week I wrote about the U.S. Dollar starting to roll over from its 2005 high and its 200-day moving average. At the same time, the Euro was bouncing from its 200-day moving average. I took that to mean that the dollar had... READ MORE
KEEP YOUR EYE ON THE KEY CHART LEVELS ... It's important to keep your eyes on the key chart levels. That helps keep things in their proper perspective. It also prevents us from getting too caught up in day-to-day market swings and conflicting signals from short-term technical indicators. The... READ MORE
CORE CPI HITS HIGHEST LEVEL IN TWO YEARS ... Inflation starts to build in three stages. The first stage occurs when raw materials (commodities) start to rise. That started a couple of years ago. The second stage occurs with the Producer Price Index (which is what companies pay to buy those... READ MORE
SOX RALLY FADES... Despite a strong opening in Intel, the bounce in the Semiconductor (SOX) Index hasn't been very impressive. In fact, it's currently down for the day. Chart 1 puts the SOX in some perspective. The good news is that it's bouncing off... READ MORE
SEMICONDUCTOR HOLDERS BOUNCE ON LIGHTER VOLUME... Technology analysts read a lot into today's bounce in the semiconductor group. Chart 1 shows part of the reason why. The Semiconductor Holders (SMH) bounced off their January low. The problem is they did it on lower volume. That's not... READ MORE
BOND YIELDS CONTINUE TO DROP ... Whether or not it's based on fears of a slowing economy -- or today's relatively benign core PPI inflation report -- bond yields are falling sharply as bond prices rise. Chart 1 shows the 10-year T-note yield falling further beneath its... READ MORE
NO DIVERSIFICATION ON THE DOWNSIDE ... Over the last few years, foreign markets have done a bit better than the U.S. market primarily because of the falling dollar. Having said that, however, global stock markets have been and remain highly correlated. The three lines in Chart 1 make that point.... READ MORE
DOLLAR INDEX BACKS OFF FROM RESISTANCE... The U.S. Dollar has established an intermediate-term trading range since the start of 2005 within a long-term downtrend. Chart 1 shows the Dollar Index (plotted through Friday) starting to back off from a test of its 200-day moving average and its February peak... READ MORE
HEALTHCARE INVESTORS SHOULD BE FEELING BETTER... While the rest of the market broke down this week, the only sector to end up in the black was healthcare. Chart 1 shows the Health Care SPDR (XLV) ending the week at a new recovery high. Its rising relative strength line also shows... READ MORE
REVISITING RYDEX URSA ... Back on April 5 I wrote a piece on bear funds (April 05, 2005). Part of the headline was that no major buy signal had taken place. That's no longer true. Last Friday I recommended buying (or adding to) any bear fund that closed over... READ MORE
CYCLICAL STOCKS TAKE A BEATING ... One of the best ways to predict the direction of the economy is to follow the trend of major market averages. That's because the market is one of the best economic indicators of all. Since the start of 2005, those market averages have... READ MORE
TRANSPORTS TUMBLE 3% ... Last Friday I wrote about the Dow Transports falling beneath their 50-day moving average and being pulled down by rails and truckers. I also warned about how weakness in the transports was a negative sign for both the stock market and the economy. As for the market,... READ MORE
CHIPS CONTINUE TO FALL ... Earlier today I wrote about the need to rotate existing funds already in the stock market -- as opposed to putting new money into the market. I wrote that I favored the former (rotating) but not the latter (new money). I wrote a week ago that... READ MORE
NO FOLLOW-THROUGH FROM YESTERDAY ... When a market records an up day like yesterday -- especially on heavy volume -- it's important to watch for upside follow through. In fact, the market gave back most of yesterday's gains. The only positive factor (and it's a... READ MORE
BRISTOL MYERS SQUIBB HITS 52-WEEK HIGH ... Last Tuesday I wrote a piece on the revival of drug stocks and the healthcare sector which were starting to show market leadership April 05, 2005. Part of that was due to their generally defensive qualities. One of the three drug leaders that I... READ MORE
MEDICAL ETFS HIT SIX-MONTH HIGHS ... The Pharm Holders (PPH) are the day's top Exchange Traded Fund. Chart 1 shows the PPH breaking through its recent highs to reach the highest level in six months. Some of the day's top percentage gainers are Merck, Lilly, Schering Plough,... READ MORE
FED MINUTES PUSH BOND YIELDS LOWER... The Fed minutes from its last meeting calmed the financial markets and led to an impressive rebound in the stock market. Two of the intermarket factors that turned the market around in the afternoon were a drop in bond yields and crude oil. Chart... READ MORE
TRANSPORTS LOSE 3% AND BREAK SUPPORT LINE... The market lost another one of its leaders -- the transportation group. The Dow Transports tumbled more than 3% today and was the day's worst group. What's worse the transportation index tumbled beneath its 50-day moving average in very... READ MORE
ALCOA GAPS HIGHER WHILE WAL MART FALLS... Rising aluminum prices have given a big boost to the shares of Alcoa. A positive earnings report is pushing the big aluminum producer over a dollar higher in morning trading. It's also one of the big board's most actively... READ MORE
S&P SPDR TESTING 50-DAY AVERAGE ON LOW VOLUME... I recently wrote about the possibility of a short-term bounce in the S&P 500 to its 50-day moving average. Chart 1 shows the S&P 500 SPDR (SPY) touching that resistance barrier twice over the last four... READ MORE
WHERE TO FIND PROFUND BEAR FUNDS... I promised yesterday to look at a couple of ProFunds Bear funds today. To find them, click on Market Carpets (on main menu) and then ProFunds Carpet. Click on Inverse (at the bottom left) and you'll see eight different bear funds. Chart... READ MORE
FIRST PFIZER ... Because of its large size, Pfizer carries a lot of weight in the drug and healthcare groups. That's why its price jump today is helping to spark buying in both groups. But, in my opinion, it's not one of the more attractive drug stocks... READ MORE
PHARM HOLDERS ARE DAY'S TOP ETF... Pfizer's prediction of double digit growth next year (based on some serious cost-cutting) has sparked some serious buying in pharmaceutical stocks and the healthcare sector. As a result, Pharm Holders (PPH) are the day's top performing ETF. Chart... READ MORE
RYDEX URSA TESTING JANUARY HIGH ... On Friday I repeated an earlier idea of buying a bear market mutual fund to actually benefit from a falling stock market. The chart of a bear market fund is just the inverse of a chart of the market. With the Dow and the S&... READ MORE
FIRST QUARTER RANKINGS ... The sector rankings for the first quarter of the year carry an important message. Unfortunately, it's a negative message both for the stock market and the economy. The sector bars are plotted above and below the S&P 500 which is the zero line.... READ MORE
ENERGY MARKETS SURGE ... The entire energy complex is rising sharply today -- paced by record highs in gasoline and heating oil. Crude is trading 1.64 higher at 55.63. Chart 1 shows that the uptrend in crude is still intact. The energy complex is leading a strong rally in... READ MORE
BASIC MATERIALS AND ENERGY ARE SLIPPPING... Basic materials and energy were among yesterday's weakest groups. The Materials Sector SPDR (XLB) and the Oil Service Holders (OIH) both closed beneath their 50-day moving averages. The month of March has also seen some slippage in their relative strength lines. While... READ MORE
EMERGING MARKETS ARE FALLING HARD ... Given the high correlation between global stock markets, it's no surprise to see most of them weakening along with the U.S. market. Emerging markets are getting hit especially hard. I believe that's due to the recent upturn in long-term rates.... READ MORE
JAPANESE YEN SLIPS UNDER 200-DAY LINE ... With the U.S. Dollar in a rally mode, most foreign currencies have been selling off of late. Among the major currencies, the Japanese yen has been hit the hardest. Chart 1 shows the yen falling under its 200-day average and testing chart support... READ MORE
DON'T WORRY ABOUT THE SHORT-TERM ... I've been getting messages asking about my short-term market view. Partially in response, I wrote a message earlier today about the market being in a short-term oversold condition from which a short-term bounce could materialize. That's especially true as... READ MORE
NIBBLING AT NASDAQ 2000... The market is in an oversold condition from which a rebound is possible. That doesn't turn its chart bullish. But some bottom-fishers are starting to do some nibbling -- especially in the Nasdaq market. Chart 1 shows two reasons why. First, the Nasdaq Composite... READ MORE
GOLD SELLING TIED TO RISING DOLLAR ... Some of you have asked why gold sold off this week in reaction to news of higher inflation. After all, commodities are leading indicators of inflation. Keep in mind that a big part of the commodity advance over the last three years has been... READ MORE
BOND YIELDS SURGE TO EIGHT-MONTH HIGH ... It's amazing to me how the media (and investors) hang on every word from the Fed. Veteran market watchers know that the Fed reacts to market events -- it doesn't anticipate them. Today's admission by the Fed that... READ MORE
RELATIONSHIP BETWEEN SHORT AND LONG RATES ... With the Fed expected to keep raising short-term rates, a lot has been written about the relationship between short and long-term rates. The fact is that they usually trend in the same direction -- but not always to the same degree or at the... READ MORE
DOW AND S&p 500 SLIP UNDER CHART SUPPORT... The blue chip averages continued to deteriorate today. Both the Dow and the S&P 500 closed below their late February lows. Financial stocks were among the day's biggest losers as long-term interest rates rose again. The... READ MORE
THE VIX IS RALLYING ... The CBOE Volatility Index (VIX) is starting to climb. Chart 1 shows the VIX trading at a two month high and nearing a challenge of its 200-day moving average. A more important test will take place at its January high at 14.75. That's... READ MORE
SECTOR PERFORMANCE CHART ... Most weeks in "John's Latest Performance Chart" I show the relative rankings of the nine AMEX Sector SPDRs relative to the S&P 500. Chart 1 shows those sector rankings since the start of the year. I've arranged the sector... READ MORE
SHARPCHARTS 2 IS ON THE WAY ... The March 12 Chartwatchers Newsletter discussed the latest "Beta" version of Stockchart.com's up-and-coming new charting tool -- SharpCharts 2. This new charting version has been in the works for almost two years and it's almost ready. Stockcharts... READ MORE
CRUDE OIL ACHIEVES NEW RECORD ... Crude oil jumped $1.40 today to break through its previous record set in late October. That puts oil in uncharted territory. While that helped energy stocks today, it had a very negative impact on the rest of the stock market. That wasn't... READ MORE