MATERIALS ETF HITS MONTHLY HIGH ... Second only to energy, basic material stocks are showing good relative strength. Chart 1 shows the Materials Select Sector SPDR (XLB) trading back over its 50-day average and also at the highest level since the first week of January. Its relative strength line along the... READ MORE
S&P 500 CLEARS 50-DAY AVERAGE ... After breaking through its January down trendline earlier in the day, the S&P 500 also managed to close just over its 50-day moving average today. Combined with a pickup in trading volume on the big board, it was a good technical... READ MORE
NYAD LINE MAINTAINS ITS UPTREND, NEW HIGHS ARE OUTPACING NEW LOWS AGAIN... The NYSE Advance-Decline line has been rising for several months. That's normally a good sign for the market. Historically, the AD line usually peaks before the market does. During January, the AD line started to drop... READ MORE
S&P 500 IS BREAKING DOWN TRENDLINE... The market's attempt to stage an oversold rally is beginning to gain more traction. The S&P 500 Large Cap Index is breaking through its January down trendline which was one of the first tasks it had to accomplish... READ MORE
OIL RECOVERS FROM EARLY SELLOFF... Crude oil opened sharply lower today and put energy stocks under early selling pressure. The drop in oil also gave an early boost to the stock market. By the afternoon, however, crude had turned a big loss into a dollar gain. Chart 1 shows that... READ MORE
S&P SPDR OPENS ABOVE RESISTANCE... Yesterday's Iraq election -- and a drop in crude oil this morning -- led to a higher open today. A short-term oversold condition also helped. The 30 minute bars in Chart 1 show the S&P 500 SPDRs (SPY) opening... READ MORE
MONTHLY AND WEEKLY SIGNALS ARE MORE IMPORTANT THAN DAILIES... I've been emphasizing daily (and hourly) charts recently to study the January downturn. While daily charts show the short-term trend, weekly and monthly charts are the ones that determine the major trend of a market. To study that longer-term... READ MORE
DRUG ETF BACK UNDER 50-DAY LINE ... Drug stocks are coming under heavy selling pressure late in the week. As a result, the Pharm Holders (PPH) have fallen well beneath its 50-day moving average. [That's one reason to consider doing some selling -- or, at the very least, avoid... READ MORE
BOND YIELDS FALL AS PRICES RISE... Today's report that growth in the U.S. economy slowed to 3.1% in the fourth quarter is having a predictable effect on bonds and stocks today. It's helping bonds and hurting stocks. Chart 1 shows the Ten year T-note... READ MORE
STOCK INDEX ETFS STILL HOLDING ABOVE SUPPORTS... The three stock index ETFs shown below are in short-term oversold conditions. In addition, all three are still above important support levels which I'm defining as their September/October peaks. As long as those supports hold, there's room for... READ MORE
OIL SERVICE STOCKS LOOK CHEAPER... I wrote yesterday that energy was my favorite market sector for the year and that oil service was my favorite group within that sector. Here's why. The three charts below show the three energy indexes that I track. The AMEX Oil Index (XOI)... READ MORE
DOW UTILITIES HIT NEW RECOVERY HIGH ... Since the start of the new year, I've written about new leadership by consumer staples and energy. More recently, I wrote that utilities should be next in line to start showing upside leadership. All three groups are among today's leaders... READ MORE
2005 ANNUAL FORECAST MEETING... I'm heading into New York this afternoon to be a panelist for the 2005 Annual Forecast Meeting which is held each year by the Market Technicians Association. Some of the topics discussed will be: Where do we stand in the presidential cycle? Will 2005... READ MORE
S&P 500 SPDRS FADE... Although the S&P 500 SPDRs closed higher today, they ended well off their earlier high. The increase in volume was pretty much concentrated in the first hour of trading. After that, trading trailed off. In my view, very little changed in the... READ MORE
SARA LEE FALLS 7% ... Since the start of December, I've highlighted the relatively strong performance of Sara Lee as a leader in the consumer staples group. Just last Thursday I showed the stock breaking out to a new four-year high. Although its quarterly profit came in higher, the... READ MORE
NASDAQ HEADED TO 200-DAY AVERAGE ... The Nasdaq market has suffered the most technical damage of all the major stock indexes. Yesterday I showed the Nasdaq market having broken a five-month up trendline drawn under its August/October lows. It's now headed toward its 200-day moving average and its... READ MORE
MOVING AVERAGE TRENDS ... I use moving averages quite a bit in my chart analysis. That's because they're a simple way of telling which way market trends are moving. The three that I watch are the 20-day, the 50-day, and the 200-day. Each one measures a different... READ MORE
CRUDE RESUMES UPTREND -- ENERGY STOCKS LEAD... Crude oil is rallying more than a dollar today and appears to be resuming its recent uptrend. Chart 1 shows that this week's minor pullback in oil found support along its mid-December peak at 46.65. That's what should... READ MORE
SARA LEE REACHES FIVE-YEAR HIGH ... With the market continuing to slide, consumer staples were once again the day's top sector performer. The standout chart belongs to Sara Lee. Its daily chart shows the stock breaking through resistance at 24.50. Its green volume bar shows rising volume on... READ MORE
BEAR MARKET FUND HASN'T GIVEN MAJOR BUY SIGNAL YET ... I've received a number of questions about buying a bear market fund to profit from a falling stock market. I've also been asked to write more about short selling in general. Let's start... READ MORE
JANUARY 2005 RELATIVE PERFORMANCE ... The performance bars shown in Chart 1 plot the relative ranking of the nine market sectors since the start of the new year. The sector bars are placed in descending order through last evening (Tuesday). Starting from the left, the only two sectors in the black... READ MORE
CISCO HELPS DRAG NASDAQ LOWER... Because of its large size, Cisco has an important influence on the Nasdaq market. Recently, that influence has been to the downside. Chart 1 shows the big networker tumbling to the lowest level in two months -- and on rising volume. That puts the stock... READ MORE
SUPPORT LEVELS ARE STILL HOLDING... Despite the fact that the market had another losing week, there wasn't much technical damage done. The only negative was the fact that all of the indexes closed below their 50-day moving averages. All of the other support levels that I showed last... READ MORE
RELATIVE TO WHAT?... Judging from some of the feedback I've gotten recently, I think I need to discuss the concept of relative strength a bit more. The type of questions I've received, for example, is what happened to the defensive qualities of biotechs and drugs --... READ MORE
SOX/OSX RATIO REVISITED... Semiconductors have been falling this week while oil service stocks have been rising. The relationship between the two industry groups can be examined by plotting a ratio of the two. Which brings us back to the Semiconductor (SOX) Index/Oil Service ($OSX) ratio which is plotted... READ MORE
OIL COMPLETES "DOUBLE BOTTOM"... Earlier in the week, I wrote about crude oil tracing out a possible "double bottom" just above long-term support at $40. In mid-day trading, crude is up $1.78 and has hit a new six-week high at $48.15. It has risen... READ MORE
UPS TUMBLES 7% -- TRANSPORTS ON SELL SIGNAL ... UPS tumbled over 6 points today on monster volume. The weekly bars in Chart 1 show the technical damage that's been done to this transportation stock. It's weekly RSI and MACD lines are on the first sell signals... READ MORE
TRADE DEFICIT BOOSTS FOREIGN CURRENCIES... The U.S. November trade deficit came in higher than expected and reached a record high. That's pushing the U.S. dollar sharply lower -- and foreign currencies higher. Chart 1 shows the Euro climbing back over its 50-day average. The Commodity Channel... READ MORE
WILSHIRE 5000 TARGETS SUPERSEDE S&P 500 TARGETS... During the fourth quarter, I gave an upside target in the S&P 500 to the 1250 level. That was partially predicated on the fact that 1250 represented a 62% retracement of the 2000-2002 bear market. I later wrote about... READ MORE
CRUDE OIL RALLY FADES... Yesterday I showed crude oil trying to break through its late December peak and its 50-day moving average. After a good start, the commodity ended the day in the red. Although that doesn't change the long-term picture, it was enough to prevent an upside... READ MORE
DNA DISAPPOINTS ... Yesterday I showed Genentech (DNA) testing chart resistance along its autumn high near 55. After the close, the big biotech company reported strong earnings but apparently not enough to impress the market. As a result, the stock has gapped down 4.4% today. The downside action has prevented... READ MORE
BIOTECH INDEX NEARS ANOTHER UPSIDE BREAKOUT... After retesting its 50-day average last week, the Biotech Index is nearing another upside breakout. It's within a couple of points of its December peak near 550. Its relative strength line also looks encouraging. It bottomed during August (see first arrow) and... READ MORE
MAY MAY BE TURNING HIGHER... In my last article on energy, I wrote that I thought crude oil would find a floor above $40. So far, that new floor has held. After a successful retest of its early December low, crude oil traded over $47 today and is trying to... READ MORE
DOW AND S&P 500 BOUNCING OFF 50-DAY LINES... The major stock indexes are trying to stabilize at initial moving average and trendline support. The Dow is holding above its 50-day average, while the S&P 500 is bouncing off that support line. I wrote on Friday that... READ MORE
CONSUMER STAPLES ARE TOP SECTOR FOR THE WEEK ... While all of the other market sectors lost ground this week, consumer staples suffered the least damage and even eked out a minor gain. It was also Friday's biggest gainer in the face of another losing day. That makes sense... READ MORE
NASDAQ COMPOSITE SUPPORT... Yesterday I showed support levels for the Dow, the S&P 500, and the Nasdaq 100. So far, none of those support levels have been broken in today's trading. I've been asked to give a few more and here they are. The... READ MORE
THE JANUARY BAROMETER... You're going to be hearing a lot over the next few days and weeks about the importance of the month of January in determining stock market trends for the rest of the year. There are two January signals that I'd like to explain... READ MORE
DOW SUPPORT LEVELS... I've been asked to show where underlying support levels are located for the major stock indexes. I'm using daily bars and point & figure charts to identify where the support levels are found. Chart 1 shows the 50-day average for the Dow at... READ MORE
WILSHIRE 5000 HAS RETRACED 62% OF BEAR TREND... One of the problems with doing a chart analysis of the "market" is knowing which market index to use. No one stock index speaks for the entire market. There is one, however, that a number of readers have asked about... READ MORE
BIOTECHS ARE BOUNCING AGAIN... After pulling back to its 50-day average, the Biotechnology Index (BTK) is bouncing again. So much so that it's the day's top group. Early last week, I showed the BTK breaking through resistance near 540. It's dipped back below that... READ MORE