In my last article, I laid out several arguments why it would make sense to be more cautious as you approach the stock market. I'm bullish for the balance of 2013 - at least as of now - but the short-term has definitely turned more dicey. One of the... READ MORE
I remain bullish for 2013 and believe we could see 1700-1800 on the S&P 500 before the year is over. But I can't deny the short-term warning signs that are showing up everywhere. Let's take the issues one at a time. 1.... READ MORE
Energy apparently has more fuel in the tank. After underperforming the past couple years, it has rocketed higher to start 2013 and was the leading sector during what was a VERY solid January. As a student of history, that January strength bodes well for the stock market during the balance... READ MORE
Technicals do change and I reserve the right to change my opinion as price action evolves, but the energy sector looks like THE ONE for 2013. I remain bullish the stock market overall so I expect most sectors will perform well in 2013. Keep in mind that money rotates from... READ MORE
Happy New Year!!! Here's to good health and good fortune in 2013! Now is the time when market pundits give their predictions for the stock market for the upcoming year. While it might be entertaining to try to figure out where the S&P 500 might finish... READ MORE
To historians, this doesn't come as a surprise. Since 1987, the Russell 2000 has produced annualized returns during the month of December of 43.38%. April is the next best month for small caps with its annualized return of 21.84%, a very distant second. Over the past... READ MORE
Homebuilders have been a leading industry group throughout the S&P 500 rally off the 2009 lows. This strength has been particularly obvious over the past year. Looking strictly at a shorter-term chart, technical indicators couldn't look much better. Check it out: While homebuilders did fall... READ MORE
All the recent talk has centered around the effect of a potential fiscal cliff. While we may or may not be subject to a fiscal cliff, each and every one of us has been subject to the recent technical cliff, especially the one since election day. Things have gone from... READ MORE
One month ago, I discussed the increased risk of holding gold as key price resistance was being tested with a long-term negative divergence on the MACD present. That was a sign of slowing momentum and that, combined with price resistance, simply tells us to grab profits and respect the... READ MORE
October has been a very strange month thus far. While most of our sectors are trading close to the flat line for the month, financials and technology are heading in opposite directions. I can't recall a two week period where the returns of these two influential sectors diverged... READ MORE
To be honest, I'm not a big fan of providing outlooks too far into the future because prices change continually. As a technician, I realize charts can change daily. Therefore, I have to be willing to change my thinking on a dime and, if you're managing... READ MORE
Living in the Washington DC area, I'm not sure which was more exciting - QE3 or RG3! The market was set up for higher prices as traders anticipated more quantitative easing. Fed Chairman Bernanke did not disappoint. By providing a third round of quantatative easing, the Fed aims to... READ MORE
Before I take a look at the bigger picture, there were a couple rather bullish signs on the one year chart for gold the past few weeks. Take a look: After testing descending triangle support (you'll see that in the 5 year chart below) in mid-May, gold... READ MORE
First, let me say that it was AWESOME meeting so many of you at Chartcon 2012 in Seattle last week. It was also great to finally meet several of the co-authors of ChartWatchers. I've been to a LOT of trading conferences and this one surpassed all of... READ MORE
Any time the S&P 500 moves to fresh new highs, I try to determine the likelihood that the move is a sustainable one. Traders need to be in the right mindset to carry prices further. They need to be aggressive in terms of where they place their trading... READ MORE
I know many traders view the MACD to be a lagging indicator and technically it is. After all, the calculation of the MACD uses historical price data so how could it not be a lagging indicator? Well, I can only tell you that I use the MACD for advanced calls... READ MORE
Reasonably bullish signs have emerged, the latest being that crude oil prices (finally!) found support at 2 year lows near $76-$77 per barrel. Not only was price support tested, but slowing momentum was obvious in the form of a long-term positive divergence. It's always nice to... READ MORE
All traders must decide whether to invest their dollars aggressively or conservatively. It's a basic principle, yet following the flow of such dollars can provide us valuable clues about the likely direction of the stock market. For me, it's a simple case of tracking the 10... READ MORE
The long-term negative divergences that printed in February and March provided us clues that we'd at least see some near-term trepidation and possibly something much worse. Well, the "much worse" has arrived. There is no technical sign - bullish or bearish - that ever provides us... READ MORE
Everything seemed perfectly aligned for the bulls. In March, slowing momentum on the bulls' side was a growing concern, but the consolidation that took place in the latter part of March and throughout April relieved that concern, so technically it appeared the bulls might resume control of the action.... READ MORE
Once a month, the stock market provides us a unique opportunity. In basketball terms, it's like the market makers have the ball with time running out in the quarter - or the game - and they nearly always bury that critical three-pointer. For those more predisposed to hockey, think... READ MORE
I'm not quite sure why, but there definitely is a positive bias towards small cap stocks as we approach the Spring season. April and May are the 2nd and 3rd best calendar months in terms of annualized returns on the Russell 2000. Only December boasts a better monthly... READ MORE
In my last article, I featured a weekly NASDAQ chart and pointed out that the MACD was coming up off the centerline and pointing higher. I indicated this was a very bullish signal for the intermediate- to longer-term and supported my belief that equity prices would continue to rise... READ MORE
In earlier articles, I wrote about key upcoming resistance on banks and the "January Effect". Very strong performance in January suggests that equities will continue to rally throughout 2012. If the recent performance in the banking industry is any indication, consider it confirmation. If you study history, you&... READ MORE
It takes time and patience for continuation patterns to play out. Many traders grow frustrated, especially after the stealth move higher ends because of the time involved for continuation patterns to form. The current bull market in gold has lasted more than a decade and there are few technical signs... READ MORE
Two weeks ago, I wrote that equities were very overbought and quite complacent. While we didn't see any selling of substance, the market did struggle to move up - that is, until Friday's Nonfarm Payrolls hit the wires. What a blowout number it was! Let's... READ MORE
Ok, I'll admit I'm being a little dramatic. But everyone should know how I feel about my favorite sentiment indicator - Relative Complacency/Pessimism. One month ago as the market was dropping, I wrote about how relative pessimism was building and how that could limit the downside... READ MORE
High volatility is generally associated with declining equity prices. The inverse is true as a declining level of volatility emboldens the bulls. Therefore, I follow the VIX continually to get a sense of DIRECTION. Clearly, the volatility index (VIX) has been trending lower over the past few months. So it... READ MORE
I always find myself turning my attention to "next year" in the stock market as we enter the December holiday season. On many fronts, 2011 has been the most challenging year in equities that I've ever seen. Sure, the losses in 2008 and the fear that... READ MORE
With one week left to go, the S&P 500 was on the verge of its worst November in the last sixty years. Then the Fed and other central bankers came to the rescue of global markets last week and everything was just peachy again (sarcasm intended). November turned... READ MORE
For an options expiration week, volume was quite light. Any time volume is light, the threat of market manipulation grows. As we headed into last week, max pain suggested a potential 2.5%-3.5% move lower in equity prices, depending on the index. With hindsight now, we see the... READ MORE
When you review the history of the stock market, you see that financials tend to hold the key for whether a stock market advance is sustainable or not. The long-term chart below still raises questions about the sustainability of not only the October rally, but also the multi-year... READ MORE
The market has spoken. If you're looking for nice earnings surprises for the third quarter, or perhaps raised guidance on a forward-looking basis, look no further than the technology and consumer discretionary sectors. This past week, we saw a very positive earnings report from Google (GOOG), while... READ MORE
The weekly moving average convergence divergence (MACD) has always been a favorite indicator of mine. It provides a "big picture" outlook of the market and helps me take a step back from the day to day swings of the market. With the Volatility Index (VIX) in the stratosphere... READ MORE
I'm not buying this rally - not yet anyway. This past Sunday night, I calculated max pain for the ETFs that track our major indices. After staring at the numbers, I wondered "can they do it again"? By "they", I meant the market makers. You... READ MORE
Wednesday at noon, the Dow Jones and NASDAQ were both testing critical resistance. Here's an excerpt from my daily Market Chatter mailed out close to noon EST on Wednesday: "We certainly don't like the action thus far today. A rather significant reversal is possibly underway... READ MORE
If the stock market were a mental health patient, it would have been committed by now. Major trend changes are occurring at points of wild volatility and extreme fear. I've written many times in the past about my favorite sentiment indicator - the equity only put call ratio (EOPCR)... READ MORE
If you recall, stocks were mired in an ugly bear market from 2000 through 2002. At the end of that bear market, however, the S&P 500 staged a huge advance, running specifically from 789 in March of 2003 to 1163 by March 2004. After that big climb, there... READ MORE
Gerald Appel created the MACD in the late 1970s. It's a momentum oscillator that serves to gauge the strength and direction of a trend, but what I find most useful is its ability to predict a reversal. If you like to short weak stocks, I can't... READ MORE
I was certainly looking for a bounce last week, but if I'm being honest, I wasn't looking for THAT kind of bounce. Our major indices all gained over 5% in just one week. That's not a bad return for a YEAR!!! There were definitely... READ MORE