Traders are expecting the horrible market we've seen thus far in June to only get worse. The VIX is the ticker symbol for the Chicago Board Options Exchange Market Volatility Index. It measures implied volatility of S&P 500 index options, or the "expectations" of... READ MORE
There are many sentiment indicators that can be followed but the two I most closely follow are the Volatility Index (VIX) and the Equity Only Put Call Ratio (EOPCR). There are sentiment gauges that tell you how investment letter newswriters "feel" about the market. Personally, I'd... READ MORE
Issues are mounting and the pressure is definitely weighing on the bulls. While we haven't seen any major breakdowns to confirm several bearish signs, you should be approaching the market with caution in my opinion. In my last article, I discussed one of the warning signs - the significant... READ MORE
It was a little more than one year ago - in April 2010 - that I began warning about a potential top approaching. We now know what happened in May and June of that year. Well, the warning signs are mounting again and, barring technical changes, we could be in for a... READ MORE
If you plot the Percentage Price Oscillator (PPO - 12,26,9) on an index or individual stock chart next to the MACD (12,26,9), you'll find that they appear to be identical. Let's use Wynn Resorts (WYNN) as an example. Below I show how both... READ MORE
Let's face it. Two weeks ago, the market looked cooked. There didn't appear to be a single drop of gas left in the bulls' tank. We saw impulsive selling. The volume surged on the selling. Daily charts had already printed long-term negative divergences across... READ MORE
For the first time since August 2010, the bears are in control of the short-term action. I haven't lost sight of the intermediate- and long-term uptrends that are in place (which remain bullish), but I also am not going to ignore the clear breakdowns of the... READ MORE
It's hard to believe it's been two years since that infamous 2009 March bottom. I'm going to focus on the NASDAQ for purposes of today's article. Let's take a quick look at the advance since late August 2010 to gain... READ MORE
One thing that's been quite apparent to me over the past several months is that money is not leaving the equity market. When one sector or industry group sells off, the money simply rotates elsewhere. Then rinse and repeat. This is truly a trader's dream because... READ MORE
Attempting to short this market prior to any significant breakdown is the equivalent of financial suicide. Taking profits occasionally, moving into cash, and awaiting entry on a new position is fine. But shorting this uptrend with hopes of a big reversal just makes no sense. Since January 27th, take a... READ MORE
Complacency in the market was setting records this past week. The technicals? They look great. But can the market keep moving higher short -term when options traders are betting on it en masse? Well, maybe, but if you enter stocks on the long side at this level, please understand the... READ MORE
Happy New Year!!! The financial sector looks superb as we bring in a new year. I am of the opinion, at least based on current technicals, that 2011 will be a solid stock market year and financials will be a primary reason. I'm looking for solid quarterly earnings... READ MORE
It's hard to believe another year is coming to an end. Outside of a few scary weeks, the stock market performed well in 2010 and heads toward 2011 with a lot of bullish momentum. Complacency is a short-term issue that we dealt with last week and will... READ MORE
Complacency was the big issue for stock market bulls as we entered the second week of November. The market simply ran too far too fast and everyone began piling in on the equity calls as if the buying would never end. Well, guess what? The buying ended! The market topped... READ MORE
The top in April was laced with warning signs, from record complacency to negative divergences on daily and weekly MACDs to underperforming financials to overbought oscillators to oversold bonds. In particular, the negative divergence on the MACD on the weekly charts suggested the weakness was likely to last. Recently, complacency... READ MORE
It's been a breathtaking move. The NASDAQ was trading near the 2100 level at the end of August. Friday it closed at 2579. That's more than a 25% move in just over two months. Of course that followed a 17% decline from April through August. The... READ MORE
I spend a great deal of time evaluating the financial sector because I believe it's the most influential group in terms of leading the market. Financials underperformed miserably in 2007 and 2008 and overall market performance followed suit. In 2009, financials outperformed and the market recovered a lot... READ MORE
Great question. There are as many arguments saying "no" as there are those saying "yes". Who do you believe? In August, our major indices were tumbling and it seemed like every media outlet was touting our doom and gloom. By the end of September, psychologically it... READ MORE
Let's do a case study. Wouldn't it be great to find the next Google (GOOG) or Apple (AAPL) in the early stages, before the meteoric rise? It's definitely possible, but it takes homework and TONS of patience. Every great long-term performer goes through... READ MORE
Semiconductors. Financials. Small Caps. 10 Year Treasury Yields. Take a look at the following chart as the relative performance of each of the above is plotted against the S&P 500: These are four of the biggest reasons why the market hasn't been able to sustain a... READ MORE
With a myriad of "under the surface" problems, the S&P 500 simply ran out of gas at a very inopportune time. The bulls were on the threshold of a major breakout on the S&P 500 above its June highs near 1131. For seven consecutive... READ MORE
Yep, you read the headline correctly. I want to personally congratulate you if you're able to successfully trade this market. Because it ain't easy. Friday was yet another example. Not only did the report fall well short of expectations on the July jobs, the revision to... READ MORE
Divergences are among the most misused technical analysis tool anywhere, in my opinion. The first step in successful trading using divergences is understanding both their strengths and their limitations. My preference is to focus on divergences as they relate to the Moving Average Convergence Divergence (MACD). Others use divergences on... READ MORE
In the life of a technical analyst, a month seems like a week, a week seems like a day and a day seems like minutes. Time flies and so do the charts and various technical patterns. I think it's always a good idea to periodically take a step... READ MORE
The market is at a crossroads short-term. We've been bouncing back and forth after that early May drubbing. So is the rally ending or is it just starting? Well, we can only look at the technical, sentiment and historical indicators and come up with a "highest... READ MORE
Technically, this hasn't been brain surgery. Our major indices broke down in early May on very heavy volume and, as technicians, we can never ignore that lethal price/volume combination. The weakness also came on the heels of some of the most extreme complacency that I've... READ MORE
Many traders look at volatility and think huge potential rewards. I look at it and think huge potential risks. I know I'm conservative, but it's two different ways of viewing the same market. I concede that if you're on the right side of each... READ MORE
Global stock markets have been quite volatile of late and significant gap ups and gap downs are becoming the norm. While trading gaps may seem impossible at times, there is good news technically from the market selloff that resulted from the debt crisis in Europe. In recent articles, I'... READ MORE
In my last article I suggested the financials were topping and that would make any further advance in the market difficult. Well this past week the action on the NASDAQ and Russell 2000, home of the high beta stocks, confirmed the bearish action. We've seen several warning signs... READ MORE
In my first article of 2010, I indicated that financials would need to lead on a relative basis in order for us to see strength in overall equity prices this year. Until late last week, financials have performed very well on a relative basis. Take a look visually at what... READ MORE
If you're looking for sector leadership in 2010, look no further than the industrials. While other sectors have performed admirably, especially financials and consumer discretionary, none top the 13.13% year-to-date gain that industrials are sporting. Compare that return to the paltry 0.57% gain in... READ MORE
Candlesticks and candlestick patterns are the foundation to trading in my view. I use them on every charting timeframe, whether it's a one minute, hourly, daily, weekly or monthly chart. If you're a daytrader or swing trader, trading without the knowledge of reversing candlesticks is doing... READ MORE
Happy Anniversary! It was one year ago, on March 6, 2009, that the S&P 500 made that unforgettable 666 low, completing an amazing drop from above 1300 in August 2008. That represented nearly a 50% decline in the market capitalization of 500 of the largest U.S. companies... READ MORE
History is a valuable tool in the stock market as we witness cycles repeating themselves all the time. Our major indices and the various sectors and industries rotate back and forth as our economy moves from strength to weakness and back to strength again. Certain sectors perform better during strong... READ MORE
Relax Chicago. You're not in the Super Bowl this year. I'm just applying a little Super Bowl-mania to the current state of the stock market. The bears are calling the plays. From a sentiment and technical perspective, this market is really making sense right now.... READ MORE
Ask any NFL coach and he'll tell you unequivocably that defense wins championships. If you're looking for market-beating returns, then you'd better improve your defense first, then your offense. Plain and simple, Invested Central did everything possible to prepare defensively for last week&... READ MORE
Happy New Year!!!! It's been awhile since I've spoken about the financials in a positive light. As sector rotation continues though, it appears as if the financials may get their turn after all. I've been watching bank after bank, financial after financial, either moving... READ MORE
In my last article I wrote about the recent disconnect between crude oil and oil services stocks. On a relative basis, oil services stocks had severely underperformed the S&P 500 from mid-October to early December despite crude oil prices trading flat to slightly lower. Since that article,... READ MORE
When I see a relationship in the market that tends to hold true over time, it always peaks my interest when the market varies from that "norm". That seems to be the case right now with oil services stocks. Generally speaking, when oil prices rise, money flows to... READ MORE
While there are lots of questions surrounding the sustainability of the stock market advance, there seems to be little resistance ahead for commodities, specifically gold and silver. The U.S. dollar is the primary variable. As you can see from the charts below, gold and silver seem to have no... READ MORE