Market Recap for Wednesday, March 28, 2018 The U.S. stock market settled down on Wednesday and that could be very good news for the bulls. High volatility ($VIX) has stunned equity traders the past two months after a 15 month period of little volatility. But on Wednesday, the VIX... READ MORE
The Dollar has been poised for a breakout for some time. The PMO has been rising nicely, but UUP has been banging its head on overhead resistance with not much success. Looking at the big picture, relative strength has been shuffling toward defensive sectors like Consumer Staples and Utilities which... READ MORE
DOW AND THE S&P 500 ARE RETESTING 200-DAY LINES ... The Dow and the S&P 500 are still in the process of retesting underlying support levels near their 200-day averages and February lows. Chart 1 shows the Dow Industrials retesting its February intra-day low at 23,400... READ MORE
The pickings are slim as the market corrects and may charts turn ugly. I am noticing some strength in big pharma with Merck (MRK) up in March and Pfizer (PFE) holding above the early February low (so far). The chart shows PFE with a zigzag uptrend since June. The stock... READ MORE
Market Recap for Tuesday, March 27, 2018 I've discussed since early February the difficulty in trading a market with an elevated Volatility Index ($VIX). While returns can be awesome when you make great calls, the opposite is true when your timing is less than perfect. Here's... READ MORE
Market Recap for Monday, March 26, 2018 It was an impressive rally on Wall Street on Monday. All nine sectors advanced at least 1%. The four aggressive sectors - technology (XLK, +3.80%), financials (XLF, +3.24%), consumer discretionary (XLY, +2.95%) and industrials (XLI, +2.42%) - were the... READ MORE
After day with the SPX up 2.72% and the NDX up 3.78%, it may seem strange to be talking about the loss of BUY signals on the DecisionPoint Scoreboards. My answer is that one day does not a bull market make. However, I'm not on board... READ MORE
I make lots of notes on my charts. As conditions unfold I have a sense for what my thinking was and whether adjustments need to be made in tactics. In the ‘good old days’ stock charts were plotted by hand and notes were jotted onto charts; now we have wonderful... READ MORE
The S&P 500 was shaken with a plunge below its 200-day SMA on Friday and this gives chartists a reference point to compare with other charts. Personally, I do not think moving averages represent support or resistance levels. Moving averages provide price points that chartists can use to... READ MORE
* Universe, Market Regime and Ground Rules. * Know Your Indicators. * Sample Signals for IJR and QQQ. * Testing the Big Four. * Plotting Equity and Drawdowns. * Testing Four Leveraged ETFs. * Conclusions and Caveat Emptor! Introduction and Overview... Stocks fell sharply the last two weeks and RSI became oversold for most major index ETFs.... READ MORE
Market Recap for Friday, March 23, 2018 All of our major indices tumbled on Friday, but none are struggling quite the same as the Dow Jones, which fell another 425 points on Friday to close at its lowest level since November 2017. There are likely three reasons for this relative... READ MORE
Wall Street is loaded with experts who make forecasts on the future market direction and market level many times a day. If you see a rather serious technical analyst on television, you can count on the talking head interviewer to ask him/her where the market is going. They must... READ MORE
WORLD STOCK INDEX HEADED FOR A TEST OF ITS FEBRUARY LOW AND ITS 200-DAY AVERAGE... Stocks around the world had a terrible week. Foreign stocks fell along with the U.S. That's not unusual since global stocks become tightly correlated on the way down. Selling in Chinese stocks... READ MORE
The Federal Reserve Bank (Fed) has indicated their intention to raise interest rates during 2018 and 2019. In fact, US Treasury interest rates have been rising for quite some time. We have been following the movement of bond prices with a Wyckoffian eye during this downtrend of prices (click here... READ MORE
* Another Bearish Breadth Thrust. * High-Low Percent Indicators Remain Bullish. * %Above 200-day Indicators Dip below 50%. * Index Table Remains Bullish. * Sector Breadth Highlights. * Bottom Line: Still a Bull Market. Breadth Overview ... The following breadth assessment is based on three breadth indicators. First, the 10-day EMA of AD Percent is used to... READ MORE
This week the rising wedge we had identified resolved downward, as expected. Once that happened, we needed to provide a context that could help determine an initial downside target, so we focused on the double top confirmation line, drawn across the low between the tops. That line was violated on... READ MORE
* The 2018 Roller Coaster Continues. * High-Low Line Turns Down for XLY. * SPY Leads the Wedge Break Downs. * XLF, XLV, XLY and XLB Break Wedge Lines. * When Oversold is Not Such an Opportunity. * XLI Breaks Triangle Support. * Breakaway Gaps for XLK. * Gold Bounces off Support Zone. * Oil Holds Breakout. * Notes from... READ MORE
Market Recap for Thursday, March 22, 2018 Let me start today's article by saying that the stock market loathes uncertainty. Traders love boring small gains day after day with subtle, anticipated pullbacks to key moving averages or short-term price support levels. You can always tell when the stock... READ MORE
* Breadth is more of a positive than a negative factor * Global breadth is also positive * Dow Diffusion Indicator close to a buy signal * Consumer cyclicals versus technology Since early February, the US equity market, in the form of the NYSE Composite, has been in a trading range. This is flagged... READ MORE
Two more BUY signals were lost on the DecisionPoint Scoreboards. We haven't seen the Intermediate-Term Trend Model Neutral signals on the Scoreboards in over a year. This consistent deterioration is worrisome and combined with bearish chart patterns and indicators, I'd have to say the correction is... READ MORE
U.S. STOCK INDEXES BREAK SUPPORT LINES ... Major U.S. stock indexes are under heavy selling today and are breaking some important support lines. Chart 1 shows the Dow Industrials falling below a trendline extending back to early February. That signals a possible drop back to its February intra-day low... READ MORE
Market Recap for Wednesday, March 21, 2018 It was a volatile session on Wednesday, particularly after 2pm EST when the FOMC policy statement was released. In Fed Chairman Jerome Powell's first meeting as Fed Chief, the Fed raised the benchmark funds rate a quarter point from 1.50%... READ MORE
* QQQ Holds Gap for Three Days. * SPY Holds Wedge Break. * Charting the Fab Five. * MMM and Honeywell Join Dow Triangulation. QQQ Traps Traders on the Island ... QQQ formed an island reversal with Monday's gap down and held this gap for three days. Chartists sometimes apply time filters to... READ MORE
Below you'll find the latest DP Scoreboards. I've included a Sector Scoreboard that Carl and I will keep updated for analysis of sector rotation. The NDX is the only Scoreboard index holding its own. I don't think the NDX is out of the woods... READ MORE
* Gold and the Dollar Hit Inflection Points. * Dollar Bumps Into Short-term Resistance. * Gold Miners Underperform Gold. * GDX Tests Low End of Range. Gold Channels Harden... For the third time in six weeks, the Gold SPDR (GLD) is surging above the 125 level and making a bid to reverse within a... READ MORE
PRICE OF OIL NEARS THREE-YEAR HIGH... WTIC Light Crude is trading more than 2% higher today near $65. The weekly bars in Chart 1 (plotted through yesterday) show Light Crude Oil also nearing another three-year high. Brent crude is in a similar situation. Chart 2 shows the United States Oil... READ MORE
The S&P SmallCap iShares (IJR) held up better than the S&P 500 SPDR (SPY) during last week's decline and small-caps are outperforming large-caps in 2018. The chart shows IJR moving above its late February high with a surge above the blue zone in mid-March.... READ MORE
Market Recap for Tuesday, March 20, 2018 There weren't huge gains on Tuesday, but given how poorly Monday went, I'd say yesterday was a very solid day. On Monday, we saw the Volatility Index ($VIX) spike more than 20% back above 19 as fear ramped up.... READ MORE
Just like dominos, the BUY signals on the DP Scoreboards are toppling and we're finally seeing some deterioration on the NDX. With Facebook (FB) and other technology stocks taking it on the chin the past few days, the NDX is finally succumbing to the downside pressure. A look... READ MORE
OVER-EXTENDED TECHNOLOGY SPDR TURNS LOWER... Last Wednesday's message showed the technology sector looking over-extended and vulnerable to profit-taking. So this week's tech selling wasn't too much of a surprise. The daily bars in Chart 1 shows the Technology SPDR (XLK) falling yesterday in heavy... READ MORE
Last week I was the guest of Tom and Erin in their Market Watchers Live show on stockcharts.tv. In that show, I talked about the difference between open and closed universes and what it means for a Relative Rotation Graph and following that discussion we had a look at... READ MORE
* Broad Selling in Technology. * SPY Erases the Gap. * New Floors and Ceilings. * Defense Stocks Buck the Selling. * Six Stocks with Bullish Continuation Patterns. * Oil Consolidates within an Uptrend. * Oil and XES Still Positively Correlated. * XES Battles Retracement Zone. Broad Selling in Technology ... The technology sector led the way lower as... READ MORE
Market Recap for Monday, March 19, 2018 Ok, let's start with the obvious. It was an ugly day for U.S. equities. The Dow Jones, S&P 500, NASDAQ and Russell 2000 fell 1.35%, 1.42%, 1.84% and 0.98%, respectively. The Volatility Index ($VIX)... READ MORE
You'll note three BUY signals were lost today on the Dow and the OEX. The Industrials have been struggling. The Dow was unable to trigger a PMO BUY signal when the other three indexes had managed them with ease. The picture is getting worse for the Dow and... READ MORE
Dow component Disney (DIS) is feeling the heat today with a triangle break and move below the 200-day moving average. Disney has been one of the weaker stocks in the Dow Industrials over the last few years. The stock peaked way back in August 2015 and formed lower highs the... READ MORE
This article is a follow up of the previous one in this series - Building a Rules-Based Trend Following Model - 6. Table A is an example of the detailed research behind each of the various indicators used in the weight of the evidence. This example uses over 30 years... READ MORE
Market Recap for Friday, March 16, 2018 There was an industry-wide rally in energy stocks (XLE, +0.89%) on Friday and utilities (XLU, +0.88%) also performed well. The latter looks much better technically, however, as it has broken above its 50 day SMA. There's still much work... READ MORE
Editor's Note: This article was originally published in John Murphy's Market Message on Thursday, March 15th at 12:34pm ET The two converging trendlines in the chart below show the Dow Industrials forming a potential "symmetrical triangle" (which has one trendline falling and the... READ MORE
The NASDAQ Composite and NASDAQ 100 became the first two key indices to break to fresh all-time highs and their 2018 relative strength can be underscored by this chart: The NASDAQ 100 is seeing money rotate its way in 2018 so it's prudent to focus on this index... READ MORE
The Dow Industrials is in the midst of a narrowing consolidation and chartists should watch the March range for the next directional clue. The 2018 range extends from the January high (26,617) to the February low (23,360), which is 3257 points or around 13% of the current close.... READ MORE