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Gone Fishing on Monday
I am taking a day off on Monday. Art's Charts will return on Tuesday.... READ MORE
Archived News
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Watch the Yen ETF for Clues on the S&P 500
The Yen ETF (FXY) and the S&P 500 have been moving opposite each other for the last 6-7 months. This is because the Yen represents a safe-haven (risk-off) and the S&P 500 represents a risky asset (risk on). Accordingly, FXY broke down in June and $SPX... READ MORE
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S&P 500 FORMS BEARISH WEDGE -- RUSSELL 2000 EXCEEDS CHANNEL TRENDLINE -- TREASURIES HOLD SUPPORT AS 10-YEAR YIELD FAILS AT 1.7% -- TECHNOLOGY SPDR REVERSES AT KEY RETRACEMENT -- NETWORKING AND SEMICONDUCTOR ETFS FAIL AT JUNE HIGHS
S&P 500 FORMS BEARISH WEDGE ... Link for todays video. Stocks fell sharply after payrolls rose less than expected. The Labor Department reported that June non-farm payrolls rose 80,000, which was well below the consensus forecast of 100,000. Non-farm payrolls were also revised down by 1000 for... READ MORE
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Olympic Caliber Investing
I’ve been teaching college extension classes for over ten years, and I invariably see a disproportionate percentage of new investors being drawn to investing because they envision themselves as lone wolves and believe the markets provide an arena where they can fly solo and succeed. Nothing could be further... READ MORE
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Indicator Summary Turns Positive as NYSE AD Line Hits New High
With a number of upgrades, the indicator summary turned positive this week. I am, however, concerned, that this positive switch could be short-lived because some key sectors are lagging and the AD Volume Lines have yet to turn bullish. Also note that the advance since June is looking like a... READ MORE
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XLY Continues to Lag as UUP Surges off Support
Central banks around the world continue to ease monetary policy and open the money spigots. The Bank of England increased its third quantitative easing program by 50 billion pounds, the European Central Bank (ECB) cut all kinds of rates on Thursday and China surprised the markets with another rate cut.... READ MORE
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SURGING GRAIN PRICES PUT STRONG BID UNDER FERTILIZER STOCKS -- MOSAIC AND POTASH EXCEED 200-DAY LINES -- CF INDUSTRIES NEARS RECORD HIGH -- AGRIUM HITS 52-WEEK HIGH -- RYLAND IS LATEST HOMEBUILDER TO EXPERIENCE BULLISH BREAKOUT
CORN LEADS AG MARKETS HIGHER... Agricultural commodities have been on a tear over the last month. Chart 1 shows the Power Shares Agricultural Fund (DBA) in a parabolic rise since mid-June. Most of that surge is coming from grain markets as the result of drought conditions in the midwest. Corn,... READ MORE
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KLA-Tencor Holds the Gap $KLAC
KLA-Tencor (KLA) has an island reversal of sorts working the last three weeks. Notice how the stock gapped down in mid June and then back up in late June. Since gapping higher last week, the stock consolidated the last four days. A break above consolidation resistance would signal a continuation... READ MORE
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MDY Leads with Breakout - USO Surges above Resistance
Stocks have been trending higher since early June and the major index ETFs extended these trends on Monday-Tuesday. Uptrends suggest that the path of least resistance is up, but an economic avalanche over the next two days could make-or-break said trends. The European Central Bank (ECB) and Bank of England... READ MORE
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Charts: ABX, AFFX, AMCC, CDE, FIO, FLEX, GFI, TEVA, WEN
Charts of Interest: ABX, AFFX, AMCC, CDE, FIO, FLEX, GFI, TEVA, WEN This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise). We all need to think for ourselves when it comes... READ MORE
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TSX Composite Surges off Long-term Support
The big trend is down since early 2011 and a big head-and-shoulders could be forming, but, for now, the TSX Composite is showing life with a surge off support that extends all the way back to early 2010. Also notice that MACD formed a higher low and is poised to... READ MORE
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STAPLES, HEALTHCARE, AND TELECOM ETFS HIT NEW HIGHS -- ALL THREE ARE DIVIDEND PAYING GROUPS WHICH HAVE STRONG APPEAL WITH BOND YIELDS AT RECORD LOWS -- THEY'RE ALSO DEFENIVE IN NATURE WHICH MAKE THEM ATTRACTIVE CHOICES FOR CONSERVATIVE STOCK INVESTORS
DEFENSIVE ETFS HIT NEW HIGHS... The stock market's short term outlook has improved since last Friday's latest Euro bailout. What has caught my attention, however, is that the strongest chart patterns still belong to defensive stock groups. Chart 1, for example, shows a new high by... READ MORE
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NYSE AD Line Shows Strength with New High
Even though the NY Composite ($NYA) remains below its prior highs, the NYSE AD Line hit a new high this week and shows underlying strength. Advance-decline numbers measure the internal strength or weakness within an index. A new high in the AD Line shows internal strength that may carry thru... READ MORE
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SPY Edges above June High as GLD Consolidates after Breakout
The economic news was mixed on Monday. May construction spending hit its highest level in over 2 years. A decrease in public sector construction spending was offset by an increase in private sector spending. The ISM Manufacturing Index slipped below 50 (49.7), which is the first reading below 50... READ MORE
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DOW AND S&P 500 HIT RESISTANCE AT MID JUNE HIGHS -- CONSUMER DISCRETIONARY AND RETAIL SDPRS STILL UNDERPERFORMING -- AD RATIOS SHOW HIGH DEGREE OF PARTICIPATION -- S&P 500 %ABOVE 50-DAY SMA REMAINS IN BEAR MODE
DOW AND S&P 500 HIT RESISTANCE AT MID JUNE HIGHS... Link for todays video. Chart 1 shows the Dow Industrials with a pattern similar to the October-December surge, only smaller. The Dow surged in October, corrected in November with a sharp pullback and then surged again at the... READ MORE
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GLD and SPY Break Resistance ahead of Big Economic Week
This broken week could be pivotal for the markets. The week is short with a July 4th break on Wednesday. Despite the shortened week, there are several key economic reports and the big employment report is Friday. The European induced surge is positive from a technical standpoint, but we need... READ MORE
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HOME CONSTRUCTION ETF IS YEAR'S BIGGEST WINNER AND HAS ACHIEVED A BULLISH BREAKOUT -- LEADERS INCLUDE DHI, LENNAR, MERITAGE HOMES, AND TOLL BROTHERS -- RYLAND MAY BE NEXT -- S&P HOMEBUILDERS SPDR ALSO LOOKS STRONG -- USG CORP IS BUILDING MATERIAL LEADER
HOMEBUILDING ETF ACHIEVES BULLISH BREAKOUT ... The latest Euro rescue package announced on Friday caused a sharp upturn in risk assets at week's end. Global stocks and commodities soared, while bonds and the dollar fell. The Euro and most other foreign currencies surged. Arthur Hill covered Friday's... READ MORE
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Techs and Industrials Light up Sector Carpet
The S&P Sector Carpet is full of green on Friday with the darkest green showing up in the technology and industrials sectors. The average gain in the tech sector is 3.4%, while the average gain in the industrial sector is 3%. There are isolate spots of red... READ MORE
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EU AGREEMENTS PUSH SPANISH AND ITALIAN STOCKS HIGHER -- S&P 500 ESTABLISHES KEY SUPPORT LEVEL -- ELLIOTT WAVE PROJECTIONS FOR WAVE-C IN $SPX -- GOLD HOLDS SUPPORT WITH BIG SURGE -- SPOT LIGHT CRUDE BOUNCES OFF 2011 LOW
EU AGREEMENTS PUSH SPANISH AND ITALIAN STOCKS HIGHER... Link for todays video. EU leaders delivered another grand announcement that moved markets all over the world. In short, EU leaders agreed to form a banking union in the future. They also agreed to support sovereign debt markets in Spain and Italy... READ MORE
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Investing Routines: A Pillar of Any Successful Program
Ever drive a bumper car at an amusement park? Remember how the bumper car headed off in one direction until it bumped into what it deemed an immovable object and then backed off in a seemingly random direction. I’ve met investors whose methodology resembles something similar. Every experienced investor... READ MORE
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Indicator Summary Improves as June Rally Extends
The June run is set to continue with stock futures up sharply on Friday. Continued strength means the indicator summary is improving. Note that the NYSE AD Line and NYSE Net New Highs are bullish. The Bullish Percent Indices are bullish on the whole and the volatility indices fell sharply... READ MORE
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SPY Holds Support for a Fifth Time - FXE Set to Surge
Stocks ended mixed on Thursday as sharp rallies in the final hour paired losses significantly. The Nasdaq 100 ETF (QQQ) still lost over 1%, but the S&P Midcap SPDR (MDY) closed up .30% on the day. The nine sector SPDRs were mixed with four up and five down.... READ MORE
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HEALTHCARE SECTOR WEAKENS AFTER SUPREME COURT UPHOLDS OBAMACARE -- INSURERS FALL WHILE HOSPITAL OPERATORS SURGE -- S&P 500 NEARS TEST OF SUPPORT -- COMMODITIES SLUMP ON RISING DOLLAR -- BOND YIELDS CONTINUE TO DECLINE
FALLING BOND YIELDS WEIGH ON STOCKS... Bond yields continue to drop. Chart 1 shows a downtrend line defining the last downleg in the 10-Year T-Note yield that started in mid-March. After consolidating throughout most of June, the TNX may be on the verge of falling even further. The hourly bars... READ MORE
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XRT Underperforms - GLD Forms Bearish Pennant
Stocks extended their oversold bounce with modest gains on Wednesday. All major index ETFs were up with the Russell 2000 ETF leading the way (+1.63%). The Dow Industrials SPDR, S&P 500 ETF and Nasdaq 100 ETF were up less than 1%. Eight of the nine sectors were... READ MORE
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Charts of Interest: AEO, AMZN, AAPL, DRI, HOTT, SBUX, URBN
AEO Fails at Resistance. AAPL Stalls with Tablet War. HOTT Does not Look so Hot. Plus AMZN, DRI, SBUX, URBN This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise). We all... READ MORE
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Egyptian Stocks Surge after Election
The Egypt Index ETF (EGPT) surged in the lead up to Hosni Mubarak's resignation and then declined as democratic elections were called. The decline ended when uncertainty became certainty and Mohammed Morsi was declared president on 24-June. With the correction holding above the December low, it looks like... READ MORE
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QQQ HITS ITS MOMENT-OF-TRUTH -- DOW TRANSPORTS BREAKS RISING WEDGE TRENDLINE -- DISSECTING THE INDUSTRY GROUPS IN THE INDUSTRIALS SECTOR -- TRUCKING INDEX BREAKS KEY SUPPORT LEVEL -- PORTUGAL VERSUS SPAIN PREVIEW
QQQ HITS ITS MOMENT-OF-TRUTH ... Link for todays video. Chart 1 shows the Nasdaq 100 ETF (QQQ) breaking below the lower trendline of a rising wedge. This break follows a failure near broken resistance and the 50-61.80% retracement zone. Rising wedges are typically bearish patterns that form as counter trend... READ MORE
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SPY Gets Oversold Bounce - GLD Falls after Short Bounce
Stocks got an oversold bounce on Tuesday with the S&P MidCap 400 SPDR (MDY) leading the way. The gains, however, were quite modest with MDY up just .67% and the S&P 500 ETF (SPY) edging higher by .50%. Nothing to write home about for sure. Stocks... READ MORE
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A Bollinger Band Squeeze for American Eagle
American Eagle Outfitters (AEO) has been stuck in a consolidation since early May. Moreover, notice that this consolidation is narrowing as the Bollinger Bands contract. In the indicator window, Bollinger BandWidth is currently at its lowest level since February, which was scene of the last big contraction and breakout. Watch... READ MORE
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SPX Sets Up Test of 200-day as GLD Recoups Support Break
Stocks moved sharply lower on Monday with an extremely weak opening. The major index ETFs gapped down on the open, drifted lower throughout the morning and then edged off their lows in the afternoon. Even though selling pressure abated in the afternoon, buying pressure was certainly uninspiring and the gaps... READ MORE
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Charts of Interest: ABX, AFFX, CX, HD, MS, NVDA, UTHR
ABX Forms ABC Falling Wedge. HD Struggles at Resistance. NVDA Tests Gap Zone with Small Wedge. Plus AFFX, CX, MS, UTHR This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise). We... READ MORE
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Finding Green in a Sea of Red
Stocks were down sharply on Monday, but there were a two pockets of strength. The image below was taken from the ETF market summary. Notice that the Commodity Index Fund (DBC) and the Gold Miners ETF (GDX) are positive for the day. Also of note, gold, silver and corn were... READ MORE
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STOCKS PLUNGE AHEAD OF HEALTHCARE RULING AND EU SUMMIT -- COMPARING SPY MACD WITH OCTOBER 2011 -- DOLLAR AND TREASURIES SURGE IN FLIGHT TO SAFETY -- S&P 500 %ABOVE 150-DAY SMA ENTERS BATTLE ZONE -- ITALY AND FRANCE LEAD EU STOCKS LOWER
STOCKS PLUNGE AHEAD OF HEALTHCARE RULING AND EU SUMMIT... Link for todays video. Technical analysts do not like to focus on the news, but there are two big events unfolding this week. While I do not know how these events will unfold, it is pretty safe to say that these... READ MORE
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SPY Breaks Wedge Support as UUP Breaks Wedge Resistance
It is shaping up to be another big week on Wall Street and in Europe. On the news front, we have some key economic reports, another critical EU Summit and a potential ruling on healthcare reform. On the technical front, note that the major index ETFs failed at broken support... READ MORE
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Your Money Tree: The Tree of Color
Most people call it Technical Analysis, but I prefer to think of it as “Visual Analysis”. Picture it as a tree with many colorful branches. I gravitated towards Technical Analysis many years ago because I came to realize that I was visually wired as an individual and I appreciated the... READ MORE
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SETTING DOWNSIDE TARGETS FOR S&P 500 AND THE DOW -- XLY FORMS BEARISH WEDGE AND HITS RESISTANCE -- SILVER TRUST TESTS 2011 LOW AS BASE METALS ETF BREAKS DOWN -- GOLD FAILS TO HOLD BREAKOUT AND SETS UP SUPPORT TEST
SETTING DOWNSIDE TARGETS FOR S&P 500 AND THE DOW... Link for todays video. The European debt crisis has certainly dominated the news over the last few months and EU problems have been blamed for weakness in US equities. While EU woes may be partly to blame, I think... READ MORE
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Alcoa Traces out Descending Triangle on Point & Figure Chart
Alcoa (AA) is part of the Basic Materials SPDR (XLB) and in a clear downtrend. On the P&F chart (3 x .25), the stock broke to new lows in 2011 and then formed a descending triangle the last nine months. The red A marks October 2011 and the... READ MORE
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Indicator Summary Improves, But Remains Bearish Overall
Stocks made a valiant run in June, but it was cut short with Thursday's sharp decline. Even though a few indicator groups were upgraded, the bulk of the evidence remains bearish. Strength within the NYSE, pushed the NYSE AD Line sharply higher and NYSE Net New Highs into... READ MORE
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SPY Fails at Key Retracement - GLD Fails to Hold Breakout
The market started the week in risk-on mode, but made a sharp u-turn on Thursday with a move to risk-off. The major index ETFs were down sharply with small-caps (IMW) and mid-caps (MDY) leading the way. Both lost over 2.5% on the day. All sectors were down with the... READ MORE
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Sector Carpet Sees Red after the Fed
The image below comes from the Sector Carpet. First, notice that all sectors are lower. Second, notice that the Basic Materials SPDR (XLB), Energy SPDR (XLE) and Technology SPDR (XLK) have the most red. The Consumer Discretionary SPDR (XLY) is not far behind. Third, notice that the defensive sectors (XLU,... READ MORE