FOREIGN STOCK ETFS GAP LOWER ... Foreign stocks are having a really bad day. Chart 1 shows EAFE iShares (EFA) gapping 4% lower. In so doing, the EFA has left a potential "island reversal" top behind. [An island reversal is formed when an up gap is followed shortly by... READ MORE
Stocks edged lower on Wednesday as the Fed failed to inspire a continuation of the current rally. Except for the Nasdaq 100 ETF (QQQ), which gained .08%, the major index ETFs closed fractionally lower. Seven of the nine sectors were down with the Industrials SPDR (XLI), Basic Materials SPDR (XLB)... READ MORE
AEO Extends Consolidation with Tight Triangle. BIDU Shows Relative Weakness. JBLU Consolidates after High Volume Surge. Plus FFIV, FLEX, IDTI, LEN, OXY, RIMM, STT, TOL 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... READ MORE
Cheesecake Factory (CAKE) moved sharply lower at the beginning of June and then rebounded with the market the last few weeks. This rebound, however, is running into resistance from the gap and prior high. Also notice that MACD turned down and is on the verge of breaking below its signal... READ MORE
10-YEAR TREASURY YIELD REMAINS BELOW SUPPORT BREAK... Link for todays video. Noting recent weakness in the economy and disappointing employment growth, the Fed voted to extend operation twist until yearend. This means the Fed will sell treasuries with short maturities (three years or less) and buy treasuries with longer maturities... READ MORE
Stocks moved higher again on Tuesday, but performance was lopsided again. The Russell 2000 ETF (IWM) led the market with a 1.73% gain, but the S&P 100 ETF (OEF) lagged with a .37% gain. Seven of the nine sectors were up. Money moved out of the Consumer... READ MORE
HIGH YIELD BOND ETF SURGES ... Action within the various bond categories show more optimism. Chart 1 shows the IBoxx High Yield Corporate Bond Fund (HYG) surging to the highest level in a month. The HYG cleared its 50-day moving average last Thursday. Since junk bonds are highly correlated to stocks,... READ MORE
The PerfChart below shows the three month performance for five commodity indices and the CRB Index ($CRB). All five are down and $CRB is down around 14%. Blame it on energy, which is down over 21%. Precious metals have held up relatively well with a decline less than 4%. Click... READ MORE
It was a mixed day for stocks with the Dow Industrials SPDR (DIA) moving lower and the Nasdaq 100 ETF (QQQ) moving higher. The market was weighed down by the Finance SPDR (XLF) and Energy SPDR (XLE), but lifted by the Technology SPDR (XLK) and the Consumer Discretionary SPDR (XLY)... READ MORE
GFI Forms Pennant. ISIL Surges on Big Volume. MOS Breaks Inverse HS. Plus FICO, ISRG, NYT, THC, TSN 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... READ MORE
The image below, which stems from the sector summary at StockCharts.com, shows the key industry groups within technology sector. On Monday, computer hardware, internet and semiconductors were leading the way higher. Users can click on these names to see the individual stocks, which is a great way to identify... READ MORE
TECHS LEAD HIGHER AS THE NASDAQ 100 ETF BREAKS RESISTANCE... Link for todays video. US stocks were mixed on Monday, but the technology sector showed some relative strength with good gains. Chart 1 shows the Nasdaq 100 ETF (QQQ) forming an island reversal at the beginning of June, consolidating and... READ MORE
And the results are in! Pro-bailout party New Democracy won the Greek election with around 30% of the vote. They will now have three days to form a coalition with a parliamentary majority. Now comes the tough stuff. The new government will need to renegotiate the austerity package, pass this... READ MORE
My Tuesday message showed falling commodity prices weighing on stock values. The same is true with Treasury bond yields which have fallen to record lows. Falling bond yields are symptomatic of economic weakness. Chart 1 compares the yield on the 10-Year T-Note (green bars) to the S&P 500... READ MORE
I have been expecting another short decline to finish out the right shoulders of a reverse head and shoulders pattern, but once again the Mr. Market said: "Expect whatever you like. I don't care." My problem is that, being a person who likes things to be... READ MORE
The Russell 2000 ETF (IWM) got a bounce at the end of the week, but remains in a trading range since the June 6th gap. There are two dynamics at work on this chart. First, the medium-term trend is down after the ETF broke neckline support from a head-and-shoulders pattern.... READ MORE
Highly educated people are, for the most part, trained to ask the question “Why?” Engineers, accountants, doctors, lawyers and the like invariably want to know all they can about why certain things happen. The assumption is, of course, that knowing why will help you do the right thing in your... READ MORE
S&P 500 ETF TURNS INDECISIVE BELOW RESISTANCE... Link for todays video. The stock market is looking ahead to next week and the potential for more stimulus. It used to be stimulus first and market response second. Now it appears that the market is getting ahead of the curve... READ MORE
The Dow surged over 150 points on Thursday and broke above its May high. With only 30 stocks, chartists can use the CandleGlance feature at StockCharts.com to find which stocks led the move. The Dow is a price weighed average and the stocks with the highest price have the... READ MORE
After a rebound last week, stocks turned flat this week and treaded water ahead of the Greek elections. The AD Volume Lines established minor resistance levels with the late May highs and breakouts would be short-term bullish. However, this would not be enough to turn medium-term bullish again. Also note... READ MORE
Stocks caught a bid on Thursday with the major index ETFs closing modestly higher. The Dow Industrials SPDR (DIA) led the way with a 1.19% advance. The Nasdaq 100 ETF (QQQ) lagged with a .37% advance. All sectors were up with the Energy SPDR (XLE) and Healthcare SPDR (XLV)... READ MORE
FALLING BOND YIELDS WEIGH ON STOCKS... My Tuesday message showed falling commodity prices weighing on stock values. The same is true with Treasury bond yields which have fallen to record lows. Falling bond yields are symptomatic of economic weakness. Chart 1 compares the yield on the 10-Year T-Note (green bars)... READ MORE
There is a real gut check underway in the stock market. The S&P MidCap 400 SPDR (MDY) surged last week and then corrected the last 5-6 days with a falling flag/wedge. This could be a bullish continuation pattern, but one must wonder if the bulls have the... READ MORE
Stocks moved higher in the first half of the day and then lower in the second half. With the afternoon decline outpacing the morning advance, the major index ETFs closed modestly lower. Mid-caps led the decline with the S&P MidCap 400 SPDR (MDY) losing 1.34%. Small-caps were... READ MORE
LTD Forms Flat Flag after Sharp Decline. MMM Forms Harami at Key Retracement. SBUX Breaks Descending Triangle Support. Plus AES, APC, COV 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)... READ MORE
The Energy SPDR (XLE) remains in a downtrend overall, but signs of life are appearing as the ETF gapped higher last week and formed a pennant over the last five days. A break above this short-term consolidation could signal a continuation of the early June bounce and target further strength... READ MORE
ANALYZING THE RETURN TO RISK IN OCTOBER 2011... Link for todays video. Is the current decline a correction like August 2011 or is this the start of a bigger bear move? All bear markets start as corrections, but not all corrections lead to bear markets. Even though the April-June decline... READ MORE
Stocks rebounded after Monday's bearish reversal day with the major index ETFs gaining over 1%. The Dow Industrials SPDR (DIA) led the way with a 1.61% gain, while the S&P MidCap 400 SPDR (MDY) lagged with a 1.01% gain. Eight of nine sectors were... READ MORE
EAFE ISHARES NEAR TEST OF NECKLINE... I recently wrote about the possibility that foreign stocks were tracing out "head and shoulder" tops. Chart 1 shows an updated version of that potential pattern. The pattern is marked by three prominent peaks over the last two years, with the middle... READ MORE
No wonder the S&P 500 ETF (SPY) cannot make up its mind on direction. The ETF broke key support in mid May and the 50-day moving average turned lower. Combined with Monday's high, these no mark the rock or resistance zone. The support zone, or hard... READ MORE
Stocks surged on the open with the S&P 500 exceeding 1335 in the first 5 minutes of trading. Selling pressure hit after five minutes of euphoria and the index closed below 1308. $SPX swung 2% from high to low and closed down over 1% on the day. Overall,... READ MORE
AEO Forms Triangle as Retail Sales Report Looms. HAS Shows Weakness with Pennant Break. TE Breaks Falling Wedge Resistance with Good Volume. Plus BXP, DRI, F, HES, TOL, VLO This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell... READ MORE
With a strong open and weak close on Monday, hundreds of stocks and ETFs formed either dark cloud patterns or bearish engulfing patterns. The chart below shows Home Depot (HD) forming a dark cloud near resistance and with the Stochastic Oscillator overbought. A move below 80 in the Stochastic Oscillator... READ MORE
DIA FAILS AT BROKEN SUPPORT AGAIN... Link for todays video. A key tenet of technical analysis suggests that broken support turns into resistance. The reverse is also true as broken resistance turns into support. While it does not work all the time, it works often enough to keep in mind... READ MORE
Stocks opened weak on Friday, but rallied throughout the day and closed strong. Rumors of a Spanish bailout fueled los toros (the bulls). Small-caps led the way higher with the Russell 2000 ($RUT) gaining over 1% on the day. All nine sectors were up with the Finance SPDR (XLF) and... READ MORE
CONSUMER DISCRETIONARY SPDR FAILS AT RESISTANCE... Link for todays video. As with August 2011, volatility invaded the stock market over the last three weeks. Chart 1 shows the Consumer Discretionary SPDR (XLY) breaking below support in mid May, failing at broken support in late May and moving sharply lower last... READ MORE
When I was a graduate student in business school, I had the privilege and good fortune of watching John Elway play football as the quarterback for Stanford and seeing him around campus in a multitude of different situations. I was struck by the fact that, even as an undergraduate student... READ MORE
The German DAX Index peaked around 7200 in mid March and moved below 6000 in early June. That's over 15% in less than three months. Despite looking oversold, there are no signs of a reversl as the index remains below its late May high. In the indicator window,... READ MORE
Stocks bounced this week, but the bounce was clearly not enough to rattle the indicator summary, which remains firmly negative. The AD Volume Lines surged, but remain well below their May support breaks and in downtrend. The major index ETFs also surged, but have yet to negate the May support... READ MORE
Stocks asked for stimulus and failed to get what they wanted. The EU has yet to come forth with a concrete plan for EU banks, Bernanke did not offer hints of quantitative easing and the ECB stands ready to act. Allez, act already! Bernanke said the Fed would ease if... READ MORE