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CONSUMER DISCRETIONARY AND RETAIL ETFS STILL LEADING -- FINANCE SPDR HOLDS SUPPORT AND CHALLENGES RESISTANCE -- HOME CONSTRUCTION ETFS SURGE ABOVE FEBRUARY HIGHS -- IYT CORRECTS WITH FALLING FLAG PATTERN -- COPPER HITS RESISTANCE WITH RISING WEDGE
by John Murphy,
Chief Technical Analyst, StockCharts.com
CONSUMER DISCRETIONARY AND RETAIL ETFS STILL LEADING... Link for todays video. Even though stocks are still overbought and ripe for a pullback, it is hard to imagine a broad market correction unfolding as long as the Consumer Discretionary SPDR (XLY) and the Retail SPDR (XRT) are leading the market. As...
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Falling Yen Pushes Nikkei Towards 10K
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Lifted by exporters, the Nikkei 225 ($NIKK) is one of the best performing markets over the last eight weeks. The chart below shows the index surging from ±8400 to ±9900 since mid January (+17.8%). With lots of exporters, the sharp drop in the Yen ETF (FXY) no doubt helped...
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Small-Caps Underperforming, but Evidence Remains Largely Bullish
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The first selling pressure in some three months hit the stock market this week, but the short 1-3 day decline is a mere blip in the bigger uptrend. Stocks were overbought and some sort of corrective period is perfectly normal. The correction already started for the Russell 2000 ETF (IWM)...
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QQQ Challenges its Highs as TLT Breaks Down
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
There is nothing like the first decent dip after a strong advance. Stocks advanced for some 11 weeks and then corrected hard with a sharp decline Friday-Monday-Tuesday. The S&P 500 ETF (SPY) was down around 2% over these three days. Those who missed the rally or were under...
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Gold Bounces off Ichimoku Cloud
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Spot Gold ($GOLD) declined sharply and then found support right at the Ichimoku Cloud with a bounce the last two days. The bulls grabbed the edge with the cloud breakout in January and hold the edge as long as cloud support holds. Watch for a move above the Conversion Line...
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SPY Moves Back above Support Break at Dollar Hits Resistance
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After sharp declines that created oversold conditions on Tuesday, stocks firmed and bounced on Wednesday. The S&P 500 ETF (SPY) broke support at 135 on Tuesday, but moved back above this level on Wednesday. Even though the short-term trend is considered down, the bigger trend is up and...
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Charts of Interest: ADP, AMZN, ANF, BMY, CHKP, CNP, TBT
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
AMZN Consolidates with Triangle Pattern.
BMY Consolidates after Breakout.
CNP Forms Bull Flag at Trendline Resistance.
Plus ADP, ANF, CHKP, TBT.
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...
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CCI Bounces from Oversold Levels for Home Construction iShares
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The Home Construction iShares (ITB) corrected over the last few weeks with a falling flag pattern taking shape. The flag is still falling, but the Commodity Channel Index is rebounding with a move back above -100 (oversold). The next step for CCI is a trendline break.
Click this image for...
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SPY BECOMES SHORT-TERM OVERSOLD -- USING FIBONACCI RETRACEMENTS TO ESTIMATE SUPPORT ZONES -- UTILITIES FIRM AS MARKET TURNS DEFENSIVE -- TREASURIES COULD HOLD KEY TO NEXT MOVE IN STOCKS -- 10-YEAR TREASURY YIELD HOVERS AROUND 2%
by John Murphy,
Chief Technical Analyst, StockCharts.com
SPY BECOMES SHORT-TERM OVERSOLD ... Link for todays video. At this point, Tuesdays sharp decline is viewed as a mini-correction within a bigger uptrend. It is simply one big down day after an 11-week advance. So how far might this correction run? There are many methods to estimate potential support levels...
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SPY Breaks Support as UUP Challenges February High
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Stocks clearly broke down with a broad-based decline on Tuesday. Even though the short-term trend is now down, keep in mind that stocks are already short-term oversold and the medium-term trend is still up. On the S&P 500 ETF (SPY) chart, the ETF broke the support zone with...
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RISING DOLLAR KEEPS DOWNSIDE PRESSURE ON COMMODITIES -- CRB INDEX LOSES ANOTHER FOUR POINTS AFTER FAILING TEST OF 200-DAY AVERAGE -- GOLD LOSES MORE GROUND -- COPPER SELLS OFF SHARPLY ALONG WITH CHINA -- S&P 500 ENTERS DOWNSIDE CORRECTION
by John Murphy,
Chief Technical Analyst, StockCharts.com
RISING DOLLAR PUNISHES COMMODITIES ... The rally in the dollar that started last Wednesday is continuing. Chart shows the Power Shares Dollar Index (UUP) rising to its 50-day average today, after bouncing off its 200-day line last week. That's keeping downside pressure on commodities. Over the weekend, I showed...
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Morgan Stanley Leads Lower as Supervalu Bucks the Bears
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
With stocks down sharply in early trading on Tuesday, it is little surprise that the Sector Market Carpet shows a sea of red and all sectors are lower. There are, however, a few gainers and three come from the consumer discretionary sector, strangely enough. Morgan Stanley, the biggest loser, is...
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RSI Breaks Support for SPY and Dollar Forms High-Tight Flag
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The S&P 500 ETF (SPY) dipped below 137 on Monday. While this is still viewed as a correction within an uptrend, note that RSI dipped to its lowest level since mid December. StochRSI also dipped below .20 twice and failed to break back above the resistance zone (.50-....
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Charts of Interest: CAKE, CVH, EXPD, MRK, UIS, UNP
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
CAKE Consolidates after Sharp Decline.
EXPD Surges to Resistance.
MRK Bounds off October Trendline.
Plus CVH, UIS, UNP
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...
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The Noose Tightens for the Utilities SPDR
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
With the volatility contracting over the last few weeks, the Bollinger Bands on the Utilities SPDR (XLU) are at their narrowest since March 2011. The Bollinger BandWdith indicator is below .50 and the XLU range has narrowed to 75 cents. Watch support and resistance for the next directional clue.
Click...
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OVERBOUGHT APPLE WEIGHS ON OVERBOUGHT QQQ -- QQQ EQUAL-WEIGHT ETF LAGS APPLE-DOMINATED QQQ -- NETWORKING AND SEMICONDUCTORS LEAD TECHS LOWER -- MATERIALS AND UTILITIES SECTORS SHOW RELATIVE WEAKNESS
by John Murphy,
Chief Technical Analyst, StockCharts.com
OVERBOUGHT APPLE WEIGHS ON OVERBOUGHT QQQ ... Link for todays video. Selling pressure in the technology sector and Apple (AAPL) is weighing on the Nasdaq 100 ETF (QQQ) today. Chart 1 shows QQQ testing the steep trendline extending up from mid December. After a 20% advance (54 to 65), the ETF...
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IWM Breaks Support as UUP Surges Twice
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The S&P 500 ETF and Nasdaq 100 ETF remain in uptrends, but the Russell 2000 ETF broke support and the Dollar ETF appears to be breaking out. Relative weakness in small-caps and strength in the greenback could further weigh on stocks, which are still overbought and ripe for...
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INTERMARKET CHART SHOWS INFLATION / DEFLATION
Hello Fellow ChartWatchers!
In my last article, I went over two key Intermarket relationships - the one between the US Dollar and Commodities and the one between Commodities and the US Stock Market. (Keep in mind that John Murphy and Arthur Hill describe new Intermarket developments every day in the...
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DOLLAR INDEX BOUNCES OFF 200-DAY LINE
by John Murphy,
Chief Technical Analyst, StockCharts.com
An impressive upside reversal day on Wednesday enabled the Power Shares US Dollar Index (UUP) to bounce off its 200-day moving average as shown in Chart 1 (see arrow). That dollar turnaround was apparently the result of Mr. Bernanke omitting any mention of QE3 in his testimony before Congress that...
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BANKING ON A STRONG 2012
by Tom Bowley,
Chief Market Strategist, EarningsBeats.com
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&...
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RYDEX ASSET LEVELS ARE BEARISH
by Carl Swenlin,
President and Founder, DecisionPoint.com
At Decision Point we keep a close watch on asset levels in the Rydex mutual fund group as a way of evaluating investor sentiment. An important result of these efforts is the Rydex Asset Ratio, which is calculated by dividing assets in the Bear plus Money Market Funds by the...
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Small-caps Continue to Lag as Russell 2000 Breaks February Lows
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Relative weakness in small-caps remains a concern for the broader market. Smaller companies are less diversified and have less exposure abroad, which makes them more vulnerable to changes in the domestic economy. As such, small companies are like the canaries in the economic coal mine. They are the first to...
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JUMP IN THE DOLLAR PUNISHES COMMODITY PRICES AND PREVENTS UPSIDE BREAKOUT IN CRB INDEX -- PRECIOUS METALS WERE HIT ESPECIALLY HARD -- CRUDE OIL IS OVERBOUGHT BUT STILL IN UPTREND
by John Murphy,
Chief Technical Analyst, StockCharts.com
DOLLAR INDEX BOUNCES OFF 200-DAY LINE... An impressive upside reversal day on Wednesday enabled the Power Shares US Dollar Index (UUP) to bounce off its 200-day moving average as shown in Chart 1 (see arrow). That dollar turnaround was apparently the result of Mr. Bernanke omitting any mention of QE3...
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PRICE RELATIVE CONTINUES TO SINK FOR RUSSELL 2000 -- IWM BREAKS CONSOLIDATION SUPPORT AS MDY HOLDS CONSOLIDATION -- DOLLAR FOLLOWS THROUGH ON REVERSAL DAY -- MCCLELLAN OSCILLATOR TURNS NEGATIVE AS NASDAQ ADVANCES
by John Murphy,
Chief Technical Analyst, StockCharts.com
PRICE RELATIVE CONTINUES TO SINK FOR RUSSELL 2000 ... Link for todays video. Relative weakness in small-caps remains a concern because small companies are the canaries in the economic coalmine. Smaller companies are less diversified and have less exposure abroad, which makes them more vulnerable to changes in the US economy....
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February was a Good Month for Commodities (ex-Gold)
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The PerfChart below shows the performance for eight commodity related securities during February. Seven of eight are up with oil leading the charge. Even natural gas was higher. After a big hit on Wednesday, gold is the laggard and the Gold SPDR (GLD) shows a modest loss.
Click this image...
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Small Caps Lag, but Most Evidence Remains Bullish
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The bulk of the evidence remains bullish, but there was one downgrade on the indicator summary. Small-caps have seriously underperformed large-caps in February and the Price Relative ($RUT:$OEX) ratio moved sharply lower. Even though I am not quite ready to turn bearish on this indicator, it did merit a...
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IWM Tests Support as UUP Holds Mini Breakout
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The S&P 500 ETF (SPY) remains in an uptrend as buying pressure continues to outpace selling pressure. This is clear by the succession of higher highs and higher lows since December 19th. Even though this uptrend is overextended and ripe for a correction, there are simply no signs...
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Nasdaq Forms Huge Double Bottom on P&F Chart
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The Point & Figure chart below shows the Nasdaq forming two lows in the 1200 area and then breaking above its intermittent high this year. It looks like a massive Double Bottom with an upside price target around 5000. Each box equals 100 points to insure a long-term chart going...
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IWM Tests Support as GLD Breaks Down
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Stocks surged on the open with SPY and QQQ hitting new highs for the move, but promptly fell back and the major index ETFs closed with modest losses. Even though the opening gap-surge failed to hold, selling pressure was not that strong and the major index ETFs remain well above...
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Charts of Interest: AA, AKS, BAC, C, DOW, NOC
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
AA Breaks Wedge Trendline.
AKS Shows Serious Relative Weakness.
BAC Forms Pennant after Sharp Advance.
PLus C, DOW, NOC
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...
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COAL, METALS AND STEEL ETFS SHOW RELATIVE WEAKNESS -- DOLLAR FORMS BULLISH ENGULFING AT KEY RETRACEMENT -- GOLD FAILS TO HOLD FLAG BREAKOUT -- 7-10 YEAR T-BOND ETF FAILS AT RESISTANCE -- EUROPEAN FINANCE SECTOR HITS RESISTANCE
by John Murphy,
Chief Technical Analyst, StockCharts.com
COAL, METALS AND STEEL ETFS HAVE WEAK SCTR... Link for todays video. Signs of weakness are showing up in key parts of the materials sector. The Coal Vectors ETF (KOL), Metals & Mining SPDR (XME) and Steel ETF (SLX) have low SCTR scores (<30) and all three are trading...
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Transports Underperforming on Up-Down Days in February
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The major index market carpet shows the Dow Transports underperforming with its components showing more down days than up days in February. Since 31-Jan, the Trannies show -2 for net up days-down days for all components. This indicator counts the number of days each stock moves higher and then subtracts...
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SPY and QQQ Reach New Highs, but IWM Remains Range Bound
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
With another strong close and leadership from large-cap tech stocks, SPY and QQQ extended their uptrends and there is no change in the overall picture. Stocks remain overbought and ripe for a corrective period, which could form as a pullback or a flat consolidation. As noted last week, many pundits...
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WEAK DOLLAR CONTINUES TO PUSH PRECIOUS METAL ASSETS HIGHER -- SILVER HAS ALREADY EXCEEDED FOURTH QUARTER HIGH -- COEUR D ALENE MINES APPEARS ON VERGE OF BULLISH BREAKOUT -- GOLDCORP IS LEADING GOLD MINERS HIGHER
by John Murphy,
Chief Technical Analyst, StockCharts.com
DOLLAR INDEX CONTINUES TO WEAKEN... After peaking in early January, the U.S. Dollar Index continues to lose ground. Chart 1 shows today's dollar drop approaching a test of its 200-day moving average. When the dollar drops, commodities rise. And they've been doing just that since...
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Treasuries and Commodities Moving Higher
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The CRB Index ($CRB) and the 10-year Treasury Note ($UST) usually move in opposite directions. However, as the John Murphy's Intermarket PerfChart shows, this has not been the case the last six days. Even though the CRB Index is up over 2% since 17-Feb, the 10-year Treasury Note...
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Oil Corrects, Treasuries Extend Surge and Stocks Hold Uptrends
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The warning signs persist, but stocks remain in clear uptrends and selling pressure remains muted. First, recent strength in treasuries is a concern because they are negatively correlated with stocks. Second, the major index ETFs are overextended and ripe for a pullback or consolidation. Third, small-caps have been underperforming since...
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Charts of Interest: ADP, KR, LLY, STT, TSN
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
KR Confirms Harami with High Volume Surge.
STT Challenges Triangle Trendline.
TSN Firms at the 50% Retracement Line.
Plus ADP and LLY.
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)...
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Euro ETF Retraces 50% of its Prior Decline
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The rally in the Euro Currency Trust (FXE) has been rather sharp, but the ETF has still only recovered half the prior loss. Notice how FXE declined from 142 to 126 (16 points) and then advanced to 134 (8 points). Like the October surge, this advance could be just a...
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IWM BOUNCES TO HOLD CONSOLIDATION SUPPORT -- FINANCE SECTOR CONSOLIDATES AFTER BIG GAINS -- TLT FORMS POTENTIAL CUP-WITH-HANDLE -- OIL AND GASOLINE BECOME OVEREXTENDED -- DAX STALLS AT BROKEN SUPPORT
by John Murphy,
Chief Technical Analyst, StockCharts.com
IWM BOUNCES TO HOLD CONSOLIDATION SUPPORT... Link for todays video. Stocks moved lower on Mondays open, but quickly surged after a report showed pending home sales at their highest level since April 2010. Chart 1 shows the Russell 2000 ETF (IWM) falling towards support on the open and then bouncing...
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Treasuries Bounce Along with Oil and Stocks
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
It was a rather strange week on the intermarket front. Stocks and oil moved higher, which is normal. However, treasuries also moved higher, which is not normal. Strength in stocks and oil should be offset by weakness in treasuries. Strength in treasuries could signal that some traders are taking a...
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