OVERBOUGHT S&P 500 PULLS BACK FROM SUMMER HIGH ... The stock market is due for a pullback and it appears one may be starting. Chart 1 shows the S&P 500 coming within a couple of points of its July intra-day high at 1256 (red circles). It'... READ MORE
With further strength this week, it is little surprise that the indicator summary remains unchanged at +10. Even though there are no signs of weakness, there are plenty of overbought signs. Eight of the nine sector Bullish Percent Indices are above 80%. The current advance in the major index ETFs... READ MORE
While the medium-term and long-term outlooks remain bullish, stocks are in a rather precarious short-term situation. The major index ETFs are overbought, sentiment is excessively bullish and Greek lawmakers have yet to pass the austerity measures required to receive EU aid. Greek legislators and the EU are likely playing a... READ MORE
The PerfChart below shows a selection of intermarket related ETFs. Notice that the Commodity Index Fund (DBC), Base Metals ETF (DBB) and Gold SPDR (GLD) are up substantially year-to-date, as are stocks. In contrast, the Dollar and Treasury ETFs are down. Money is embracing risk this year. Click here for... READ MORE
The bulls are piling on. While we can never be sure when exactly it happened, note that Nouriel Roubini, aka Dr. Doom, recently turned bullish. In fact, his director of equity and allocation strategy, Gina Sanchez, suggested that the current rally could extend for months. However, Roubini is looking for... READ MORE
CPN Surges above Resistance with Big Volume. GFI Forms Pennant Consolidation. WLL Breaks Ascending Triangle Resistance. Plus ABX, GG, YHOO 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
STOCK ADVANCE SLOWS, BUT REFUSES TO BUCKLE... Link for todays video. The stock market remains in an utprend overall, but trading has turned indecisive over the last few days. Basically, stocks are in a holding pattern of sorts. The trend is clearly up and turning bearish now would be an... READ MORE
The stock market is clearly in rally mode this year with the offensive sectors leading the charge. Notice that the consumer discretionary, industrials, finance and technology sectors are outperforming the S&P 500. In contrast, the consumer staples, healthcare and utilities sectors, which are defensive, are lagging the S&... READ MORE
After a narrow day for Average True Range (ATR) indicator on Monday, stocks started the day weak on Tuesday, but quickly recovered and moved into positive territory. Even though stocks are overbought and ripe for a correction, selling pressure remains minimal and the bulls still reign supreme. SPY held support... READ MORE
The Utilities SPDR (XLU) was relatively weak in January as it failed to partake in the broad market advance. More recently, the ETF surged in late January and again on Tuesday with moves that reinforce support in the 34-34.5 area. MACD flattened over the last two weeks and a... READ MORE
DOLLAR INDEX HITS THREE-MONTH LOW... The U.S. Dollar Index peaked a month ago and has been falllng since then. It fell to the lowest level in three months today. That has a lot of important intermarket implications. The most direct beneficiaries are commodities -- and gold in particular. Chart... READ MORE
Today could be volatile. First, stocks are overbought after a seven week advance. Second, Bernanke testifies before Congress today. Third, Greek debt negotiations continue and Greek unions put out the call for a general strike on Tuesday. Fourth, the Euro is short-term overbought and consolidating, while the Dollar is short-term... READ MORE
$AEO Retraces 61.80% with Rising Wedge. $DVN Forms Large Triangle Consolidation. Plus $ADP, $PLCE, $WCRX This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise). We all need to think for... READ MORE
Despite all the "issues" surrounding Europe, the German DAX Index ($DAX) is going strong and outperforming the S&P 500. In fact, the DAX is outperforming the Shanghai Composite ($SSEC) and the Nikkei 225 ($NIKK) as well. The chart below shows that the DAX is up a... READ MORE
BRENT OUTPERFORMS WTI AND BREAKS RESISTANCE... Link for todays video. West Texas Intermediate Crude (WTI), also known as light sweet crude, is used to benchmark oil prices in the US. Light refers to the density and sweet refers to the sulfur content, both of which are low. Brent Crude, which... READ MORE
Stocks extended their short-term uptrends with strong moves on Friday. SPY, QQQ and IWM all hit new highs for the move and the short-term uptrends are now entering their eighth week. These moves started with a gap and breakout on December 19th. Overall, stocks are still quite overbought and ripe... READ MORE
(THIS WEEK'S DECISION POINT ARTICLE WAS WRITTEN BY GUEST WRITER ERIN SWENLIN HEIM) As many of you are aware, I've been doing my duty as a citizen of this great country by serving on a jury. It has been interesting, to say the least. The trial... READ MORE
Hello Fellow ChartWatchers, Today I'm please to announce the grand opening of our Advanced Scan Library. We've collected some of the best scans available and posted them in this new ChartSchool area for everyone to see. We have a big collections of Sample Scans that will... READ MORE
My market message from Thurs, Jan 26th, argued for the inclusion of Canada in a foreign stock portfolio. I'm going to expand on Canada's unique role in the global intermarket picture in this message. In my view, Canada is unique for at least three reasons. First,... READ MORE
The 2012 trading year has begun with a "bang" to be sure. In terms of the S&P 500, we find that 16 of the 23 trading sessions have traded to the upside, with no losing session down more than -8 points or -0.6%. This is... READ MORE
Two weeks ago, I wrote that equities were very overbought and quite complacent. While we didn't see any selling of substance, the market did struggle to move up - that is, until Friday's Nonfarm Payrolls hit the wires. What a blowout number it was! Let'... READ MORE
With a string of positive economic reports lifting stocks this week, the S&P 500 ETF (SPY) closed higher for the fifth consecutive week. Friday was a big reporting day with Factory Orders showing strength, IWM Services indicating expansion and the employment rate coming down. These positive reports should... READ MORE
As the Sector Market Carpet shows, the finance sector has the biggest average gain (2.4%) thus far on Friday. Technology is second with the average stock gaining 1.9% on the day. Notice that the boxes are different sizes because of market cap mode. Stocks with the highest market... READ MORE
S&P 500 ETF CHALLENGES 2011 HIGHS... Link for todays video. A string of positive economic-related reports lifted stocks on Friday and the S&P 500 ETF (SPY) is poised to close higher for the fifth consecutive week. Factory Orders expanded at a healthy clip, IWM Services expanded... READ MORE
There is no change in the indicator summary as all ten indicator groups remain in bull mode. The NYSE AD Line surged to yet another 52-week high and the Nasdaq AD Volume Line moved sharply higher the last six weeks. All nine Bullish Percent Indices are above 60% and seven... READ MORE
And now for the Employment Report....and Factory Orders....and ISM Services. This is like the golden trio of economic reports. In one day we will cover employment, manufacturing and services. Stocks are overbought. Treasuries are at resistance and well above their late January lows. The Dollar is oversold after... READ MORE
The stock market rallied in January, but Nordstrom (JWN) traded flat and shows relative weakness. Even though the stock has yet to break down, volatility is narrowing as the Bollinger Bands contract. Notice that Bollinger Band width is at its lowest in over six months. Watch the range for the... READ MORE
According to the Wall Street Journal, "Caterpillar's 20% stock surge this month contributed nearly 34% of the Dow Jones Industrial Average's 415-point advance." As a price weighted "average" the highest priced issues in the Dow carry the most weight. This is also... READ MORE
The first trading day of the month produced a relatively modest gain in the S&P 500 ETF, but big gains in the Russell 2000 ETF and S&P MidCap 400 SPDR. Stocks gapped up on the open and then consolidated above their gaps. Even though there was... READ MORE
Careful out there. It is still earnings season. AGN Forms Outside Reversal at Resistance. CHH Forms Bearish Wedge and Bearish Engulfing. IMN Traces out Ascending Triangle. Plus AMX and CVN This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or... READ MORE
SMALL-CAPS AND LARGE-TECHS LEAD YEAR-TO-DATE... Link for todays video. Before looking as small-cap performance, lets distinguish between the January barometer and the January effect. The January barometer refers to the historical tendency for January performance to set the tone for the entire year. As January goes, so goes the rest... READ MORE
The intermarket arena shows a shift from risk-on to risk-off over the last six to seven days. The 20+ Year T-Bond ETF (TLT) and the Gold SPDR (GLD) are up over 4%, while the US Oil Fund (USO) and the S&P 500 ETF (SPY) are down slightly. The... READ MORE
Electronic Art (ERTS) declined to the August low in mid January and then firmed the last two weeks. A bullish engulfing formed on Friday as the stock opened weak and closed strong. ERTS follow up on this pattern with a breakout on above average volume. The trend since November remains... READ MORE
CLOSELY CORRELATED WITH US MARKET ... Last Thursday's message argued for the inclusion of Canada in a foreign stock portfolio. I'm going to expand on Canada's unique role in the global intermarket picture in this message. In my view, Canada is unique for at least... READ MORE
Stocks corrected somewhat over the last three days, but managed to recover after a weak open on Monday. Risk-on is in the air this morning after the EU agreed to a "fiscal compact". Stocks futures, oil, gold and the Euro are higher in early trading (4AM ET). On... READ MORE
Care out there. It is still earnings season. ARO Consolidates after Triangle Breakout. CERN Firms at Key Retracement. NBR Bounces off Triangle Support. Plus ATVI, NTAP, PTEN and VIP. 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
Oracle (ORCL) surged back above 28 this month, but stalled the last few weeks as resistance came into play. First, notice that broken support turns resistance around 28.50. Second, the stock retraced 50-61.80% of the prior decline. A pennant formed the last two weeks and traders should watch... READ MORE
BROKEN RESISTANCE LEVELS TURN FIRST SUPPORT FOR SPY... Link for todays video. It is no secret that stocks became overbought after big moves the last few weeks and months. While overbought conditions do not guarantee a correction, they certainly increase the odds for a correction. Chart 1 shows the S&... READ MORE
Even though the short-term uptrends remain in place, the major index ETFs are overbought and ripe for a correction. Corrections can evolve as pullbacks or sideways trading ranges. A pullback that retraces around 50% of the prior advance (19-Dec to 26-Jan) might be playable for a short-term trader. A sideways... READ MORE
SPOT LIGHT CRUDE FORMS INVERSE HEAD-AND-SHOULDERS ... Link for todays video. Whats it going to be for crude? Even though stocks are higher and the Dollar is lower the last few weeks, crude is down and not responding very well. Chart 1 shows Spot Light Crude ($WTIC) surging along with the... READ MORE