With a big recovery on Tuesday, a number of stocks formed hammers on the price charts. Express Scripts (EXRX) formed a hammer, but has yet to follow through and fill Monday's gap. In other words, the stock is still down for the week. Follow through above the gap... READ MORE
In the FOMC policy statement, Bernanke signaled that the Fed is prepared to leave interest rates near zero until at least mid 2013. Say what? Bernanke must have one heck of a crystal ball to forecast interest rates so far in advance. The prospect of low rates just reinforces the... READ MORE
Stocks opened weak, remained weak and closed weak. The short-term and medium-term trends are clearly down at this point, but the current trends are way oversold after the sharp decline of the last two weeks. Going long at this point is a bottom picking exercise akin to catching a falling... READ MORE
S&P OVERSHOOTS DOWNSIDE TARGET... Last Thursday's message offered a downside target in the S&P 500 to 1150. That level was based on a measurement from the "head and shoulders" top that was completed last week. The 1150 was also a 62% retracement... READ MORE
SECTOR CARPET SHOWS ONE GAINER IN 11 DAYS... Link for todays video. Investors hit the panic button as stocks moved sharply lower on Monday. Today might be considered a black Monday, even though stocks finished deeply in the red. There are at least two other black Mondays of note. First,... READ MORE
Needless to say, there has been a clear shift in investor sentiment over the last few weeks. In short, money is re-pricing risk. Stocks and commodities, which are viewed as riskier assets, declined over the last two weeks. Bonds and gold, which are viewed as safe-havens, advanced as alternatives. The... READ MORE
As of this writing, the markets are in panic after Standard and Poor's downgraded US debt late Friday. Stocks, bonds and oil are down sharply overnight. Dow futures were down around 274 points at 2AM ET. The Dollar is also down, but the losses are relatively modest. Gold... READ MORE
With global stocks and commodities in a rout, most U.S. bonds are surging again. Chart 1 shows the T-Bond 20+Year iShares (TLT) continuing its recent surge (as bond yields tumble to the lowest level in a year). The only exception is high yield corporates. Chart 2 shows the... READ MORE
Last week, and so far this week the stock market has traded rather dismal to be sure, with the S&P 500 trading lower in 8 of the past 9 trading sessions. However, regardless of this weakness, we've begun to see slow, but sure movements beneath the... READ MORE
If you recall, stocks were mired in an ugly bear market from 2000 through 2002. At the end of that bear market, however, the S&P 500 staged a huge advance, running specifically from 789 in March of 2003 to 1163 by March 2004. After that big climb, there... READ MORE
READER COMMENT: I have written to you before regarding your comments on volume ("where is the volume?") which imply that volume "confirms" a move. To me, like many others, volume no longer means anything, or at least not what it used to mean. See the recent... READ MORE
Hello Fellow ChartWatchers! ChartStyles are basically "templates" of charts. They contain everything about the chart except the ticker symbol. Members of our Basic and Extra services can save multiple ChartStyles into their accounts for quick access later. Consider the following example: Let's say that you have... READ MORE
Based on the writings of Charles Dow, Dow Theory utilizes the Dow Industrials and Dow Transports to generate buy and sell signals for the broader market. The market trend is up when both forge higher highs. The market trend is down when both forge lower lows. A non-confirmation is present... READ MORE
Even though it is just midday, some stocks are showing signs of firmness. Amgen (AMGN) is firming with a Harami taking shape. After a sharp decline on Thursday, the stock opened up and is trading within Thursday's range. A break above Thursday's high would confirm the... READ MORE
BROKEN SUPPORTS TURN FIRST RESISTANCE... Link for todays video. Fridays employment report provided a little good news on the labor market, but stocks still struggled with sharp losses in early trading on Friday. The major index ETFs are quite oversold, but showing no signs of support or firmness that could... READ MORE
Unsurprisingly, there were several downgrades this week as sharp declines did lots of technical damage. Last week I noted that many indicators were on the verge of turning bearish. Some turned bearish after the close on Friday and the rest followed on Tuesday. The AD Volume Lines both broke below... READ MORE
With another big move in stocks and bonds, the underlying trends have accelerated even further to become more extended. The only thing we can do at this point is respect the trend. The downtrend is too strong to justify longs and too oversold to justify new shorts. The ability to... READ MORE
JUNK BONDS TUMBLE WITH STOCKS ... With global stocks and commodities in a rout, most U.S. bonds are surging again. Chart 1 shows the T-Bond 20+Year iShares (TLT) continuing its recent surge (as bond yields tumble to the lowest level in a year). The only exception is high yield... READ MORE
EUROPEAN STOCKS HIT NEW LOWS... More selling in European stocks this morning casts doubt on the staying power of yesterday afternoon's rebound in U.S. stocks. Chart 1, for example, shows the German DAX Composite Index trading lower again today and bearing down on its March low. French... READ MORE
After becoming oversold on Tuesday, the major index ETFs formed high-volume hammers on Wednesday. Today's report will feature daily charts to get some perspective. SPY dipped below 124 and below its March low, but recovered to close above 126. Volume was the highest since the March low. The... READ MORE
EBAY Firms in Gap Zone. LSI Breaks Pennant Resistance. ORCL Tests Support with Inverted Hammer. Plus SIR, T and VZ. 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
10-day RSI for SPY moved below 30 for the fourth time in 2011. I lowered the look-back period from 14 to 10 to increase sensitivity. RSI became oversold in March, June and now August. Oversold does not guarantee a bounce, but it does increase the odds of at least a... READ MORE
2000 TOP EVOLVED OVER 9-MONTH PERIOD ... Link for todays video. While no two tops are the same, we can learn from prior market tops by dissecting the price action and pinpointing the reversal points. With this in mind, I am going to dissect the 2000 and 2007 tops, both of... READ MORE
Stocks are now very oversold with some long-term support levels coming into play. Over the last seven trading days, IWM is down 8.69%, SPY is down 6.75% and QQQ is down 5.59%. 10-day RSI moved below 30 for SPY and IWM, but remains above 30 for QQQ.... READ MORE
The Sector Market Carpet provides a color-coded display of the last seven trading days for the S&P 500 sectors. It is mostlly red as all sectors are down. Stocks holding up the best are shown with green or white-ish squares. Three of the five gainers come from the... READ MORE
SAVE HAVENS SOAR... With global stocks under heavy selling pressure, money poured into safe haven markets. The three biggest winners on the day were precious metals (Chart 1), U.S. Treasuries (Chart 2), and the Swiss Franc (Chart 3). Unfortunately, most of the money moving into those three markets came... READ MORE
EUROPE'S TWO BIGGEST MARKETS BREAK DOWN... Two weeks ago (July 11) I showed that two of Europe's largest markets (Germany and France) were succumbing to selling in weaker countries like Italy and Spain. With France being the weaker of the two, I warned that a drop... READ MORE
Trading turned quite volatile on Monday as stocks opened sharply higher, moved sharply lower and then recovered somewhat. Despite all this pushing and shoving, the major index ETFs closed slightly lower and all sector SPDRs were down for the day. Stocks did not follow through on the strong open and... READ MORE
ADM Forms Inverted Hammer within Steep Flag. DOW Bucks the Trend with Small Gain. FITB Forms Bull Flag. Plus ALK, AMX, BK.... READ MORE
With a decline the last five months, the Agriculture ETF (DBA) formed a falling wedge that extends back to March. The May-July highs mark key resistance just above 33.25. After a surge in late June and early July, a smaller falling wedge took shape the last three weeks. Look... READ MORE
DOW INDUSTRIALS SPDR TESTS TWO MAJOR TRENDLINES... Link for todays video. The debt-ceiling debacle turned into a deal over the weekend, but stocks continued to focus on the economy Monday as did bonds. In keeping with last weeks wave of bad economic news, the ISM Manufacturing Index dropped to its... READ MORE
Unsurprisingly, Congress and the White House struck an 11th hour deal on the debt ceiling. Stock futures are trading higher with the Dow poised to open some 100 points up. Oil is also higher, but bonds, gold and the Dollar are lower (±5AM ET). Technically, stocks were oversold after a... READ MORE
RUSSELL 2000 ETF HEADS TOWARDS KEY SUPPORT TESTS... Link for todays video. When it rains it pours. While most of this weeks media focus has been on the debt-ceiling debacle, Wall Street appears more focused on recent economic reports that show slowing growth. On Wednesday, it was reported that Durable... READ MORE
With another bout of selling pressure this week, the Nasdaq McClellan Summation Index reversed at the zero line and moved back below -100. Notice that this breadth indicator has been largely negative since mid March. You can read more on the McClellan Oscillator and Summation index in our ChartSchool. Click... READ MORE
With a slew of downgrades this week, the Indicator Summary now stands at zero, which is a neutral reading. There are several neutral scores this week because many indicator groups are split or on the verge of turning bearish. For example, the Trend and Structure for the Price Charts is... READ MORE
Stocks remained under pressure as early strength gave way to afternoon weakness. QQQ finished with a small gain, but the other major index ETFs finished with small losses. With little real movement on Thursday, nothing has changed on the 60-minute chart. IWM was the first to break support and turn... READ MORE
General Dynamics (GD) broke below its June low with a sharp decline the last two days. Also notice that the Price Relative (GD:SPY Ratio) broke support. GD is showing both absolute and relative weakness. Click this image for a live chart... READ MORE
Stocks moved sharply lower with a broad sell off that rocked all boats. All nine sectors were down. Small-caps and mid-caps led the way lower with declines in excess of 2%. Breadth plunged with the NYSE Net Advances Ratio reaching -.81 and the Nasdaq Net Advancing Volume Ratio hitting... READ MORE
ANF Fails at Resistance with Long Black Candle. DIS Hits Resistance at Broken Support. PLCE Retraces 50% with Rising Wedge. Plus AVP, BBBY and WMT. 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
Expedia has been on a tear the last few months with 50+ percent advance since February. The stock has yet to correct, but a bearish engulfing pattern hints at a possible short-term reversal. More candlestick patterns can be found on the pre-defined scans page. Click this image for a live... READ MORE