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STOCKS DECLINE SHARPLY WITH BEARISH BREADTH SURGE -- UTILITIES HOLD UP THE BEST -- MICRO-CAPS AND SMALL-CAPS LEAD LOWER -- NY COMPOSITE TRACES OUT HEAD-AND-SHOULDERS PATTERN -- NASDAQ BACKS OFF RESISTANCE AGAIN XLI AND SMH TEST 2011 LOWS
by John Murphy,
Chief Technical Analyst, StockCharts.com
STOCKS DECLINE SHARPLY WITH BEARISH BREADTH SURGE... Link for todays video. Negative news on the economy and the debt-ceiling debacle knocked the wind out of stocks on Wednesday. First, Durable Goods orders unexpectedly declined in June. Second, the Feds beige book showed slowing in eight of twelve regions. Third, the...
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IWM Remains Relatively Weak as QQQ Remains Strong
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Relative weakness in small-caps remains a concern for the stock market. While the Nasdaq 100 ETF
(QQQ) is holding up fine, the Russell 2000 ETF (IWM) is already in its support zone with declines over the
last two days. The first chart shows IWM gapping down on Monday. This gap...
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Small-Caps and Mid-Caps Lagging the Last 10 Days $MID $SML
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
While the Nasdaq 100 continues to move higher and the S&P 500 shows gains the last 10 days, the PerfChart below shows that small and mid caps are starting to suffer. The S&P 500 is up just over 1% snce July 13th, but the S&...
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FALLING DOLLAR BOOSTS COMMODITY ASSETS -- FREEPORT MCMORAN FOLLOWS COPPER HIGHER -- ANADARKO PETROLEUM GIVES ENERGY SECTOR A BOOST -- MICROSOFT SHOWS NEW MARKET LEADERSHIP
by John Murphy,
Chief Technical Analyst, StockCharts.com
DOLLAR BREAKS TRIANGLE SUPPORT LINE... Arthur Hill and myself have described the sideways consolidation pattern in the U.S. Dollar Index ETF (UUP) as a bearish triangle which is identified by two converging trendlines. The UUP has clearly broken the lower support line this week which suggests the start of...
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Small-caps Underperform and the Dollar Plummets
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The debt duel in Washington is weighing on stocks, bonds and the Dollar. Techs and QQQ are holding up the best, while small-caps and IWM are faring the worst. This debt duel will soon turn from rumor to news (on or before August 2nd). This news, whatever the outcome, could...
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Charts of Interest: AMGN, AMX, ARMH, DOW, EMR, KEY, SYMC
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
AMGN Hits 61.80% Retracement.
EMR Forms Wedge Correction.
KEY Challenges Resistance with Volume Surge.
Plus AMX, DOW, EMR and SYMC.
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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LTD Gaps From Resistance on High Volume
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After meeting resistance from the May high twice this month, Limited (LTD) gapped down on big volume Monday. This gap should be considered bearish until proven otherwise with a move back above the gap zone.
Click this image for a live chart...
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QQQ PROVIDES THE LONE BREAKOUT -- SPY FORMS LARGE TRIANGLE -- INDUSTRIALS AND FINANCE LAGGING THE MARKET -- US DOLLAR FUND BREAKS TRIANGLE SUPPORT -- EURO TRUST CHALLENGES WEDGE RESISTANCE
by John Murphy,
Chief Technical Analyst, StockCharts.com
QQQ PROVIDES THE LONE BREAKOUT... Link for todays video. It remains a story of two stock markets, or more. The Nasdaq 100 ($NDX) broke above its 2011 highs with a surge above 59.5 on Friday. The ETF is struggling today, but largely holding above these highs. New highs are...
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Breakouts in QQQ and SPY Get First Test as Gold Surges
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
With pre-market stock futures pointing to a sharply lower open, last week's breakouts will get their first test. To recap: the major index ETFs broke channel resistance with gaps and surges on Tuesday. These breakouts held as the gains extended into Friday. QQQ moved above its early July...
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Intel Challenges Pennant Resistance on Light Volume
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Intel (INTC) is making waves today with an attempt to break pennant resistance. Notice how the stock surged from 21 to 23.25 and then consolidated the last few weeks. A breakout would signal a continuation higher, but low volume detracts from today's move.
Click this image for...
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FINANCE SPDR BATTLES CENTERLINE OF BIG CONSOLIDATION -- BROKER-DEALER ISHARES FORMS WEEKLY BULLISH ENGULFING -- AD VOLUME LINES BOUNCE OFF 200-DAY SMAS -- NASDAQ 100 BREADTH IS LAGGING THE INDEX -- BOND ETF HITS KEY RETRACEMENT AS MOMENTUM WANES
by John Murphy,
Chief Technical Analyst, StockCharts.com
FINANCE SPDR BATTLES CENTERLINE OF BIG CONSOLIDATION... Link for todays video. The finance sector has weighed on the broader market most of the year. While the ETF shows signs of firming this week, it remains short of the breakout needed to reverse the current downtrend. Chart 1 shows the Finance...
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Price Charts Remain Strong Despite Some Internal Weakness
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Even though the major index ETFs have yet to break down or show serious weakness, chartists should stay vigilant because the market is not firing on all cylinders right now. There were three downgrades this week, but the indicator summary remains positive overall. The AD Lines remain split with the...
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Euro Breaks out as Breakouts in QQQ and SPY Extend
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Stocks extended their gains with another broad rally that lifted all sectors. Seven of the nine sectors were up more than 1%. The Finance SPDR (XLF) led the way with a 2.40% gain. On the 60-minute charts, QQQ remains the strongest as it challenges its July (and 2011) highs....
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XLU Breaks Cup-with-handle Resistance
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
With a big surge over the last three days, the Utilities SPDR (XLU) is breaking rim resistance from a cup-with-handle pattern. These bullish continuation patterns were popularized by William O'Neal, founder of Daily Graphs and IBD. Also notice that the July pullback looks like a falling flag.
Click...
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STOCKCHARTS ADDS NEW CORRELATION COEFFICIENT INDICATOR WHICH IS ESPECIALLY HELPFUL IN INTERMARKET WORK -- IT CONFIRMS POSITIVE CORRELATION BETWEEN STOCKS AND COMMODITIES AND NEGATIVE CORRELATION TO BONDS AND THE DOLLAR
by John Murphy,
Chief Technical Analyst, StockCharts.com
IT QUANTIFIES INTERMARKET RELATIONSHIPS... The Correlation Coefficient which has just been added to the Stockcharts.com indicator list measures the strength of a relationship between two markets. That relationship can be positive or negative. For example, a coefficient of +1.0 means that two markets are perfectly correlated which means...
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Gaps and Breakouts Holding for SPY and QQQ
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Trading was mixed on Wednesday with the major index ETFs finishing slightly negative. This looks like a little buy-the-rumor and sell-the-news, especially for Apple, which opened above 396 and closed below 387. The sectors were mixed with the Finance SPDR (XLF) sporting the biggest gain (+1.14%). This may be...
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Charts of Interest: AEO, DANG, IP, STJ, SVU, WFT
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
AEO Consolidates after Surge.
DANG Forms Hammer Near June Lows.
STJ Traces out High Volume Bullish Engulfing.
Plus IP, SVU, WFT
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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APPLE BREAKS OUT AS QQQ CHALLENGES 2011 HIGHS -- SEMI ETF TESTS MAJOR SUPPORT LEVEL -- AMAT AND TXN WEIGH ON SEMIS -- NETWORKING ETF SHOWS RELATIVE WEAKNESS -- S&P EQUAL WEIGHT INDEX UNDERPERFORMS -- INTERNET ETF POWERS NASDAQ
by John Murphy,
Chief Technical Analyst, StockCharts.com
APPLE BREAKS OUT AS QQQ CHALLENGES 2011 HIGHS... Link for todays video. Led by Apple (APPL), the Nasdaq 100 ETF (QQQ) is once again challenging its 2011 highs. Chart 1 shows AAPL surging through resistance with a massive surge the last four weeks. Even though the breakout is bullish, the...
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Energy SPDR Leads Sectors over the last 10 days
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
As this sector PerfChart shows, the Energy SPDR (XLE) is the standout performer over the last 10 trading days with a 2.1% gain. In contrast, the S&P 500 is down around 1% during this timeframe. Industrials and finance have weighed on the S&P 500 the...
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Tech Sector Powers Gaps and Breakouts for QQQ and SPY
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Led by the technology and consumer discretionary sectors, stocks surged on Tuesday and the major index ETFs broke channel resistance. All nine sectors were up with seven of nine up more than 1%. Tuesday's trading started strong with a gap and finished strong with a close near the...
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Tech SPDR Gaps Higher and Starts to Lead
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After firming for a few days, the Technology ETF (XLK) gapped higher on Wednesday with an open above 26. This is a big gap that is bullish as long as it holds. In the indicator window, the Price Relative turned up as XLK starts to outperform the S&P...
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QQQ Firms as Short-term Corrections Extend
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After a big surge from mid June to early July, stocks corrected with pullbacks over the last seven trading days. SPY and IWM were weighed down by weakness in money-center banks and regional banks on Monday, but DIA and QQQ held up relatively well. In fact, QQQ finished with a...
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Chart of Interest: F, JPM, MOS, MRVL, SD
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
F Forms Hammer Near Prior Low. JPM Establishes Clear Resistance Hurdle. SD Surges on Good Volume. Plus MOS and MRVL.
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...
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QQQ AND IWM BACK OFF RESISTANCE -- FINANCIALS CONTINUE TO WEIGH ON STOCKS -- HOMEBUILDERS SPDR FORMS HEAD-AND-SHOULDERS PATTERN -- SWISS FRANC AND YEN ARE STRONGEST CURRENCIES -- DOLLAR REMAINS STUCK IN CONSOLIDATION PATTERN
by John Murphy,
Chief Technical Analyst, StockCharts.com
QQQ AND IWM BACK OFF RESISTANCE... Link for todays video. With a decline over the last seven days, the Russell 2000 ETF (IWM) and the Nasdaq 100 ETF (QQQ) backed off resistance from the 2011 highs. Taking a step back to look at the big picture, these ETF charts show...
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French CAC 40 Index Breaks March Low
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
With a plunge over the last seven days, the French CAC Index ($CAC) broke below its March low and reached its lowest point of the year. Also notice that the index formed lower highs in May and early July. The breakdown reflects the current debt problems in the Euro zone....
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Upgrades Strengthen Indicator Summary
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
With several more upgrades, the indicator summary moved from +2 to +9 over the last two weeks. Nine of the ten indicator groups are positive or bullish. The AD Lines remain neutral because of a split decision. The Nasdaq AD Line is still in a downtrend, while the NYSE AD...
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SPY Corrects to Retracement Zone after Big Surge
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The decline in stocks over the last six days looks like a correction after a sharp advance. The major index ETFs moved sharply higher from mid June to early July. From the June 15th low to the July 7th high, SPY was up over 6%, while QQQ and IWM were...
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WILL RISING COMMODITIES BOOST STOCKS?
by John Murphy,
Chief Technical Analyst, StockCharts.com
The positive link between stocks and commodities doesn't always exist as shown in Chart 1. There have been periods in the past when they've trended in opposite directions like the second half of 2006 (see box). Stocks also have a history of peaking before commodities. Chart...
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MAJOR INDICATORS FLASHING "CAUTION" FOR RUSSELL 2000
by Richard Rhodes,
Founder and President, Rhodes Capital Management and Rhodes Trading Group
At times, it is best to step back and take a longer-term viewpoint of the markets; and today we'll examine the Russell 2000 Small Caps (RUT). Quite simply, RUT has having difficulty moving past its all-time highs forged in October 2007; and in the process - have caused...
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BULL MARKET HAS WEAK LEADERSHIP
by Carl Swenlin,
President and Founder, DecisionPoint.com
While this bull market has rallied +105% from the 2009 low (basis the S&P 500), I have had a sense that there was something "squishy" about it. One thing was the absence of convincing volume, something analysts have been complaining about since the bull market began....
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FUTURES SO BRIGHT, YOU GOTTA WEAR SHADES!
Hello Fellow ChartWatchers!
Today I'm pleased to announce another major upgrade to StockCharts.com. We've just added end-of-day data for US futures contracts as well as end-of-day spot prices to our system. The data is available for free to everyone. When you combine that with our...
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FRIDAY'S LEADERS WERE ENERGY, MATERIALS, AND TECHNOLOGY -- GOOGLE, APPLE, AND MICROSOFT LEAD NASDAQ BOUNCE -- MSFT SHOWS NEW LEADERSHIP -- ADD FREEPORT MCMORAN COPPER AND GOLD TO METAL LEADERS -- S&P 500 REGAINS 50-DAY AVERAGE
by John Murphy,
Chief Technical Analyst, StockCharts.com
ENERGY AND MATERIAL STOCKS HAVE STRONG WEEK... The stock market staged a modest rally on Friday. It was enough, however, to either keep some indexes (like the Nasdaq) above its 50-day average, or to push some others (S&P 500) back above it. The three strongest sectors on Friday...
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Revisiting the 2000 S&P 500 Reversal
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The 2000 market top evolved over a 12 month period as the S&P 500 traded between 1325 and 1550. The index broke this range at the end of 2000 and continued lower in early 2001. Notice that broken support turned into resistance and the throwback bounce retraced 50%...
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MACD DIVERGENCES
by Tom Bowley,
Chief Market Strategist, EarningsBeats.com
Gerald Appel created the MACD in the late 1970s. It's a momentum oscillator that serves to gauge the strength and direction of a trend, but what I find most useful is its ability to predict a reversal. If you like to short weak stocks, I can't...
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INVESTORS BUY DRUGS AND SELL CHIPS -- S&P 500 SLIPS BELOW 50-DAY AVERAGE TURNING SHORT-TERM MOMENTUM BACK DOWN
by John Murphy,
Chief Technical Analyst, StockCharts.com
PHARM HOLDERS ARE DAY'S TOP ETF ... On another day when stocks are coming under selling pressure, investors are favoring defensive stock groups like pharmaceuticals. Chart 1 shows Pharm Holders (PPH) trading up on the day (while most of the rest of the market is down). The rising PPH/...
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SILVER JOINS GOLD IN PRECIOUS METALS RALLY -- MARKET VECTORS GOLD MINING INDEX (GDX) CLEARS RESISTANCE -- SILVER STOCKS LIKE SILVER WHEATON JUMP WITH METAL -- GOLD MINERS BPI TURNS POSITIVE
by John Murphy,
Chief Technical Analyst, StockCharts.com
GOLD MINERS BPI TURNS UP ... Last Wednesday's message wrote about a potential upturn in precious metals and stocks tied to them, and showed the Gold Miners Bullish Perent Index ($BPGDM) in oversold territory (below 30%) and on the verge of turning higher. [The BPGDM measures the percent of...
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Revisiting the 2007 S&P 500 Reversal
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Although no two market tops are the same, we can get an idea of what a major reversal looks like by examining past reversals. The 2007 top evolved over a 9 month period. There were clear support breaks at 1425 and 1375. RSI broke its bull zone (40 to 80)...
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AKAM Hits Fibonacci Cluster Zone
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The Fibonacci Retracements Tool can be used to identify Fibonacci levels to estimate support, resistance or turning points. When there is more than one advance, chartists can apply this tool to both moves and look for a cluster zone. The chart for Akamai shows the Fibonacci Retracements Tool extending from...
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Finance Sector is the Big Drag
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The advance since the March lows has been enough to power the Consumer Discretionary SPDR (XLY) past its 2007 high. The Industrials SPDR (XLI) and the Technology ETF (XLK) both met resistance at their 2007 highs over the last few months. The Finance SPDR (XLF) remains the big laggard as...
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COMMODITIES MAKE IMPRESSIVE COMEBACK FROM YESTERDAY'S SELLING -- GOLD CLEARS OVERHEAD RESISTANCE -- GOLD SHARES BOUNCE AS WELL LED BY GOLDCORP, YAMANA, AND KINROSS GOLD
by John Murphy,
Chief Technical Analyst, StockCharts.com
ALL COMMODITY GROUPS REBOUND... While global stocks are trying to stabilize after yesterday's selloff, commodity markets are making a decent comeback. Chart 1 shows the DB Commodities Tracking Index Fund (DBC) bouncing off its (blue) 50-day moving average. Chart 2 shows the DB Energy ETF (DBE) doing the...
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