After recording a fresh 52-week high four weeks ago, SPY declined in May and formed a falling flag or wedge. First, 52-week highs occur in uptrends, not downtrends. Second, SPY remains above the mid April reaction low and has yet to forge a lower low. Downtrends require lower lows. Third,... READ MORE
F5 Networks (FFIV) first broke below its 50-day SMA in January and then its 200-day moving average in March. The stock recovered with a break back above the 50-day in May, but has yet to reclaim the 200-day. The next moving average to break could hold the key to the... READ MORE
OVERSOLD COMMODITIES START TO BOUNCE... After suffering a sharp downside correction during May, commodities are starting to stabilize. A combination of chart support and a short-term oversold condition also suggest that the worst may be over for commodity assets. Chart 1, for example, shows the DB Commodities Tracking Index (DBC)... READ MORE
With big gaps and sharp declines, the major index ETFs became oversold within short-term downtrends. This is a tricky situation because the medium-term trends (daily charts) remain up. The May decline, while sharp, is still viewed as a correction within a bigger uptrend. Picking the bottom for this correction is,... READ MORE
AKAM Forms Island Reversal. MON Bucks the Market with a Breakout. QCOM Consolidates above Breakout. Plus FLEX,PHM,SLB,TEVA,$TNX,USL,WNR. *********************************************** This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or... READ MORE
US STOCKS FOLLOW EUROPEAN STOCKS LOWER... Link for todays video. Weakness in Europe spread to the US as stocks opened sharply lower on Monday and remained under selling pressure. Chart 1 shows the Dow Industrials down around 100 points. Despite the May decline, the overall trend remains up as the... READ MORE
The PerfChart shows the year-to-date performance for six European stock indices. Surprisingly, the Italian Milan Index ($MIB) is the best performing. Germany is a close second though. It is also surprising to see the Netherlands Index ($AEX) down for the year and showing relative weakness. Click this image for a... READ MORE
The Nasdaq 100 ETF (QQQ) broke support with a sharp decline and broken support turned into resistance over the last few days. After hitting resistance last Thursday, the ETF turned lower on Friday. Even though Friday's decline was modest, a clear reaction high formed with resistance in the... READ MORE
Hello Fellow ChartWatchers! This week's newsletter features some great Bullish vs. Bearish discussions including some Elliot wave analysis from John Murphy. I also wanted to take time to remind everyone that our Spring Special will end shortly. I really hate when people write in to us after a... READ MORE
Issues are mounting and the pressure is definitely weighing on the bulls. While we haven't seen any major breakdowns to confirm several bearish signs, you should be approaching the market with caution in my opinion. In my last article, I discussed one of the warning signs - the... READ MORE
Determining Elliott Wave counts can be very subjective. One way to make it little easier is to employ a "ZigZag"overlay on the price chart. [The ZigZag is located in the same Overlays menu that includes moving averages]. The idea of the ZigZag overlay is to apply a... READ MORE
Since the end of April, the broader market as defined by the NYSE Composite Index has been in a corrective mode. However, the question remains as to whether this corrective process will continue in the weeks and months ahead, or will it come to a halt with the materialization of... READ MORE
A reader recently called me a perma-bull, which is amusing, since by nature I'm usually disposed toward bearishness. I will, however, remain bullish until our mechanical timing model switches from a buy. The model will be bullish until the 20-EMA for the S&P 500 crosses down... READ MORE
After getting slammed with a 10+ percent decline in May, the Gold Miners ETF (GDX) hit support and bounced over the last few days. As the chart below shows, this is no ordinary support level for GDX. Support in the 53 area stems from broken resistance and at least two... READ MORE
The consumer discretionary sector is seeing serious red over the last two days. The S&P Sector Carpet shows 2-day price performance for various stocks in the nine sectors. Four of the five weakest stocks come from this most economically sensitive sector. Namely, retailers were weak the last two... READ MORE
FALLING FLAGS REMAIN FOR DIA AND SPY... Link for todays video. Stocks got off to a weak start on Friday with the Dow Industrials SPDR (DIA) and S&P 500 ETF (SPY) moving lower in early trading. With these declines, lower highs are taking shape again this week to... READ MORE
The indicator summary remains firmly positive, but downgrades in momentum and continued weakness in Nasdaq breadth are a concern. Even though SPY hit a 52-week high in April, RSI did not exceed 70 and failed to confirm strength. Also notice that 20-day Aroon for SPY dipped below -50 this week.... READ MORE
QQQ is at its make-or-break point for this oversold bounce. The ETF moved back into the broken support zone, which turns into resistance. There is also resistance in the 58.25 area from the 62% retracement cluster. The pink trendline marks the rate of ascent over the last two days.... READ MORE
With a strong open and decline into the close, Dollar General (DG) is set form a bearish engulfing pattern with a long upper shadow. This is the third such pattern in the last two months. Watch the trendline extending up from the March low for a break to confirm this... READ MORE
Looking the daily chart for SPY, I am struck by the fact that 14-day RSI did not reach overbought levels in late April or early May. The surge from the mid March low to the early May high was quite strong. SPY advanced over 8% in 6-7 weeks. Despite such... READ MORE
Charts of Interest: AMAT Tests Key Support Level. ETR Forms Flag After Gap. GOOG Forms Large Bullish Engulfing. Plus PMCS, TKC and UBS. *********************************************** 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... READ MORE
RUSSELL 2000 ETF BOUNCES OFF SUPPORT... Link for todays video. After a sharp decline the prior five days, stocks got an oversold bounce with small-caps leading the way. Chart 1 shows the Russell 2000 ETF (IWM) getting a bounce off support from the early April low. Support in this area... READ MORE
With a 6.5% decline from its April high, the Shanghai Composite ($SSEC) has been one of the weaker world indices this spring. Despite relative weakness, the index is trying to firm in a support zone that centers around the 62% retracement. Last week's high marks the first... READ MORE
The Gold SPDR (GLD) is at support and looks ripe for an oversold bounce. The mid April trendline, broken resistance and the early May spike low mark support in the 144 area. A falling channel defines the short-term downtrend. Look for a surge off support for the first bullish sign.... READ MORE
American Science and Engineering ($ASEI) broke support at the beginning of May, but the bulls are not giving up easily as the stock formed at least four really long white candlesticks since then. A long white or hollow candlestick indicates that the close is above the open. These candlesticks reflect... READ MORE
THE MARKET'S HAD A FIVE WAVE ADVANCE... Determining Elliott Wave counts can be very subjective. One way to make it little easier is to employ a "ZigZag"overlay on the price chart. [The ZigZag is located in the same Overlays menu that includes moving averages]. The... READ MORE
Most of the action on Monday took place outside of the S&P 500 ETF (SPY). In particular, the Nasdaq 100 ETF (QQQ) broke support with a sharp decline led by large-cap tech stocks. Apple (AAPL) and Google were down over 2% and Amazon (AMZN) was down almost 5%... READ MORE
FAST Forms Tight Triangle. HD Nears Support Zone. STT Stalls at Key Retracement. Plus ANF, MAS, SBUX 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... READ MORE
The Steel ETF (SLX) traced out a double top with two relatively equal highs this year. The intermittent low formed in March to mark key support for this pattern. SLX closed right at this low on Friday for an important test. A break below this level would confirm the double... READ MORE
FINANCE SECTOR ON VERGE OF P&F TRIPLE BOTTOM BREAKDOWN... Link for todays video. I am on the road so Monday's Market Message is coming a bit early. John Murphy featured the Finance SPDR (XLF) as it tested its 2011 lows on Friday and showed relative weakness.... READ MORE
Today we will just go straight to the 60-minute charts to review the current consolidations in the Nasdaq 100 ETF (QQQ), Russell 2000 ETF (IWM) and S&P 500 ETF (SPY). Stocks became overbought after surging from mid April to early May. These overbought conditions were worked off with... READ MORE
Of the five broad market indices, the Amex is the weakest due to declines in energy related shares this month. The Amex is heavily weighted towards the energy sector. The NY Composite ($NYA) is the second weakest index. $NYA is heavily weighted towards the finance sector, which has also been... READ MORE
EURO BREAKS 50-DAY LINE... Last week's sharp drop in the Euro (and rebound in the dollar) contributed to heavy selling in commodity assets and increased the odds for a stock correction. Unfortunately, the short-term picture has weakened more with the Euro falling below its 50-day average for the... READ MORE
Some signs of weakness are creeping into the market, but the bulk of the evidence remains bullish at this point. The major index ETFs recorded 52-week highs in April, the NYSE AD Line hit a 52-week high this week and the Nasdaq AD Volume Line is challenging its February high.... READ MORE
There is no change on the daily chart, which remains in an uptrend overall. SPY broke a resistance zone and this zone turned into a short-term support zone. So far, the support zone is holding as the ETF bounced off the 133-134 area twice in the last two weeks. Clearly,... READ MORE
Even though Lockheed Martin (LMT) edged higher the last few weeks, both Aroon Up (green) and Aroon (down) moved lower. Also notice that they are parallel and relatively close together. This affirms the consolidation in LMT. The first indicator to move above 50 will trigger the next signal. You can... READ MORE
COMMODITIES CONTINUE TO WEAKEN... Commodities are coming under renewed selling pressure after the oversold bounce of the last two days. The following charts also show that this week's rebound came on much lighter volume that last week's heavy selling. That's a strong indication that... READ MORE
Stocks are moving in sync with the Euro and commodities, both of which have been falling this month. The Euro is under pressure with concerns over Greek debt. Oil is under pressure because the Dollar is rising and stocks have weakened this month. US Treasuries are attracting money as a... READ MORE
AN Breaks Wedge Support. JPM Breaks Pennant Support. RTN Consolidates after Support Break. Plus CVX, GE,LEN, LMT, TIF See ChartSchool article on Aroon for more details. *********************************************** 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... READ MORE
The London FTSE 100 ($FTSE) found support near its January-February lows over the last few weeks. With a deeper dip in March, an inverse head-and-shoulders pattern is taking shape in 2011. A break above 6100 (neckline) would signal a continuation higher. Click this image for a live chart... READ MORE