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SPY GAPS LOWER TO FORGE ISLAND REVERSAL -- TREASURIES BOUNCE AS STOCKS WEAKEN -- AGGREGATE AND CORPORATE BOND ETFS FOLLOW TREASURIES -- AEROSPACE-DEFENSE ETF BREAKS DOWN AFTER BEARISH DIVERGENCE -- GENERAL DYNAMICS, LOCKHEED AND RAYTHEON PLUNGE
by John Murphy,
Chief Technical Analyst, StockCharts.com
SPY GAPS LOWER TO FORGE ISLAND REVERSAL... Link for todays video. With a pair of opposing and overlapping gaps, the S&P 500 ETF (SPY) formed an island reversal over the last few weeks. First, chart 1 shows the ETF gapping above 132 with a surge on March 30th....
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SPY Gaps Below Gap for an Island Reversal
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
On the daily chart, SPY gapped above 132 on March 30th and gapped below this level on April 12th. Technically, an island reversal formed because the gaps match around 132. Combined with last week's bearish engulfing and resistance from the February high, this little breakdown could argue for...
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Semiconductor HOLDRS Fails at Key Retracement
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The Semiconductor HOLDRS surged at the beginning of last week, but hit resistance from the same retracement and plunged this week. The 62% retracement marked resistance in late March and again in early April. Today's gap down and trendline break are negative with a big support test at...
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GLOBAL STOCKS AND COMMODITIES SELL OFF -- BIGGEST LOSERS ARE ENERGY, MATERIALS AND UTILITIES -- LAGGING FINANCIALS AND TECHNOLOGY ROLL OVER -- MONEY MOVES TO STAPLES AND BIG PHARMA -- S&P 500 MAY BE ENTERING CONSOLIDATION PHASE
by John Murphy,
Chief Technical Analyst, StockCharts.com
DEFENSIVE ROTATION ... Last week's messages expounded on a number of intermarket themes, which included the "new normal" relationships among the four main asset classes (bonds, stocks, commodities, and currencies). We're seeing more of that today but in the opposite direction. Stocks and commodities are...
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SPY Tests Gap Support Zone
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
There is not much change on the daily or 60-minute charts. The S&P 500 ETF (SPY) continues to battle resistance from the February high. Since moving above 132 on April 1st, the ETF stalled with five indecisive candlesticks and then two black candlesticks on Friday-Monday. Notice that a...
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Charts:AAPL,AMCC,AMGN,ATML, BRCM,EBAY,MS,SNE,USG
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
AAPL Hits Support Zone. AMGN Continues to Work Higher.
BRCM Near Support and Key Retracement.
Plus AMCC, ATML, EBAY, MS, SNE and USG
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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...
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Scan for 3 Black Crows Turns up MDY
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Three Black Crows is a bearish candlestick reversal pattern with three black filled candlesticks. A candlestick is filled when the close is below the open. Despite this bearish pattern, volume remains relatively low and support from broken resistance is at hand. Click here to see our scan page with candlestick...
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SMALL-CAPS LEAD CORRECTION -- QQQ BEGINS A FLAT OR TRIANGLE 4TH WAVE -- QQQ AND XLK FORM FLAG PATTERNS -- NETWORKING ETF REMAINS WEAK -- SEMICONDUCTOR HOLDRS HITS RESISTANCE -- LUMBER BREAKS DOWN AS ITB STALLS AT RESISTANCE
by John Murphy,
Chief Technical Analyst, StockCharts.com
SMALL-CAPS LEAD CORRECTIVE PHASE... Link for todays video. There are two ways to work off an overbought condition: pullback or consolidate. Actually, there is a third that is somewhere in between a pullback and a consolidation. Many indices and ETFs became overbought after the surge from mid March to early...
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Indecision Evolves into Some Selling Pressure for SPY
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
On the daily chart, the S&P 500 ETF (SPY) continues to battle resistance from the February high. Since moving above 132 on April 1st, the ETF stalled with five indecisive candlesticks and then a long black candlestick on Friday. Notice that a spinning top preceded Friday's...
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Intermarket PerfChart Shows Commodities Surging as Dollar Plunges
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Some key intermarket relationships remain alive and well in 2011. First, commodities have been moving higher as the Dollar weakens. Second, bonds have been moving lower as commodities advance. Rising commodity prices increase inflationary pressures and this in turn puts pressure on bonds.
Click this image for a live chart...
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WEST TEXAS INTERMEDIATE SURGES ABOVE 111 -- AIRLINES HURT BY RISING OIL PRICES -- DYNAMIC YIELD CURVE WAS FLAT IN OCTOBER 2007 -- STEEP YIELD CURVE BENEFITS BANKS AND ECONOMY -- 2-10 TREASURY SPREAD REMAINS WIDE
by John Murphy,
Chief Technical Analyst, StockCharts.com
WEST TEXAS INTERMEDIATE SURGES ABOVE 111... Link for todays video. Weakness in the Dollar and strength in the stock market continue to support higher oil prices. John Murphy has spoken at length about the inverse relationship between commodities and the Dollar. This means one goes up when the other goes...
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Indicator Remains Positive as Bulls Control Trends
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
While there are some discrepancies out there with various indicators, the weight of the evidence clearly favors the bulls. The NYSE AD Line hit a new high this week. Net New Highs expanded on both the NYSE and the Nasdaq. Small-caps are outperforming large-caps. Three of the five major index...
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Weakness in Bonds Keeps a Bid in Stocks
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Bonds are breaking down and this is bullish for stocks. Stocks and bonds have been inversely correlated for some time now. Even though US interest rates are rising, the Dollar is falling and this is putting a bid into commodities. Strength in stocks is also helping commodities. These two have...
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Netflix Forms Outside Reversal at Resistance
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Bearish candlestick patterns marked the prior two reaction highs in Netflix and the stock formed an outside reversal on Wednesday. Strictly speaking, this is not bearish engulfing because Tuesday's candlestick is actually black. A bearish engulfing requires a white candlestick to be engulfed by a black candlestick. Therefore,...
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EUROPEAN CURRENCIES CHALLENGE 2010 HIGHS ON RATE HIKES -- COMMODITY CURRENCIES REMAIN STRONG -- EVEN EMERGING MARKET CURRENCIES ARE RISING -- BUT GOLD IS RISING EVEN FASTER -- GOLD'S DUAL ROLE AS AN ALTERNATE CURRENCY ADD TO ITS APPEAL
by John Murphy,
Chief Technical Analyst, StockCharts.com
EUROPEAN CURRENCIES RISE ON HIGHER RATES... As expected, the European central bank raised interest rates by a quarter point today for the first time in two years. Expectations for that hike (and maybe more to come) have helped boost the Euro against the U.S. Dollar over the past few...
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SPY Stalls At Resistance as Bullish Sentiment Surges
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
SPY is short-term overbought and at potential resistance from the February highs, but the overall trend remains up. In last night's Market Message, I pointed out that 15-day Chaikin Money Flow was negative despite a 7% surge the last 15 days. This is extraordinary. Yesterday I also read...
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Charts: AFFX,AKAM,AVP, GCI,PHM,RF,SVU,SYK,X
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
AFFX Breaks Resistance with Surge. GCI Forms Bear Flag. RF Challenges Resistance. Plus AKAM, AVP, PHM, $SVU, SYK and X
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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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Microsoft Springs to Life with a Gap
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After a dismal February and early March, Microsoft is making up for some lost ground with a surge over the last three weeks. The stock gapped up on Tuesday with above average volume and followed through above its late March high with a good gain on Wednesday.
Click this image...
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CHAIKIN MONEY FLOW REMAINS NEGATIVE TO SPY -- FINANCE SECTOR AND REGIONAL BANKS PROVIDE A SPARK -- CITIGROUP, GOLDMAN AND WELLS FARGO LIFT XLF -- INDUSTRIAL COMMODITIES CONTINUE TO SHOW STRENGTH -- BOND ETF BREAKS FLAG SUPPORT
by John Murphy,
Chief Technical Analyst, StockCharts.com
CHAIKIN MONEY FLOW REMAINS NEGATIVE TO SPY... Link for todays video. The S&P 500 ETF (SPY) remains in an uptrend overall and is currently challenging the February highs. Chart 1 shows the ETF gapping above 132 and forming six indecisive candlesticks the last six days. Indecisive candlesticks have...
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Stocks, Bonds and the Dollar Refuse to Budge
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
There is not much change in the overall picture. Bond yields are in uptrends, Treasuries are in downtrends, the Dollar is weak, Gold is strong, Oil remains strong and Stocks are Strong. Even though some of these trends flatted over the last few days, they remain largely intact. The 10-year...
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Retail Apparel Group Leads Market Higher
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The Retail SPDR (XRT) surged to another 52-week high today with strength coming from the retail apparel group. Candleglance chart groups for over 50 industries can be found at the top of the third column on the FreeCharts page. This snapshot from the Retail-Apparel group shows Abercrombie & Fitch (ANF)...
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PRECIOUS METALS SOAR ON WEAK DOLLAR -- GOLD HITS NEW RECORD AND FOLLOWS SILVER HIGHER -- PRECIOUS METAL STOCKS FOLLOW THE METALS UP -- NEW STOCK BREAKOUTS INCLUDE GOLDCORP AND SILVER STANDARD RESOURCES
by John Murphy,
Chief Technical Analyst, StockCharts.com
GOLD HITS NEW RECORD ... Gold prices are surging to new record high today which is erasing the short-term setback of a couple of weeks ago. Chart 1 shows the Gold Trust Shares (GLD) breaking decisively through its late 2010 highs on rising volume. And, as usual, silver is leading it...
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A REVIEW OF THE NEW NORMAL IN INTERMARKET RELATIONSHIPS -- BONDS AND STOCKS TREND INVERSELY -- STOCKS AND COMMODITIES TREND TOGETHER -- THE MAIN REASON FOR THE CHANGES IS THE DEFLATIONARY ENVIRONMENT OVER THE LAST DECADE
by John Murphy,
Chief Technical Analyst, StockCharts.com
INTERMARKET REVIEW... Over the weekend, Chip Anderson reviewed the Intermarket Picture based on the "normal" relationships that have worked for decades in the financial markets. Some of them, however, have changed in recent years (as we've pointed out in our market messages). Those intermarket changes, and...
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Charts: AKS,EBAY,GOOG, GTIV,NVLS,TTWO,WGO,WMT
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
AKS forms Rising Wedge. GOOG Returns to Broken Support. WMT Consolidates after Surge. Plus EBAY,GTIV,NVLS,TTWO and WGO.
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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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SPY Stalls at Resistance with Two Small Candles
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Clint Eastwood called this morning with a familiar question. Imagine the current uptrends speaking as Harry Calahan. Well, bear, do you feel lucky? Go ahead, bear, make my day. There is certainly a temptation to turn short-term bearish as SPY trades near resistance with overbought conditions. It is a risky...
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A Momentum and Price Breakout for Quadra Mining
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After a rough start at the beginning of the year, Quadra Mining (QUX.TO) may be finding its feet with a high volume breakout. The stock surged to a 4-week high on the highest volume in four weeks. The indicator window shows RSI also breaking out to its highest level...
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SEMICONDUCTOR HOLDRS BREAK CHANNEL SUPPORT -- INTEL AND AMD LEAD SEMIS LOWER -- NETWORKING STOCKS WEIGHT ON TECHS AGAIN -- QUALCOMM AND JUNIPER LEAD NETWORKERS LOWER -- CORN, SOYBEANS AND WHEAT BOUNCE ALONG WITH STOCK MARKET
by John Murphy,
Chief Technical Analyst, StockCharts.com
SEMICONDUCTOR HOLDRS BREAK CHANNEL SUPPORT... Link for todays video. The Semiconductor HOLDRS (SMH) continues to show relative weakness with a short-term support break over the last two days. Chart 1 shows SMH forming a rising channel as it retraced 62% of the prior decline. The ETF hit resistance at this...
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Bonds, Dollar, Oil and Stocks Remain in Definitive Trends
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
There are some well-defined short-term trends working over the last three weeks or so. Interest rates are moving up as bonds move lower. Oil is moving higher and the Dollar is moving lower. Stocks are trending up with small-caps leading the way. While we cannot always assume that correlation is...
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INTERMARKET PICTURE POINTS TO CHANGE IN MARKET DIRECTIONS
John Murphy has written extensively about Intermarket Analysis - the study of the key relationships between the four major financial markets and how those markets affect each other in the long run. To study Intermarket relationships we use our Intermarket PerfChart that displays the percent performance of the major index...
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BANK INDEX - THE "CANARY IN THE COAL MINE"?
by Richard Rhodes,
Founder and President, Rhodes Capital Management and Rhodes Trading Group
Questions about regarding the quick/sharp rally off the March 16th low. They are numerous, and they consist of a number of troubling circumstances that call into question the veracity of the rally. One of the areas that is troublesome is the Banking Index ($BKX), for any rally worth its...
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LONG-TERM TECHNICALS AND RISING PESSIMISM TRUMPS SHORT-TERM BREAKDOWN
by Tom Bowley,
Chief Market Strategist, EarningsBeats.com
Let's face it. Two weeks ago, the market looked cooked. There didn't appear to be a single drop of gas left in the bulls' tank. We saw impulsive selling. The volume surged on the selling. Daily charts had already printed long-term negative divergences across our...
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DOW TRANSPORTS SURGE TO NEW TO NEW 52-WEEK HIGH
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Despite relative weakness in airlines and $108 oil, the Dow Transports surged to a fresh 52-week high on Friday. The chart below shows the Average finding support around 4900 from late February to mid March and then surging around 10% the last 2-3 weeks. Admittedly, there is an outside chance...
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BOND YIELDS JUMP
by John Murphy,
Chief Technical Analyst, StockCharts.com
This morning's March jobs numbers reported U.S. payrolls jumping by 218,000 which was higher than estimates. In addition, the unemployment rate declined to a two-year low of 8.8%. The result is a jump in stock futures which points to a higher open today. Bond yields...
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GLOBAL MARKETS ENHANCE PERSPECTIVE
by Carl Swenlin,
President and Founder, DecisionPoint.com
(This is an excerpt from Friday's blog for Decision Point subscribers.)
If nature abhors a vacuum, technicians abhor "V" bottoms. Once prices bounced out of the March lows, the technical expectation was that, after a week or two of rally, prices would turn down again and...
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Stocks Surge, but Intel Breaks Flag Support
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Despite a rather broad market rally early Friday, Intel ($INTC) was under pressure with a sharp decline that broke flag support. The mid March gap proved too tough and this flag break signals a continuation lower.
Click this image for a live chart...
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DOW INDUSTRIALS AND TRANSPORTS EXCEED FEBRUARY HIGHS -- FINANCE SECTOR PERKS UP WITH A BREAKOUT -- GOLDMAN, STATE STREET AND HUNTINGTON CATCH A BID -- SHORT-TERM RATES HOLD SUPPORT AND MOVE HIGHER -- DOLLAR BOUNCES ALONG WITH INTEREST RATES
by John Murphy,
Chief Technical Analyst, StockCharts.com
DOW INDUSTRIALS AND TRANSPORTS EXCEED FEBRUARY HIGHS... Link for todays video. With the surge over the last two weeks, the Dow Industrials moved back above its February high to record a new 52-week high on Friday. Chart 1 shows the mid March reversal around 11600 establishing a key reaction low...
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STRONG MARCH JOBS REPORT BOOSTS STOCK FUTURES -- SMALL AND MIDCAP STOCKS HAVE ALREADY BROKEN OUT -- LARGE CAPS SHOULD BE NEXT -- EMERGING MARKET BREAKOUTS ARE A PLUS FOR GLOBAL STOCKS
by John Murphy,
Chief Technical Analyst, StockCharts.com
BOND YIELDS JUMP ... This morning's March jobs numbers reported U.S. payrolls jumping by 218,000 which was higher than estimates. In addition, the unemployment rate declined to a two-year low of 8.8%. The result is a jump in stock futures which points to a higher open...
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Indicator Summary Strengthens as NYSE AD Line Hits New High
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After a whipsaw in mid March, the indicator summary is back on its positive track with more strength this past week. The Nasdaq AD Line surged over the last 11 days and the NYSE AD Line hit a new 52-week high. Furthermore, the Cumulative Net New Highs Lines both hit...
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SPY Forms Indecisive Candlesticks After Gap
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
No change. Stocks remain strong. SPY is up over 5% the last 11 days. Small indecisive candlesticks formed after Wednesday's gap up, but the gap is holding. Even though potential resistance from the February-March highs is close and stocks are short-term overbought, there is simply no discernable selling...
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Sector Performance Outside of Energy Remains Mixed in 2011
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The sector PerfChart shows the relative performance of the nine sectors. Relative performance equals the sector gain less the gain in the S&P 500. Year-to-date, the energy sector is the only standout performer. Of the other eight, seven are relatively weak and only the industrials sector is outperforming...
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