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BONDS YIELDS SURGE AS UNEMPLOYMENT FALLS -- FINANCE SECTOR REMAINS THE MAIN DRAG -- TECHNOLOGY AND CONSUMER DISCRETIONARY SPDRS NEAR 2007 HIGHS -- FINANCE SECTOR CONSOLIDATES NEAR RESISTANCE -- NDX AND SPX %ABOVE 50-DAY REMAINS BULLISH
by John Murphy,
Chief Technical Analyst, StockCharts.com
BONDS YIELDS SURGE AS UNEMPLOYMENT RATE FALLS... Even though non-farm payrolls rose by a paltry 36,000 in January, the unemployment rate fell to 9%. Anomalies and statistical errors aside, bonds took the news rather hard. Bonds fell and rates rose because a decline in the unemployment rate increases the...
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Indicator Summary Completes Fifth Bullish Month
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Despite relative weakness in small-caps, the consumer discretionary sector and the Nasdaq, the bulk of the evidence remains bullish for stocks. Moreover, this indicator summary has been positive since 3-September, five months now. The NYSE AD Line hit a new high this week. The S&P 500 ETF, S&...
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SPY Holds Gains as Short-term Nasdaq Breadth Turns Up
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
There is not much change on the charts as we head into the employment report. This is kind of like a Fed announcement, expect most action occurs before the NYSE and Nasdaq actually open. The report is issued at 8:30 AM ET and the stock exchanges open an hour...
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GOLD STOCKS RALLY ON PRECIOUS METAL BUYING -- IAMGOLD REACHES NEW RECORD -- KELLOGG AND HERSHEYS SURGE ON STRONG VOLUME -- CANADIAN MARKETS BENEFIT FROM RISING COMMODITIES
by John Murphy,
Chief Technical Analyst, StockCharts.com
GOLD STOCKS BOUNCE OFF 200-DAY LINE -- IAMGOLD HITS NEW RECORD... My Tuesday message showed the Market Vectors Gold Miners ETF (GDX) testing long-term support at its 200-day moving average, and suggested watching it closely for signs of an upturn. Today's strong rally in precious metals assets may...
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Charts of Interest: AZO, CHS, BBBY, EXP, FFIV, SOL, SPWRB
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
CHS forms bearish flag. FFIV firms in gap zone. SPWRB forms continuation HS pattern. Plus AZO, BBBY, EXP, SOL
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...
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SunPower Traces out a Bullish Continuation Pattern
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
There are two types of head-and-shoulders patterns: reversal and continuation. A reversal pattern changes the trend, while A continuation pattern resumes the trend. SunPower surged in September and then consolidated with an inverse head-and-shoulders. Neckline resistance resides in the 14.90-15.10 zone. A breakout would suggest a continuation of...
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GLD Firms in Downtrend as SPY Stalls Near New High
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The Gold SPDR (GLD) is trying to stabilize with a small inverse head-and-shoulders pattern. Gold has been one of the weakest instruments in 2011. The chart below shows GLD peaking around 139 and moving below 129 last week for a ±7.1% decline. Even though the short-term trend is clearly...
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RETAILERS AND CONSUMER DISCRETIONARY SECTOR STILL LAGGING -- ERTS LEADS SURGE IN VIDEO GAME STOCKS -- TTWO BREAKS OUT TO 52-WEEK HIGH -- NIKKEI 225 BOUNCES OFF SUPPORT -- SHANGHAI COMPOSITE BOUNCES OFF KEY RETRACEMENT
by John Murphy,
Chief Technical Analyst, StockCharts.com
RETAILERS AND CONSUMER DISCRETIONARY SECTOR STILL LAGGING... Link for todays video. Despite a big jump in the stock market on Tuesday, the Consumer Discretionary SPDR (XLY) and the Retail SPDR (XRT) remain key laggards. Again, this remains a concern because these companies are the most sensitive to changes in the...
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Gold ETF Forms Small Inverse Head-and-shoulders Pattern
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The Gold SPDR (GLD) remains in a clear downtrend, but a small inverse head-and-shoulders pattern is taking shape the last 10 days. Neckline resistance resides in the 131-131.5 area and a break above this level would reverse the 4-5 week slide. Also notice that the Dollar and gold have...
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$SPY Surges Above January High on First Day of Month
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
A downtrend is impossible when an index hits a new high. Monday's short-term trend reversal has become a whipsaw or simply a bad call. With a gap up and break above 130, SPY re-established its short-term uptrend. A postmortem reveals four reasons for the errant trend reversal. First,...
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Euro Top 100 Index Stays Above April High $EUR
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The Euro Top 100 Index ($EUR) may be underperforming the S&P 100, but the index is clearly in an uptrend. $EUR broke its April high in December and recorded a 52-week high in January. There is nothing but uptrend as long as the May trendline holds. This index...
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JUMP IN US MANUFACTURING PUSHES STOCK INDEXES TO NEW RECOVERY HIGHS -- SMALL CAPS HOLD 50-DAY LINE -- UPS PULLS TRANSPORTS HIGHER -- MATERIALS AND ENERGY RIDE COMMODITY WAVE -- ALCOA NEARS 52-WEEK HIGH -- DOLLAR AND BONDS DROP
by John Murphy,
Chief Technical Analyst, StockCharts.com
SMALL CAPS AND TRANSPORTS SURGE... Today's report that US manufacturing rose at the fastest pace since 2004 has had an uplifting effect on global stocks. As a result, stocks are rallying sharply with the S&P 500 trading at a new two-year high. Two other stock indexes...
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Watching Bonds for a Break as Euro Establishes Support
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Interest rates and bonds remain stuck in a never-ending trading range. Calling it "never-ending" will hopefully bring a quicker end to this consolidation. Bonds have been weighed down by rising commodity prices and strength in the economy. Oil surged over 7% the last two days and the Chicago...
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Charts of Interest: AAP, ERTS, INTU, M, MMM, PBR
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
AAP forms rising wedge, ERTS surges off support. INTU forms small triangle. Plus INTU,M,MMM,PBR.
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...
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IWM AND QQQQ FIRM NEAR SHORT-TERM SUPPORT LEVELS -- OIL LEADS ENERGY COMPLEX HIGHER -- ENERGY SPDR AND OIL SERVICE HOLDRS HIT 52-WEEK HIGHS -- SURGE IN COPPER PUSHES BASE METALS ETF HIGHER -- BONDS SLUMP AS COMMODITIES SURGE
by John Murphy,
Chief Technical Analyst, StockCharts.com
IWM AND QQQQ FIRM NEAR SHORT-TERM SUPPORT LEVELS... Link for todays video. After a sharp decline on Friday, the major index ETFs rebounded on Monday and then consolidated. Chart 1 shows the Russell 2000 ETF (IWM) falling over 2% on Friday and then forming a doji on Monday. These candlesticks...
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Channel Support Break in Egypt ETF Preceded Upheaval
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Last week's upheaval in Eqypt contributed to a sharp decline in US stocks on Friday. Even though the upheaval began early last week (Tuesday), the Egypt ETF (EGPT) gave fair warning with a support break a week earlier (January 18th). This looks like a classic case of the...
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Short-term Evidence Turns Bearish for Stocks
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After grinding higher for several weeks to keep the uptrend in place, stocks turned sharply lower on Friday and the bulk of the short-term evidence is now bearish. Media suggests that the turmoil in Egypt is the culprit for the sharp decline in stocks and the bounce in the Dollar,...
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EGYPT TURMOIL ACTS AS CATALYST FOR STOCKS THAT WERE DUE FOR A PULLBACK -- EMERGING MARKETS LEAD GLOBAL DECLINE -- UPSIDE BREAKOUT IN VIX COINCIDES WITH S&P 500 BREAKING 20-DAY AVERAGE
by John Murphy,
Chief Technical Analyst, StockCharts.com
MARKETS WERE RIPE FOR A PULLBACK ... It took the turmoil in Egypt to finally cause some profit-taking in global stocks and bounces in safe havens like bonds, gold, and the dollar. Arthur Hill wrote yesterday about how the dollar and gold had reached potential support levels and were due for...
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Consumer Discretionary SDDR Fails to Hold Breakout
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The Consumer Discretionary SPDR (XLY) broke above consolidation resistance on Thursday, but failed to hold this breakout after a sharp decline early Friday. XLY formed a long black candlestick that pushed the ETF to its lowest level since late December. An important support test is at hand.
Click this image...
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EURO/DOLLAR INDICES HIT FIB RETRACEMENTS -- GOLD NEARS TRENDLINE AS RSI HITS SUPPORT -- DISSECTING THE PERCENT PRICE OSCILLATOR -- OIL DIVERGES FROM STOCK MARKET -- SMALL BEARISH DIVERGENCE FORMS IN NYSE AD VOLUME LINE
by John Murphy,
Chief Technical Analyst, StockCharts.com
EURO AND DOLLAR INDICES HITS FIBONACCI RETRACEMENTS ... Link for todays video. Some classic inter-market relationships were shaken, and perhaps stirred, over the last few weeks. First, both the Dollar and gold declined rather sharply the last three weeks. Second, weakness in the Dollar and strength in stocks did not help...
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Cracks Appearing in the Bullish Case
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The indicator summary remains positive, but cracks in the bullish case are starting to appear. It all started with relative weakness in small-caps and the consumer discretionary sector, two important areas of the market. This week we saw DIA, QQQQ and SPY eke out new 52-week highs, but MDY and...
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SPY Hits Another New 52-week High
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
There is no change in the short-term trend or key indicators. Price-wise, the SPY trend is up as the ETF holds its rising price channel. Key support on the 60-minute chart remains at 128. A move below this level would reverse the current uptrend and call for a retracement of...
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Steel ETF Hits Resistance with Bearish Engulfing and Harami
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The Steel ETF (SLX) is running into stiff resistance just above 75 with a bearish engulfing two weeks ago and a potentially bearish harami today. After a gap and long white candlestick on Tuesday, the stock moved sharply lower today with a long black candlestick. Today's body (open-close)...
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WHY RISING BOND YIELDS MAY BE HELPING THE HOUSING MARKET BY CREATING A NEW URGENCY TO BUY -- FOREIGN TIGHTENING IS ALSO PUSHING US BOND YIELDS HIGHER AND PRICES LOWER -- FALLING BOND PRICES CONTINUE TO FUEL STOCK RALLY
by John Murphy,
Chief Technical Analyst, StockCharts.com
PENDING SALES OF EXISTING HOMES RISES FOR THIRD MONTH... It was recently reported that home sales for 2010 were the lowest on record. It was also reported, however, that those sales jumped sharply near year end. It was further reported today that pending sales of existing U.S. homes rose...
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Clint Eastwood Gives Advice to the Bears
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
It is certainly tempting to pick a top and turn bearish now, but such thoughts bring me back to a quote from Dirty Harry. You've got to ask yourself one question: "Do I feel lucky?" Well, do ya punk bear? As noted before, sentiment is excessively...
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Charts of Interest: AMGN,BOOM, FLO,GME,LEAP,LOGI,WDC
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Don't forget that it is earnings season! AMGN falls after shooting star. BOOM forms bull flag. GMS hits resistance at gap. Plus FLO, LEAP, LOGI and WDC.
This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell...
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New Highs Still Outpacing New Lows
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
From the pre-defined scans page, the number of new 52-week highs continues to outpace the number of new 52-week lows. This is true for the Nasdaq, NYSE, Amex, TSE and CDNX. The latter two are Canadian exchanges. New highs are a show of strength, not weakness.
Click this image for...
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BONDS PLUNGE AFTER FED STATEMENT RATES CHALLENGE RESISTANCE -- RUSSELL 2000 ETF ESTABLISHES SUPPORT -- MOMENTUM REMAINS BULLISH FOR MATERIALS SECTOR -- MEASURING SECTOR RELATIVE PERFORMANCE WITH PERFCHARTS -- XLY HOLDS SUPPORT AND RECORDS 52-WEEK HIGH
by John Murphy,
Chief Technical Analyst, StockCharts.com
BONDS PLUNGE AFTER FED STATEMENT... Link for todays video. Todays Fed policy statement offered few surprises as policy makers elected to keep the Fed Funds target unchanged (0-.25%) and continue its plan to purchase some $600 billion of US Treasuries. This program is slated to extend into June, but...
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SPY Stalls as Fed Announcement Looms
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Stocks have traded flat the last few days, but the fireworks could start soon. The State of the Union address is out of the way with no major surprises and the Fed makes its policy statement today. Fed days are dangerous because of their volatility, which usually kicks in around...
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Materials Lag in 2011 as Industrials Lead
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The year-to-date sector scorecard shows the Basic Materials SPDR (XLB) lagging the S&P 500. Moreover, XLB is the only sector sporting a loss for 2011. The technology, industrials, energy and finance sectors show relative strength with gains greater than the S&P 500.
Click this image for...
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EMERGING MARKETS ISHARES BACK OFF FROM PREVIOUS HIGH ON BRIC WEAKNESS -- EUROPEAN HOLDERS TEST RECENT HIGH AS BRITAIN WEAKENS -- S&P 500 REMAINS ABOVE 20-DAY AVERAGE AS VIX CONTINUES TO TEST OVERHEAD RESISTANCE
by John Murphy,
Chief Technical Analyst, StockCharts.com
CHINA AND INDIA PULL EEM LOWER... I wrote an article last Thursday about the growing likelihood of a stock market pullback. That earlier piece was based mainly in signs of a short-term overbought condition. Another warning sign of a stock pullback is coming from emerging markets which have been market...
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Charts of Interest: ARO, AZO, LLY, PFCB
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
It's earnings season. Stocks reporting earnings are prone to higher volatility and risk. ARO backs off resistance, AZO forms tight consolidation. LLY firms on big volume. PFCM forms bear flag.
This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell,...
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Stocks Remain Buoyant as Sentiment Indicators Warn
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Stocks were broadly higher on Monday as the Dow Industrials zoomed to a new 52-week high. The Russell 2000, S&P 500 and Nasdaq 100 were also up on the day, but did not record new 52-week highs. The Dow is leading. The rest are lagging. I remain concerned...
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DJ Wheat Index Breaks Consolidation Resistance $DJAWH
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Grains are on the run with a breakout in the DJ-UBS Wheat Index ($DJAWH). The chart below shows the index surging in early December, consolidating for seven weeks and then breaking consolidation resistance the last few days. RSI broke its downtrend in early December and held the 40-50 support zone...
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USING THE SLOPE TO DETERMINE THE TREND FOR QQQQ AND SPY -- LOW SLOPE READING SHOWS RELATIVE WEAKNESS IN SMALL-CAPS -- DOW TRANSPORTS FAILS TO CONFIRM DOW INDUSTRIALS -- BOND ETF FORMS BEAR WEDGE AS FED MEETING STARTS
by John Murphy,
Chief Technical Analyst, StockCharts.com
USING THE SLOPE TO DETERMINE THE TREND FOR QQQQ AND SPY... Link for todays video. Using the Slope indicator, chartists can quickly determine if a specific trend is up or down. First, chartists must choose their time horizon. Sharpcharts sets the Slope at 20 periods by default. This is 4...
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SPY Heads into Big News Week with Breadth at a Crossroads
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
It is a pretty big week news-wise. First, earnings season is in full swing with over 350 reports slated for this week (and next). Second, the Fed starts its two day meeting on Tuesday with its policy statement expected at 2:15PM on Wednesday. Third, there will be a smattering...
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VIX STARTS TO BOUNCE
by John Murphy,
Chief Technical Analyst, StockCharts.com
Two Thursday's ago (January 6), I showed the CBOE Volatility (VIX) Index having reached a potential support level at last spring's low near 15, and warned that a bounce off that level could cause a stock market pullback. That's because the VIX and stocks...
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WHY THE MARKET IS WRONG
by Carl Swenlin,
President and Founder, DecisionPoint.com
In my business I am exposed to the writings of a lot of really smart people, and it is never hard to find a few who are trying to explain to us why the market is wrong. The market is wrong, of course, because it has blithely gone its merry...
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RALLY TIME!
by Richard Rhodes,
Founder and President, Rhodes Capital Management and Rhodes Trading Group
The recent rally in the broader stock market has begun to correct; and it shall likely correct for the next several weeks. We view this decline much in the same manner as the Jan-2010 to early Feb-2010 decline, which the S&P lost roughly 106 points or nearly -10%...
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TRADERS ARE ALL IN
by Tom Bowley,
Chief Market Strategist, EarningsBeats.com
Complacency in the market was setting records this past week. The technicals? They look great. But can the market keep moving higher short -term when options traders are betting on it en masse? Well, maybe, but if you enter stocks on the long side at this level, please understand the...
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