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BOND ETF HITS RESISTANCE - DOLLAR CONTINUES ITS RISE - LESSONS FROM PRIOR BEAR MARKET - A QUICK TOP ON 2001 - A DRAWN OUT TOP IN 2002 - TECHNICAL ANALYSIS IS FRACTAL - S&P 500 HITS IMPORTANT RESISTANCE ZONE
by John Murphy,
Chief Technical Analyst, StockCharts.com
BOND ETF HITS RESISTANCE... Link for todays video. After a pretty good rally in January, the 20+ Year Treasury ETF (TLT) hit resistance last week and fell back over the last three days. Chart 1 shows TLT breaking support the 91.5-93 support zone with a sharp decline in...
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Commodity ETFs Under Pressure in 2010
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
2010 has not been a good year for commodity ETFs so far. The PerfChart below shows six commodity ETFs from December 30th to February 2nd. Five of the six are down with the The DB Base Metals ETF (DBB) down over 10%. The Gold ETF (GLD) is the only gainer....
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SPY surges to short-term resistance
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
SPY hit the 62% retracement last week and bounced with two good moves this week. At this point, I still consider the medium-term trend up on the daily chart. SPY forged a higher high in early January and held support so far in February. Moreover, the ETF bounced at...
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DOLLAR PULLS BACK FROM 200-DAY AVERAGE AS COMMODITIES BOUNCE OFF CHART SUPPORT -- SURGING LUMBER PRICES MAY CARRY GOOD NEWS FOR HOMEBUILDERS AS DR HORTON LEADS A STRONG HOUSING RALLY -- MARKET REBOUNDS AGAIN ON LIGHT VOLUME
by John Murphy,
Chief Technical Analyst, StockCharts.com
DOLLAR PULLBACK BOOSTS COMMODITIES... Chart 1 shows the DB Bullish Dollar Fund (UUP) meeting some resistance near it 200-day moving average. That's giving a nice boost to commodity markets which is coming at a good time since several commodities are testing support levels. Chart 2, for example,...
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BIOTECHS SHOW NEW HEALTHCARE LEADERSHIP -- BIOTECH HOLDERS NEAR RECORD HIGH -- BIOGEN NEARS BULLISH BREAKOUT AS AMGEN TURNS UP -- GILEAD HITS SIX-MONTH HIGH WHILE GENZYME EXCEEDS 200-DAY LINE -- FIDELITY BIOTECH FUND IS WEEK'S TOP GAINER
by John Murphy,
Chief Technical Analyst, StockCharts.com
BIOTECH HOLDERS TEST OLD HIGHS ... We've been writing for several months about the new upside leadership in the healthcare sector, and have taken that as a sign that investors were turning a bit more defensive. [The same is true of consumer staple stocks]. Chart 1 shows the Health...
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Nasdaq Net New Highs near zero
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
With the decline over the last few weeks, Net New Highs on the Nasdaq moved below +50. This indicator was above +200 in early January and is now flirting with negative territory. Net New Highs equals new 52-week highs less new 52-week lows.
Click this chart for details...
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SPY firms for a day
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
SPY took its decline to the brink of a support break, but manage to firm with a good bounce on Monday. This is enough to stave off a medium-term support break and keep the medium-term uptrend alive. The reasons for support around 108-109 remain unchanged. Support stems...
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XLB leads oversold bounce
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The harder they fall, the bigger they bounce. The Materials SPDR (XLB) led the sectors lower by declining around 15% from high to low the prior three weeks. In the process, the ETF was down 11 of the last 15 days. After becoming oversold on Friday (see RSI), the ETF...
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DOLLAR INDEX HITS FIVE MONTH HIGH ($USD,$XEU) - GOLD FINDS SUPPORT ($GOLD,GLD) - OIL HITS POTENTIAL SUPPORT ($WTIC) - BONDS HIT RESISTANCE ZONE ($USB)
by John Murphy,
Chief Technical Analyst, StockCharts.com
US DOLLAR INDEX HITS FIVE MONTH HIGH... Link for todays video. The US Dollar Index ($USD) reversed course in December and continued strong in January. Weakness in the Euro is the main catalyst for this move. Currencies, and other securities for that matter, can decline simply from a lack of...
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SPY hits 62% retracement
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
SPY opened strong and closed weak for the second time in two days. Another long red candlestick formed as the ETF closed below its late November low. Even though SPY broke support, keep in mind that the last true reaction low was in early November around 103 and SPY remains...
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SUPPORT COMING INTO PLAY FOR IWM AND SPY - AD VOLUME LINES DECLINE FROM 52-WEEK HIGHS - NET NEW HIGHS HIT MOMENT-OF-TRUTH - BULLISH PERCENT INDICES REMAIN ABOVE 50% - TECHNOLOGY MATTERS
by John Murphy,
Chief Technical Analyst, StockCharts.com
SUPPORT COMING INTO PLAY FOR IWM AND SPY... Link for todays video. With the January decline, the Russell 2000 ETF (IWM) has retraced around 50% of the November-January advance and returned to its triangle breakout. Chart 1 shows IWM breaking triangle resistance way back in early December. This broken...
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Technology sector sees red
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Within the S&P Sector Carpet, the technology sector showed a lot of red on Thursday. From the Sector Carpet, click on the technology heading to focus on this sector. Even though most stocks were down, there were still a few gainers with Citrix and BMC Software gaining more...
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Bullish evidence weakens
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
With a sharp decline over the last two weeks, it is hardly surprising that the bullish evidence weakened considerably since early January. Three indicators are considered bearish. The McClellan Oscillators both plunged below -50 to signal a sharp thrust in selling pressure. Momentum is bearish as MACD for SPY moved...
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SPY continues support test
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
SPY opened strong and closed weak to form a long red candlestick. After three indecisive candlesticks Monday through Wednesday, Thursday's failed rally reflects the skittishness of traders/investors. Even so, SPY remains in a support zone around 109 (plus or minus 1 point). SPY has been fluctuating above/...
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THE US DOLLAR ISN'T THE ONLY SAFE HAVEN CURRENCY -- THE JAPANESE YEN HAS BEEN EVEN STRONGER DURING JANUARY -- THE YEN IS ALSO TURNING UP RELATIVE TO OTHER GLOBAL CURRENCIES IN UNWINDING OF CARRY TRADE AND MOVE TO SAFETY
by John Murphy,
Chief Technical Analyst, StockCharts.com
YEN IS ALSO A SAFE HAVEN CURRENCY ... Most currency focus has been on the rise in the U.S. Dollar since December. That has not only undermined the commodity rally, but is also siphoning money out of global stocks that had been trending in the opposite direction of the greenback....
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JANUARY ROTATION OUT OF EMERGING MARKETS AND BASIC MATERIALS INTO CONSUMER STAPLES AND HEALTCHARE SHOWS MOVE AWAY FROM RISK AND TOWARD SAFETY -- TECHNOLOGY IS FALLING HARD TODAY AND IS PULLING REST OF MARKET LOWER
by John Murphy,
Chief Technical Analyst, StockCharts.com
MARKETS TURN RISK AVERSE... Arthur Hill has been showing the recent rotation out of former market leaders and into defensive market sectors that are considered to be risk averse. It's an important point that bears repeating. While it's important to look at the technical condition of...
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Most actives reflect bounce in finance sector
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
From the Free Charts page, users can access a quick list of the 10 most active stocks for the Nasdaq and NYSE. As Wednesday's lists show, the finance sector was strong on Wednesday. Four of the ten most active were from the finance sector and these four were...
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Charts worth watching
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
ETFs: XLF, XLY, GDX, XHB, SMH, TLT
Stocks: A, DVN, ERTS, KBH, LAZ, PGN, PSA, QCOM, WFC...
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SPY continues to firm
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After becoming oversold with last week's decline, SPY firmed over the last three days and established some support around 109. There was an inside day on Monday, a failed rally candlestick on Tuesday and a strong close candlestick on Wednesday. Obviously, the strong close candlestick is the opposite...
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DOW ETF FIRMS NEAR SUPPORT (DIA) - PULLBACK HITS FIRST TEST ($COMPQ,$NYA) - LESS THAN 50% OF STOCKS ABOVE THEIR 50-DAY SMAS - COMMODITIES REMAIN UNDER PRESSURE (DBC,DBA,DBB) - AMGEN AND GILEAD LIFT BIOTECHS (BBH,AMGN,GILD)
by John Murphy,
Chief Technical Analyst, StockCharts.com
DIA FIRMS NEAR SUPPORT ... Link for todays video. After becoming oversold with last weeks decline, stocks firmed over the last three days. Important support levels are coming into play for a number of key indices and ETFs. Chart 1 shows the Dow Diamonds (DIA) hitting support around 101-102. This...
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JP Morgan breaks support
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
JP Morgan is leading the market and the finance sector lower with a break below its September-December lows. The stock first established support in the 40-41 zone in mid August and held this zone in September, October, November and December. January is proving different with a clear break...
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SPY remains on the canvas
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After two long red candlesticks and a sharp decline last week, the S&P 500 ETF (SPY) stalled the last two days. A small black candlestick formed on Monday and a failed rally candlestick formed on Tuesday. I call this a failed rally candlestick because the ETF hit 110....
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CHINA LEADS GLOBAL RETREAT -- INTERMARKET REVERSALS RAISE WARNING FLAGS -- MARKET IS OVERSOLD SHORT-TERM -- BUT WEEKLY MACD LINES HAVE TURNED NEGATIVE -- THAT INCREASES ODDS FOR A 10% CORRECTION
by John Murphy,
Chief Technical Analyst, StockCharts.com
CHINA ISHARES LEAD GLOBAL RETREAT... I wrote a message on January 12 about Chinese central bankers starting to tighten credit, and the fact that Chinese stocks were no longer showing relative strength. In fact, China had lagged the global rally for several months. The biggest negative divergence took place in...
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CHRW forms big triangle
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
CH Robinson (CHRW), a trucking company, formed a big triangle consolidation over the last nine months. The stock has recently been consolidating near triangle support and a break below 56 would be bearish.
Click this chart for details...
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SPY stalls in support zone
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After a long red candlestick and sharp decline on Friday, the S&P 500 ETF (SPY) stalled with an inside day on Monday. Taken together, the red candlestick and smaller black candlestick form a harami, which is a potential reversal pattern. The inside day signals indecision that sometimes foreshadows...
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XHB hits resistance
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The Homebuilders SPDR (XHB) finished 2009 strong, but ran into resistance from its summer highs in 2010. The ETF first hit resistance around 16 in late July and traded in the 14-16 are the last 6-7 months. The stock has long-term support at 13.5 and a...
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ELLIOTT WAVE COUNT FOR THE S&P 500 - RELATIVE STRENGTH IN DEFENSIVE SECTORS - MEDIUM-TERM UPTRENDS REMAIN IN FORCE - LONG-TERM WEAKNESS IN FINANCE - COMMODITIES LIKELY TO FOLLOW STOCKS - XLE HITS LONG-TERM RESISTANCE ZONE
by John Murphy,
Chief Technical Analyst, StockCharts.com
ELLIOTT WAVE COUNT FOR THE S&P 500 ... Link for todays video. At the risk of opening Pandoras box, I am going to offer some long-term Elliott Wave analysis for the S&P 500. Like much of technical analysis, Elliott Wave is subjective and open to interpretation....
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Mean reversion strategies kicking in
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Last week's three-day decline in the S&P 500 ETF (SPY) was the steepest 3-day decline since March, Despite two long red candlesticks and this 3.9% decline, I still consider the medium-term trend up. As long as the medium-term trend remains up,...
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IT ALL COMES DOWN TO DEFENSE
by Tom Bowley,
Chief Market Strategist, EarningsBeats.com
Ask any NFL coach and he'll tell you unequivocably that defense wins championships. If you're looking for market-beating returns, then you'd better improve your defense first, then your offense. Plain and simple, Invested Central did everything possible to prepare defensively for last week&...
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$USD INDICATING A CHANGE?
by Richard Rhodes,
Founder and President, Rhodes Capital Management and Rhodes Trading Group
The past week was punctuated with sharp stock market weakness, with many pundits believing that it is transitory and doesn't have the makings of a larger top. Quite obviously, there is nothing definitive at this juncture, but we're giving odds of over 50% that indeed a...
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ON HIATUS THIS WEEK
by John Murphy,
Chief Technical Analyst, StockCharts.com
John Murphy is on hiatus this week. His article will return in the next issue....
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FINALLY A BREAKDOWN
by Carl Swenlin,
President and Founder, DecisionPoint.com
The S&P 500 has finally decisively broken down through the support formed by the rising trend line that marks the bottom of the ascending wedge formation. This was the technical expectation, but the market sure did fight it. The break has also carried the price index through the...
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STOCKCHARTS IS GOING TO "BATS" FOR YOU
Hello Fellow ChartWatchers!
I am thrilled to officially announce that StockCharts.com now provides free real-time charts and quotes for everyone!
Thanks to the BATS exchange and the fine folks at IDC/Comstock, our free users and our Basic and Extra members are now able to see charts based...
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OFFENSIVE SECTORS TAKE A HIT
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
Offensive sectors took a hard hit in January. Offensive sectors include technology, consumer discretionary, industrials and finance. I call them the offensive sectors because their participation is key to a bull market. Technology represents growth and the appetite for risk. Consumer discretionary is the most economically sensitive sector. Industrials represent...
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TECHS LEAD THE MARKET LOWER - A ROUGH MONTH FOR TECHNOLOGY - FROM BIG BANKS TO BIG TECHS - VOLATILITY SPIKES - MAJORITY OF STOCKS STILL ABOVE THEIR 200-DAY SMA - PERCENT ABOVE THEIR 50-DAY SMA PLUMMETS
by John Murphy,
Chief Technical Analyst, StockCharts.com
TECHS LEAD THE MARKET LOWER ... Link for todays video. John Murphy is away this week and will return next week. Stocks came under pressure again on Friday with the technology sector leading the way lower. Chart 1 shows the Nasdaq 100 ETF (QQQQ) breaking below consolidation support on Thursday and...
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Steel stocks hit hard
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The s ector carpet over the last four days shows lots of red. Within the S&P 500, three of the five biggest losses came from steel stocks (US Steel, Cleveland Cliffs and AK Steel). There were, however, a few gainer that can be spotted with the green squares....
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Evidence remains bullish for stocks
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The bulk of the evidence remains bullish for stocks, but this week's sharp decline put a dent in the bullish case. Some brief comments are posted after the jump. I will also be posting a market message later this afternoon.
-Net New Highs remain positive for Nasdaq and...
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Correction Targets for SPY
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
After consolidating around 114 for a couple weeks, SPY broke short-term support with a long red candlestick on Thursday. Even though this looks like a convincing support break, it is still just a short-term phenomenon because the medium-term trend remains up. With a medium-term uptrend still...
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DOW DROPS OVER 200 ($INDU,$TRAN) - MATERIALS SECTOR LEADS MARKET LOWER (XLB) - STEEL, METALS AND MINING PACE MATERIALS LOWER (SLX,XME) - BIG BANKS HIT HARD (XLF) - KEY INVESTMENT BANKS GIVE UP JANUARY GAINS (JPM,GS,MS)
by John Murphy,
Chief Technical Analyst, StockCharts.com
DOW DROPS OVER 200... Link for todays video. Stocks moved broadly lower on Thursday with the Dow loosing over 200 points. All major indices and sectors finished lower on the day. Chart 1 shows the Dow Industrials closing above 10700 on Tuesday and 10400 today. This two day decline was...
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All 30 Dow Stocks Down
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com
The CandleGlance page for the Dow shows all 30 stocks trading in negative territory early Thursday. These mini-candlestick charts provide an quick means to see current action and candlestick setups. From the four charts below, we can see sharp declines in Alcoa, American Express, Bank of America and Caterpillar....
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