In my September 5 article I said that I thought is more likely that we would see a continued decline, rather than a retest of the July lows. This week the market blew out the July lows and was very near to crashing on Thursday. Then prices blasted up out... READ MORE
We'll admit last week was one of the more "interesting" trading weeks we have seen in a number of years, and if we must liken it to anything we've seen in our 25-years of trading - it would be the week before and of... READ MORE
A massive government rescue plan and a temporary ban on short selling has boosted the Financials Sector SPDR by nearly 12% (Chart 1). It's the day's strongest sector on a day when all sectors are in the black. Brokers (not shown) are up 12% and banks... READ MORE
FINANCIALS SURGE ... A massive government rescue plan and a temporary ban on short selling has boosted the Financials Sector SPDR by nearly 12% (Chart 1). It's the day's strongest sector on a day when all sectors are in the black. Brokers (not shown) are up 12%... READ MORE
VIX TESTS 2008 HIGHS ... I wrote earlier in the week that a rising CBOE Volatility (VIX) Index carries both good and bad news. The bad news is that a rising VIX is associated with falling stock prices. The good news is that a high VIX reading is necessary for any... READ MORE
STOCKS GET WALLOPED AGAIN... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor Another broad sell-off took hold on Wall Street Wednesday. All major index ETFs were down sharply with the Nasdaq 100 ETF (QQQQ) losing over 5% and the S&... READ MORE
FED MAY HELP AIG... The Fed's made two important decisions. One was to leave interest rates unchanged. The other was a late Bloomberg report that the Fed is considering a "loan package" to AIG. That report may have contributed to the late market rebound. Financials were... READ MORE
COMMODITIES DROP AS YEN AND BONDS JUMP ... Most attention today was focused on the meltdown in financial stocks and big drops in global stock markets. A lot of action, however, also took place in other financial markets. Crude oil prices tumbled more than $5.00 to crack psychological support near... READ MORE
BROKERS ARE BEING HIT HARD ... A combination of unprecented weekend financial events have put global stocks under heavy pressure. Lehman filing for bankruptcy, Merrill being sold to Bank of America, and AIG scrambling to stay afloat have created a financial storm in early trading. Bonds are the only asset class... READ MORE
SHORT VERSUS LONG-TERM COMMENTARY... Some of our readers have expressed confusion about the tone of some recent messages. They feel we sound bullish one day and bearish the next. I think those readers are confusing short-term comments with our long-term view. On Monday, for example, I wrote... READ MORE
NEW LOWS OUTPACING NEW HIGHS... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The 10-day simple moving average (SMA) for Net New Highs is a good medium-term indicator to assess broad market strength or weakness. Net New Highs equal new... READ MORE
A RISING VIX IS USUALLY BAD FOR STOCKS ... On Friday August 29, I wrote a Message about the CBOE Volatility (VIX) and the CBOE Put/Call Ratio (CPC) being too low to support a market rally. As far as I can see, that situation hasn't changed. Chart 1... READ MORE
HOMEBUILDERS AND REITS HAVE STRONG DAY ... The government's weekend takeover of Fannie Mae and Freddie Mac gave a boost to global stocks today. Among the biggest gainers were those related to housing and real estate. Charts 1 and 2 show the PHLX Housing Index and the Dow Jones... READ MORE
The U.S. dollar couldn't move lower forever. It had to turn and when it did, we knew things might get ugly for commodities. Since the July 14th low in the dollar index, we've seen the greenback rise over 10% (see Chart 1). That has sent... READ MORE
Stocks opened weak after Friday's employment report, but the bulls found their footing late morning and rallied for a mixed close. While it may seem positive that stocks firmed after bad news, keep in mind that stocks already priced in a lot of bad news with Thursday'... READ MORE
On August 15 I wrote an article pointing out that an ascending wedge had formed on the S&P 500 chart. I noted that this is a bearish formation, and that the most likely resolution would be a breakdown from the wedge followed by a price correction. The breakdown... READ MORE
The world's temperature gauge for risk is what we refer to as the "carry-trade" indicator...or the Euro/Yen Spread. When this spread is rising, then the world is said to be putting the carry-trade on and expanding risk profiles; conversely, when the spread... READ MORE
How high is "too high?" How low is "too low?" Think back to any time that you've owned a stock and think about when you started to get worried about it's performance. At what point did "your gut" start to... READ MORE
STOCKS FIRM AFTER EMPLOYMENT REPORT... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor The Labor Department reported that 84,000 jobs were lost in the month of August. Non-Farm Payrolls have declined for eight straight months now. Incidentally, the S&... READ MORE
BROAD SELLING RATTLES WALL STREET... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor Stocks were broadly lower on Thursday. The major market indices were all down around 3% with remarkably equal declines. Usually, the Nasdaq (techs) and Russell 2000 (small-caps)... READ MORE
SEMIS GET SLAMMED... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor Semiconductor stocks led the technology sector lower with steep losses on Wednesday. Charts 1 and 2 show the Semiconductor HOLDRS (SMH) and Semiconductor PowerShares (PSI) dropping sharply over the last... READ MORE
ENERGY STOCKS LEAD THE MARKET LOWER... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor A sharp decline in crude sparked broad selling pressure in energy stocks on Tuesday. The Energy SPDR (XLE) led the sectors lower by declining over 5%. Chart... READ MORE
SEPTEMBER IS USUALLY WEAKEST MONTH ... Earlier in the week I wrote that September and October were two of the most dangerous months of the year. A number of readers asked me to elaborate on that. Most seasonal patterns are taken from the Stock Trader's Almanac which contains a... READ MORE
OIL FALLS AND DOLLAR RISES ... A surprisingly strong second quarter GDP report helped the U.S. Dollar turn in another strong day. Chart 1 shows the Power Shares US Dollar Bullish ETF (UUP) closing near a new recovery high today. That continues the dollar uptrend that started a month ago.... READ MORE
STRONGER SECOND QUARTER GDP BOOST MARKET... At midday, the stock market is holding onto some impressive price gains. One of the drivers is stronger-than-expected second quarter GDP growth. Another factor is a strong performance by financials and consumer discretionary stocks. All are showing short-term chart improvement. Chart... READ MORE
QQQQ FINDS SUPPORT AT BROKEN RESISTANCE... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The Nasdaq 100 ETF (QQQQ) found support near its resistance break on Tuesday and bounced with a modest advance on Wednesday. Chart 1 shows the ETF surging above... READ MORE
FINANCIALS AND DISCRETIONARY STOCKS ARE FALLING... Little has changed from the market messages that I posted last week. Friday's low-volume bounce was just a minor interruption in the market's deteriorating technical condition. The market is starting the new week on a decided down note, and... READ MORE
CRB BOUNCES OFF SPRING LOW... Last week I wrote about the Reuter/Jefferies CRB Index testing chart support at its March low near 380. So far, that support has held. The CRB Index rose nearly 15 points today for one of its biggest gains in years. Chart 1 also shows... READ MORE
CONSUMER DISCRETIONARY STOCKS FAIL IMPORTANT TEST ... Last Friday I showed the Consumer Discretionary SPDR (XLY) testing its 200-day moving average. So far, it looks like that test is failing. Chart 1 shows two unsuccessful attempts to get through the major resistance line over the past week. Charts 2 and... READ MORE
The dollar has bottomed and is beginning to trend higher for the first time in several years. Dropping crude oil prices are pushing gas prices lower at the pump and the dollar is strengthening. That's a combo that should make most consumers feel wealthier in time. Europe'... READ MORE
The rally that began off the July lows has not demonstrated the kind of strength we normally expect from the deeply oversold conditions that were present at its beginning. Instead, the meager price advance has served only relieve oversold compression and advance internal indicators to moderately overbought levels. In the... READ MORE
The past month in the commodity markets has been a treacherous as we have seen it in recent years; and not one commodity has been spared. That said, our focus is upon gold futures given they have dropped from a high of $1,033.90 to their current level of... READ MORE
Until proven otherwise, the two strongest market sectors are still consumer staples and healthcare. And both are defensive categories. Chart 1 shows the Consumer Staples Select (SPDR) trading at a new eight month high after breaking through its spring high. It's nearing a test of its record high... READ MORE
When was the last time you saw a 100% accurate weather forecast for your area? Chances are that at least some of the weather predictions your local weather person tells you won't come to pass. In many cases, most of the predictions are wrong. So why do we... READ MORE
TWO SECTOR LEADERS ARE STAPLES AND HEALTHCARE ... Until proven otherwise, the two strongest market sectors are still consumer staples and healthcare. And both are defensive categories. Chart 1 shows the Consumer Staples Select SPDR) trading at a new eight month high after breaking through its spring high. It's... READ MORE
MORE ON SECTOR ROTATIONS... I keep getting questions on where we stand on the matter of sector rotation. We've pointed out repeatedly that defensive stock groups like consumer staples and healthcare have become new market leaders. That makes sense in a slowing economy. Earlier in the week, however,... READ MORE
CONSUMER STAPLES SPDR TURNS UP ... Despite recent signs of improvement in economically-sensitive groups like consumer disretionary stocks, investors still show a preference for more defensive consumer staples. These are stocks that do okay in good times and bad and don't rely on the state of the business... READ MORE
RETAIL BUYING BOOSTS CONSUMER DISCRETIONARY STOCKS ... On Friday, I wrote about signs of improvement in the consumer discretionary sector which has been benefiting from falling oil prices. I suggested that most of the improvement was coming from homebuilders and retailers. That was certainly true today with both groups having very... READ MORE
EURO COMPLETES DOUBLE TOP ... One of the main intermarket factors behind the recent plunge in commodity markets has been new strength in the U.S. Dollar. That's because commodity prices and the U.S. Dollar trend in opposite directions. In fact, the bull market in commodities since 2002... READ MORE
QQQQ MAKES A BREAKOUT BID... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor Last week I wrote about relative weakness in the Nasdaq 100 ETF (QQQQ) and its inability to break resistance. Chart 1 shows a change afoot. After a sharp decline... READ MORE