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CONSUMER STAPLES SPDR HITS NEW HIGH -- REVIEW OF PAST STAPLE LEADERS -- AND SOME NEW ONES -- COLLAPSING DOLLAR MAKES COMMODITIES TOP ASSET PERFORMER -- WEEKLY MACD LINES ARE STILL NEGATIVE BUT ARE GETTING CLOSE

by John Murphy,

Chief Technical Analyst, StockCharts.com

CONSUMER STAPLE HIGH ... On September 17 I showed the Fidelity Consumer Staples Fund hitting a new high. This week I'm showing the Consumer Staples Select SPDR (XLP) doing the same. Chart 1 shows the XLP trading over its early June intra-day peak at 27.87. It gets...   READ MORE 

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REVISITING THE SUBJECT OF WHETHER TECHNOLOGY STRENGTH IS ENOUGH TO OVERCOME FINANCIAL WEAKNESS -- UPDATE OF JUNE ARTICLE ON SAME SUBJECT -- AT THE MOMENT, BOTH ARE RISING

by John Murphy,

Chief Technical Analyst, StockCharts.com

WHAT'S THE REAL MESSAGE... One of our readers asked a question that I've been thinking a lot about lately. It has to do with the conflicting messages being given by the weak financials and strong technology. Financial stocks are usually viewed as leading indictors for the...   READ MORE 

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RELATIVE STRENGTH IN LARGE CAPS -- S&P 500 EQUAL WEIGHT ETF LAGGING -- S&P 100 ETF STALLS AT RESISTANCE -- RSP HITS KEY RETRACEMENT -- IDENTIFYING CORRECTIONS -- USING OSCILLATORS FOR OVERSOLD BOUNCES -- FINDING MORE SIGNALS

by John Murphy,

Chief Technical Analyst, StockCharts.com

LARGE CAPS CONTINUE TO LEAD... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor Bigger is better when it comes to relative strength in the current market environment. John Murphy has been talking about leadership in large technology stocks and the Nasdaq...   READ MORE 

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NASDAQ 100 HITS NEW HIGH -- ADD SOFTWARE TO THE MARKET LEADER LIST -- ORACLE BREAKS OUT -- MICROSOFT IS PLAYING CATCH UP

by John Murphy,

Chief Technical Analyst, StockCharts.com

NASDAQ 100 IS FIRST INDEX TO HIT NEW HIGH ... To no one's surprise, the Nasdaq 100 was the day's biggest percentage gainer and the first of the major market indexes to overcome its summer high. The NDX is now trading at the highest level in six...   READ MORE 

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MY REPLY TO SOME RECENT FEEDBACK -- ANOTHER LOOK AT GROUP LEADERS INCLUDING INTERNET AND TELECOM HOLDERS -- FINANCIALS AND RETAILERS STILL LOOK WEAK -- BIOTECH AND HIGH TECH STOCKS PUSH NASDAQ 100 TOWARD NEW 2007 HIGH

by John Murphy,

Chief Technical Analyst, StockCharts.com

PLEASE DON'T TAKE THINGS OUT OF CONTEXT... I always enjoy reading the "feedback" comments that I receive from my Market Messages. While they're not always complimentary, they do raise valid questions that I try to address in subsequent messages. In some instances, however, the...   READ MORE 

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BEARS BURNED BY BERNANKE

by Chip Anderson,

It's been a very long time, but we can now unequivocably say that we have an accommodating Fed. The lowering of interest rates was the next piece of our bullish jigsaw that fit perfectly. It's all coming together. The bond market knew it was coming. You...   READ MORE 

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BONDS HIT SUPPORT

by Chip Anderson,

Buy-on-Rumor and Sell-on-News is a classic Wall Street axiom. In the internet heyday, Yahoo! would surge into its earnings announcement and then correct with a pullback near the actual announcement. The iShares 20+ Year Bond ETF (TLT) surged with the lead up to the Fed meeting...   READ MORE 

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NEW BUY SIGNAL

by Chip Anderson,

Ever since the market hit its correction lows in August I have written three articles, each emphasizing that the odds favored a retest of those lows (see Chart Spotlight on our website). As it turns out, we haven't had any decline that I would classify as a retest,...   READ MORE 

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RIDING THE S&P SURGE

by Chip Anderson,

The "surge" of the past month in the S&P 500 is nothing short of astounding; and given the technicals involved - we believe prices are set to continue moving higher with a projection to 1630 into the October-December time frame. This represents a +6.8% rally...   READ MORE 

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YOU CAN BUY A FALLING DOLLAR FUND

by Chip Anderson,

I first wrote about this inverse dollar fund in April 2006 and again on July 13 of this year. The ProFund Falling US Dollar Fund (FDPIX) is a mutual fund designed to trade in the opposite direction of the US Dollar Index. In other words, the fund rises when the...   READ MORE 

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THE FED FIXED THINGS - OR DID IT?

by Chip Anderson,

The Fed's surprising move last Tuesday did wonders for the major averages and "wrecked" many technical forecasts in the process (oh well). As you can see below, Tuesday's rally moved the Dow well above the 50-day Moving Average (blue) which had been providing...   READ MORE 

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DOLLAR TUMBLE CONTRIBUTES TO BULLISH BREAKOUTS IN GOLD AND OTHER COMMODITIES -- CANADA AND LATIN AMERICA BENEFIT FROM RISING COMMODITIES AND FALLING DOLLAR -- A FALLING DOLLAR FUND RISES AS DOLLAR FALLS -- INVERSE MARKET FUNDS SHOULD BE SOLD

by John Murphy,

Chief Technical Analyst, StockCharts.com

FOREIGN CURRENCIES HIT NEW HIGHS AS DOLLAR PLUMMETS ... The last chart I showed on Tuesday was the US Dollar Index hitting a new low. In fact, it's now trading at the lowest level in fifteen years (since 1992). That was a direct side-effect of the Fed'...   READ MORE 

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NASDAQ 100 ETF STALLS NEAR JULY HIGH -- MICROSOFT SHOWS RELATIVE WEAKNESS -- UTILITIES SURGE WITH FED RATE CUT -- PG&E AND EXEL LEAD UTILITIES HIGHER -- HEALTHCARE SPDR RECAPTURES 200-DAY -- MERCK AND SCHERING LEAD HEALTHCARE

by John Murphy,

Chief Technical Analyst, StockCharts.com

QQQQ HITS RESISTANCE AT 50... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor The Nasdaq 100 ETF (QQQQ) surged with the rest of the market on Tuesday and then stalled around resistance at 50 on Wednesday. Resistance in this area stems...   READ MORE 

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FED'S BOLD MOVE PUSHES MARKET INDEXES THROUGH RESISTANCE BARRIERS -- DAY'S LEADERS ARE BASIC MATERIALS (INCLUDING GOLD), FINANCIALS, RETAILERS, SMALL CAPS-- LATIN AMERICA LEADS GLOBAL RALLY -- DOLLAR DROPS TO NEW LOW

by John Murphy,

Chief Technical Analyst, StockCharts.com

FINANCIALS SPDR CLEARS 50-DAY LINE ... Yesterday I wrote that one of the things the market needed to regain its footing was for the Financials SPDR (XLF) to clear its 50-day moving average. It did that today in pretty decisive fashion as shown in Chart 1. Equally impressive was...   READ MORE 

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FED CUTS FED FUNDS AND DISCOUNT RATES BY 50 BASIS POINTS -- FINANCIALS LEAD MARKET RALLY -- WEAK DOLLAR PUSHES GOLD TO RECORD HIGH

by John Murphy,

Chief Technical Analyst, StockCharts.com

FED ALSO LOWERS THE DISCOUNT RATE... The Fed gave the market all it wanted and more. Not only did it lower the Fed funds rate by 50 basis points, it lowered the discount rate a similar amount. Not surprisingly, the stock market is reacting very favorably. The Dow is surging...   READ MORE 

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TELECOM HOLDER SHOWS GOOD RELATIVE STRENGTH -- AT&T AND VERIZON ARE THE MAIN HOLDINGS -- ALTHOUGH BOTH HAVE STRONG CHART PATTERNS, VERIZON MAY OFFER THE BETTER VALUE

by John Murphy,

Chief Technical Analyst, StockCharts.com

TELECOM HOLDERS ... In some of my recent messages, I've been highlighting defensive groups like consumer staples, healthcare, energy, and gold. Telecom should also be included in that group. I've written several positive articles on the telecom group over the past two years, with the most recent...   READ MORE 

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COMMODITIES ARE WEEK'S TOP PERFORMER -- NATURAL GAS JOINS ENERGY RALLY -- XTO, APACHE, DEVON, AND NOBLE ARE GAS LEADERS -- EBAY POWERS INTERNET HOLDERS -- WATCHING P&F CHARTS AND MOVING AVERAGES FOR SIGNS OF IMPROVEMENT

by John Murphy,

Chief Technical Analyst, StockCharts.com

COMMODITY ETF TESTING OLD HIGH ... Commodities were the weak's strongest asset class through Thursday. Not surpisingly, the U.S. Dollar was the weakest. That commodity strength is displayed in Chart 1, which shows the DB Commodities Tracking Index Fund (DBC) moving up to challenge its summer highs. The...   READ MORE 

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MUTUAL FUND LEADERS OVER LAST TWO MONTHS ARE ENERGY, GOLD, HEALTHCARE, AND CONSUMER STAPLES -- PROCTER & GAMBLE AND PEPSI HIT NEW HIGHS -- COKE NEARS SIX-YEAR HIGH -- FINANCIAL BOUNCE HELPS MARKET GAIN MORE GROUND

by John Murphy,

Chief Technical Analyst, StockCharts.com

FIDELITY RANKINGS ... Using the Fidelity Carpet, I looked at the rankings of sector mutual funds over the last two months. Not surprisingly, two of the top sectors were energy and gold which reflected strong action in their respective commodities. Arthur Hill and I have been writing a lot of bullish...   READ MORE 

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RISING OIL WEIGHS ON DOLLAR AND AIRLINES -- BEARISH PATTERNS FOR SMH -- A TALE OF TWO GAPS -- IWM REMAINS STYMIED AT 80 -- BIOTECH HOLDRS SURGE -- DNA AND AMGN PUSH BBH HIGHER -- GILEAD BOUNCES OFF 200-DAY

by John Murphy,

Chief Technical Analyst, StockCharts.com

OIL SURGES TO NEW HIGHS ... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor The U.S. Energy department reported a drop in crude oil supplies and this sparked a rally in black gold. West Texas Intermediate Crude ($WTIC) moved above $79...   READ MORE 

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NYSE BULLISH PERCENT AND SUMMATION INDEXES ARE STILL IN BEAR TERRITORY -- THREE HEALTHCARE LEADERS WITH GOOD CHART PATTERNS -- CELGENE HITS RECORD HIGH -- STRYKER NEARS 2007 HIGHS -- MEDTRONIC ON VERGE OF BULLISH BREAKOUT

by John Murphy,

Chief Technical Analyst, StockCharts.com

ANOTHER LOOK AT BULLISH PERCENT INDEX ... One of our readers asked me to take a fresh look at the NYSE Bullish Percent Index (BPNYA). The BPNYA is the percent of NYSE stocks that are in point & figure uptrends. I wrote recently that moves below 50% are indicative of a...   READ MORE 

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US DOLLAR IS THREATENING LONG-TERM SUPPORT WHILE XAU INDEX IS CHALLENGING ITS OLD HIGH -- GOLD NEARS TEST OF 2006 HIGH

by John Murphy,

Chief Technical Analyst, StockCharts.com

DOLLAR IS SITTING ON BIG PRECIPICE ... The U.S. Dollar has been weighed down recently by the sharp drop in U.S. interest rates and the near certainty that the Fed will lower the Fed funds rate next week. That puts the greenback at a very dangerous point. Yesterday'...   READ MORE 

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PREPARE FOR A WEAKER DOLLAR

by Chip Anderson,

The jobs report sent a jolt to the stock market on Friday. We believe it'll be a temporary jolt, but a jolt nonetheless. That data gave the Fed all the ammunition it needs to do what the market has been expecting for weeks - to cut the fed funds...   READ MORE 

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FINANCE AND CONSUMER ETFs HAVE DOUBLE TOPS

by Chip Anderson,

The Finance SPDR (XLF) and Consumer Discretionary SPDR (XLY) formed large double tops this year, and both broke support in late July to confirm these bearish reversal patterns. Volatile trading ranges followed these support breaks (yellow ovals), but these ranges look like consolidations after a sharp decline. In other words,...   READ MORE 

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SCARY RETEST ON THE HORIZON

by Chip Anderson,

It is well known that October is the cruelest month on average, but sometimes September beats October to the punch. This may be one of those times. Looking at the chart below we can see that the market has bounced out of the August lows and has formed two short-...   READ MORE 

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BIOTECH ETF HOLDING ON

by Chip Anderson,

Although last week's broader market was under pressure, the long forgotten Biotech HOLDRs (BBH) showed surprising resilience, and, in fact, is on the cusp of a major breakout. If you'll recall, BBH has underperformed badly in the past, even while posting very good earnings. That puts...   READ MORE 

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VIX STILL IN AN UPTREND

by Chip Anderson,

Earlier in the week I heard a TV commentator (masquerading as an analyst) give his interpretation of the CBOE Volatility (VIX) Index. His conclusion of course was bullish. He correctly pointed out that peaks in the VIX usually coincide with market bottoms. He then bullishly concluded that since the VIX...   READ MORE 

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MARKET MOVING LOWER - DUH!

by Chip Anderson,

"The trend is your friend" or, in this case, the market's enemy. You may have noticed lots of vacillating in the traditional financial press this past week - gloom and doom after the market closes lower, supreme optimism the very next day when the market moves higher....   READ MORE 

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RISING YEN AND VIX STILL THREATEN GLOBAL BULL MARKET -- BREAKDOWN IN BOND YIELDS IS VOTE OF NO CONFIDENCE IN ECONOMY -- INVERSE FUNDS APPEAR TO BE FORMING BOTTOMS -- CHART REASONS WHY THE MARKET BOUNCE HAS PROBABLY ENDED

by John Murphy,

Chief Technical Analyst, StockCharts.com

SIGNS OF YEN BOTTOM THREATEN CARRY TRADE... In times of financial turmoil, we have to stand back and try to determine if major trend changes are taking place. That prevents us from losing our way with short-term market swings. I'm starting off today with a longer-range...   READ MORE 

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TERRIBLE JOB NUMBER SINKS STOCKS -- THE OTHER SHOE MAY BE ABOUT TO DROP -- BOND YIELDS PLUNGE AS PRICES RISE -- FALLING DOLLAR KEEPS GOLD STRONG -- WORST GROUPS ARE BROKERS, HOMEBUILDERS, REITS, CHIPS, AND TRANSPORTS

by John Murphy,

Chief Technical Analyst, StockCharts.com

WEAK AUGUST JOBS REPORT IS A STUNNER ... Economists were expecting nonfarm payroll jobs to expand by 110,000 during August. Instead, jobs dropped by 4,000. That's the first monthly loss of jobs in four years. June and July job increases were also reduced. According to Bloomberg, not...   READ MORE 

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GOLD CLOSES BACK OVER $700 AS PRECIOUS METAL STOCKS SURGE -- BARRICK GOLD HITS NEW RECORD -- VOLUME REMAINS LOW AS MARKET WAITS FOR FRIDAY JOB REPORT -- GOOD NEWS FAILS TO BOOST RETAIL STOCKS -- BIOTECHS CONTINUE TO GAIN GROUND

by John Murphy,

Chief Technical Analyst, StockCharts.com

GOLD SURGES ABOVE $700... There are a couple of reasons why gold may have staged a strong rally today. One is a weaker dollar. The dollar fell against most major currencies today. Another is rising energy prices. Gold often follows energy higher since both imply higher commodity inflation. Another factor...   READ MORE 

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GOLD ETF BREAKS OUT TO THE UPSIDE -- GOLD STOCKS ARE FOLLOWING -- BARRICK HITS NEW RECORD -- NEWMONT HITS NEW SUMMER HIGH

by John Murphy,

Chief Technical Analyst, StockCharts.com

GOLD ETF HITS NEW 16-MONTH HIGH ... Earlier in the week I pointed out the the streetTracks Gold Trust (GLD) was nearing a test of its summer high. In today's strong trading, the GLD has not only exceeded its July high but its spring 2007 highs as well....   READ MORE 

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RUSSELL 2000 SHOWS RELATIVE WEAKNESS -- FINANCE STILL LAGGING -- DOUBLE TOPS WORKING FOR XLF AND XLY -- WALMART AND KOHLS WEIGH ON RETAIL ETF -- SURGING OIL WEIGHS ON DOW TRANSPORTS -- COMPARING BIOTECH ETFS

by John Murphy,

Chief Technical Analyst, StockCharts.com

SMALL-CAPS AND FINANCE STILL LAGGING... Recent strength in the Nasdaq Composite and the Technology sector has been quite impressive over the last three weeks. However, this strength continues to be overshadowed by relative weakness in the Russell 2000 and the Finance sector. The Russell 2000 represents small-caps, which...   READ MORE 

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ENERGY AND TECHS CONTINUE TO LEAD MARKET HIGHER -- NASDAQ COMPOSITE CLEARS ITS 50-DAY AVERAGE -- YAHOO POWERS INTERNET SURGE -- -- TOP ETF GAINERS ARE INTERNET AND OIL SERVICE HOLDERS --GOLD JUMPS $10 AS MOST COMMODITIES RALLY WITH STOCKS

by John Murphy,

Chief Technical Analyst, StockCharts.com

INTERNET HOLDERS JUMP NEAR 4%... Energy and technology led the market higher again today. In fact, the day's strongest ETF was the Internet Holders (HHH) which jumped 3.8%. Chart 1 shows the HHH jumping impressively over its 50-day moving average today. The other three charts show...   READ MORE 

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OIL SERVICE STOCKS ARE STRONGEST ENERGY PLAY -- USING A MARKET CARPET TO FIND ENERGY LEADERS -- EARLIER MONTHLY SELL SIGNAL HAS BEEN ERASED -- S&P 500 NEARS TEST OF 50-DAY AVERAGE -- NASDAQ 100 HAS ALREADY CLEARED THAT BARRIER

by John Murphy,

Chief Technical Analyst, StockCharts.com

OIL SERVICE LEADS ENERGY SECTOR... Energy stocks have resumed their role as one of the market's strongest sectors. But there's more to it than that. We can break the energy sector down into three groups to see where the real energy leaders lie. All three lines...   READ MORE 

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NASDAQ 100 IS STILL THE STRONGEST MARKET INDEX -- SOME MORE RECENT QQQQ LEADERS ARE ADOBE, CISCO, AND DELL -- NASDAQ BIOTECH LEADERS INCLUDE BIOGEN IDEC AND CELGENE

by John Murphy,

Chief Technical Analyst, StockCharts.com

NASDAQ 100 IS YEAR'S AND SUMMER'S TOP INDEX... Arthur Hill wrote yesterday about leadership in the Nasdaq 100. Today's first two charts show the same thing, but in a different way. Chart 1 compares the performance of the six major market indexes since the...   READ MORE 

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QQQQ LEADS MARKET REBOUND -- APPLE AND INTEL POWER BIG TECHS -- NOKIA HITS 52-WEEK HIGH -- SEAGATE BREAKS RESISTANCE -- OIL SURGES ON INVENTORY NUMBERS -- BULLISH PERCENT INDICES FOR NDX AND THE DOW

by John Murphy,

Chief Technical Analyst, StockCharts.com

NASDAQ 100 LEADS REBOUND... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor Large-cap tech stocks led the market higher on Wednesday as the Nasdaq 100 ETF (QQQQ) recovered after Tuesday's drubbing. The ETF surged almost 3% and filled...   READ MORE 

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RECORD DROP IN HOME PRICES AND PLUNGE IN CONSUMER CONFIDENCE SINK STOCKS -- HOMEBUILDERS, FINANCIALS, AND SMALL CAPS LEAD DECLINE -- BOND YIELDS FALL AS VOLATILITY AND THE YEN JUMP

by John Murphy,

Chief Technical Analyst, StockCharts.com

FINANCIALS AND SMALL CAPS FALL THE HARDEST... Tonight's message is largely a repeat of the message I sent this morning. Except that things got even worse as the day wore on. I wrote last week that one of the ways to tell if the market rebound had any...   READ MORE 

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MORE BAD NEWS ON HOUSING MAY HAVE ENDED RALLY ATTEMPT AS FINANCIALS, HOMEBUILDERS, AND SMALL CAPS LEAD MARKET LOWER -- S&P 500 IS IN DANGER OF SLIPPING BACK BELOW ITS 200-DAY AVERAGE

by John Murphy,

Chief Technical Analyst, StockCharts.com

RECORD DROP IN HOME PRICES... The housing situation just keeps getting worse. The market lost some ground yesterday on news that the unsold inventory of homes was at a sixteen year high. Today's news that the price of homes fell by a record amount in the second quarter...   READ MORE 

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EXTREME PESSIMISM MARKS BOTTOM

by Chip Anderson,

We've discussed in the past the tendency of the market to put in long-term bottoms when the bearish sentiment reaches extreme levels. Extreme bearishness is exactly what we saw on Thursday, August 16. Over the past 4 years or so, we've experienced many occasions when...   READ MORE 

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EXPECTING SHORT-TERM TOP

by Chip Anderson,

In my August 17 article, Looking For A Retest, I speculated that we would get a bounce from the extreme price lows hit in mid-August, but that a retest of those lows needed to occur before we could be reasonably certain that the completion of a solid bottom had...   READ MORE