Given the volatility of the capital markets these past two weeks, we think it instructive to step back and take a longer-term viewpoint of the stock market to discern where we may be in the cycle. In doing so, we find the S&P 500 large caps - the... READ MORE
We are continuing to make progress in our efforts to get a second data feed into our offices. A second data feed should help us avoid the kind of problems we had several weeks back. Unfortunately, two things are conspiring to slow our progress: the phone companies and the stock... READ MORE
Friday's higher prices continued the market rally that started the previous Thursday. The three charts below show major market ETFs all back above their 200-day moving averages, which removes any immediate threat of a bear market. All have recovered more than half of their July/August decline,... READ MORE
Last week, some significant positive technical developments occurred on our GalleryView chart of the Dow: After recovering to remain above the 200-day moving the previous week (see the red candle whose shadow dipped all the way to 12,517?), the Dow has rebounded nicely with a nice string of... READ MORE
WHERE'S THE VOLUME... Friday's higher prices continued the market rally that started the previous Thursday. The three charts below show major market ETFs all back above their 200-day moving averages, which removes any immediate threat of a bear market. All have recovered more than half... READ MORE
AGRICULATURALS ARE STRONGEST OF COMMODITIES... Commodity markets have come under pressure along with stocks over the past month -- but not by equal amounts. The CRB Index lost -7% during the liquidity crisis. The hardest hit group was the economically-sensitive industrial metals which fell -15%. The energy group lost -8%... READ MORE
VIX INDEX IS PULLING BACK... True to its history of trending in the opposite direction of stocks, the CBOE Volatility (VIX) Index continues to weaken after hitting a four-year high last Thursday (when the market bottomed). Chart 1 shows the VIX falling back to 23 and testing a short-... READ MORE
POSSIBLE LINK BETWEEN RATES AND STOCKS ... When volatility rises, asset classes become highly correlated. That's especially true with bonds and stocks. I'm referring here to bond "yields" instead of prices. Chart 1 shows that the 10-year T-Note yield (green line) and the... READ MORE
MAYBE GLOBAL GROWTH ISN'T THAT STRONG ... One of the mantras we keep hearing on TV is that strong global markets and economies will prevent the U.S. economy (and stock market) from suffering a serious slowdown. Since I happen to be of the belief that stock markets are... READ MORE
MARKET BOUNCES OFF IMPORTANT CHART SUPPORT ... Yesterday I showed the S&P 500 bouncing off its March low (after correcting 10%) and also the 400-day moving average (green line) which has ended every downside correction since the bull market started more than four years ago. I also pointed... READ MORE
CRB INDEX TUMBLES ... The global stock rout spilled over to the commodity pits. The CRB Index fell 10 points to close well under its 200-day average (Chart 1). Several newswires suggested that investors were selling commodities to finance stock losses. Earlier today, I showed sizeable losses in copper and... READ MORE
GOLD SUCCUMBS TO SELLING PRESSURE... My optimism on gold as a potential safe haven is being severely challenged today. Gold shares are being hit especially hard. Chart 1 shows the XAU Index falling more than 5% and falling to a new 2007 low. Earlier in the week I suggested the... READ MORE
DOW THEORY REVIEW... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor Today I would like to review Dow Theory and look at the current signal. The "Dow Theory" evolved from the writings of Charles Dow at the turn of... READ MORE
RETAILERS LEAD DAY'S DECLINE ... Spooked by tumbles in big retail chains like Wal Mart and Home Depot, retail stocks fell -3.5% today and led the rest of the market lower. Other big losers were homebuilders (-4%) and REITS (-3%). Heavy selling in homebuilders and retailers made Consumer... READ MORE
PRODUCER INFLATION WAS UP -- NOT DOWN AS REPORTED ... One of the major newswires reported this morning that inflation at the producer level came in lower than expected during July. The article was referring to the "core inflation" number (excluding food and energy) which was 0.1% (lower than... READ MORE
STOCKS LEAD THE ECONOMY... Over the weekend, I explained why we can't use the economy to predict the stock market. Because stocks turn down six to nine months before the economy. That doesn't mean that every market downturn leads to an economic slowdown or recession. That&... READ MORE
GLOBAL STOCKS ARE TESTING 200-DAY AVERAGES... With the all recent market turmoil, it's important not to lose sight of the big picture. We all know by now that the stock market has suffered a sharp downturn over the last month on record volume. And we all know... READ MORE
RESISTANCE KICKS IN... Over the past week, I've been plotting Fibonacci retracement lines over the major stock indexes to show where potential resistance levels (renewed selling) could be expected. A normal short-term bounce usually carries anywhere from a third (38%) to half (50%) of the previous downturn.... READ MORE
BANKS AND BROKERS ARE BIGGEST LOSERS... More subprime problems emerging from Europe have caused heaving selling in stocks around the world. Most of that scared money is contining to flow into Treasury Bonds which are up today. As has been the case recently on down days, financial stocks are the... READ MORE
A TALE OF TWO MARKETS ... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor Stocks rebounded over the last three days, but these rebounds need to be considered in the context of prior price action. While the advance in the Russell 2000... READ MORE
CONSUMER STAPLES MONTH'S TOP SECTOR... As usually happens when the stock market sells off sharply, money tends to flow to stocks with defensive characteristics. These are stocks that usually fall less during a market downturn -- and, hopefully, even gain ground while the rest of the market drops. The... READ MORE
The S&P 500 ETF (SPY) firmed this week and found some support. The ETF hit support from the 40-week moving average and broken resistance. The 40-week moving average is equivalent to the 200-day moving average and this level is important to the long-term trend.... READ MORE
A month ago I wrote an article stating that I thought that the 20-Week Cycle was cresting and that we should expect a decline into the cycle trough that would probably break down through the support provided by the bottom of the trading channel, setting up a bear trap.... READ MORE
Last week was a treacherous week indeed, with stock prices falling universally. That said, one of the "weakest indices" was related to the US small cap arena, and specifically to the Russell 2000 Index ($RUT). In the past, RUT led the market higher, but that changed last year... READ MORE
The chart above shows "John's Latest Performance Chart" that reflects the market's stronger and weaker groups during the hightly volatile month of July. All are plotted around the S&P 500 which lost 3.2% during July. [The S&P can also... READ MORE
The troops are mustered. The swords are out. The orders have been posted. The pieces are in place. The die has been cast. (The metaphors are getting lame. ) However you want to say it, the battle line for the Bulls and the Bears has been drawn. Can you spot it... READ MORE
JOHN'S LATEST PERFORMANCE CHART... Each week I post a performance chart under the headline shown above. It can be found on the John Murphy page. I usually show which market sectors, or industry group, are doing better than the S&P 500 (which is the industry benchmark... READ MORE
SHORT-TERM VIEW... I've received a large number of questions as to how gold holds up when stocks fall. What makes a firm answer to that difficult is that gold and stocks often trend together over the short run. Gold has also shown a tendency to correct along... READ MORE
SPY BATTLES 40-WEEK MOVING AVERAGE ... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor The S&P 500 ETF (SPY) is trying to firm this week and find support. The ETF declined sharply last week on record weekly volume (over... READ MORE
AUGUST THROUGH OCTOBER IS MOST DANGEROUS TIME... In my weekend analysis, I closed with the comment that I thought the market could suffer a 10% correction "between now and the autumn". I chose that time period for a very good reason. By the end of July, any summer... READ MORE
FIRST A SURVEY OF THE WEEK'S DAMAGE... It was the market's worst week since the bull market began more than four years ago -- both in terms of percentage losses, downside volume, and bad breadth. All market sectors and industry groups fell. Every single market index closed... READ MORE
S&P 500 HEADED FOR TEST OF 200-DAY LINE... The stock market had another bad day on Friday as all major stock indexes closed below Thurday's intra-day lows (and again on heavy volume). The first three charts show the week's technical damage done... READ MORE
HOUSING SECTOR CONTINUES TO WEAKEN ... I've suggested for some time that those calling for a housing bottom look at the long-term chart of homebuilders. If they had, they wouldn't be as surprised as they seem to be. [That includes the heads of the Fed and... READ MORE
SUPPORT LEVELS ARE BEING BROKEN... The market continues to drop on very bad breadth. Losers on the big board are swamping gainers by a 10 to 1 ratio. The same is true of downside volume versus upside volume. [The NYSE AD line hit a three-month low on Tuesday]. The... READ MORE
VALUE LEADING THE WAY DOWN... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor The Russell 2000 broke below its June lows this week and this break can be attributed to the "value" components. The Russell 2000 can be divided... READ MORE
FINANCIALS AND SMALL CAPS LED THE WAY ... Earlier today I showed heavy selling in the Russell 2000 iShares (IWM) and the Financials Select Sector SPDR (XLF). [Please see Market Message posted earlier today]. Unfortunately, things got worse as the day progressed. Chart 1 shows the IWM closing 2.8% lower... READ MORE
FINANCIAL SPDR NEARS TEST OF SPRING LOW ... One of our readers asked me recently if the daily chart of the Financials SPDR looked like a bullish "triangle" or a bearish "double top". This week's downside action has pretty much ruled out the "triangle&... READ MORE
We discuss so many different technical scenarios that sometimes we lose sight of what history has taught us. It's time to pause for a bit after a very nice rally in the equity markets and see what history has to say. For purposes of this discussion, all numbers... READ MORE
Despite a sharp decline over the last six weeks, the Finance SPDR (XLF) remains in a long-term uptrend on the weekly chart and support is at hand. The Finance SPDR (XLF) met resistance at 38 twice this year and declined to around 36-36.5 in June and July.... READ MORE
On Thursday our trend model for gold switched to a buy, which means our medium-term posture is bullish on gold; however, when I looked at a very long-term chart of gold I saw something that gave me a slightly queasy feeling. What I saw was that gold is... READ MORE