The sector rotations since 26-Feb reflect a defensive and nervous market. Things started changing on Wall Street with the sharp decline on 27-Feb and the PerfChart below shows sector performance since this decline. The Utility SPDR (XLU), the Industrials SPDR (XLI) and the Consumer Staples SPDR (XLP) are... READ MORE
One of my colleagues has been harassing me (in a friendly way) for not yet having declared myself a bear. The truth is that top picking is a treacherous business, and I have given it up in favor of letting trend models make my declarations for me. For example, I... READ MORE
The recent focus of the equity markets is upon the "sub-prime" mortgage problem; and upon the "yen-carry trade". We think both are valid concerns; however, the question of the "yen-carry trade" is more important in our mind than the "sub-... READ MORE
It's no secret that one of the main problems pulling the market down over the last month has been the fallout from subprime mortages. It's also no surprise to read that financial stocks (mainly banks and brokers) have been the weakest part of the market over... READ MORE
Hello Fellow Chartwatchers! Last week's recovery rally was crushed by Tuesday's big decline and while the Dow quickly rose back above 12,000, the technical damage was done. The chart below shows the important technical developments for the Dow in recent days. See if you can... READ MORE
CONSUMER STAPLES DOING RELATIVELY WELL... Last Friday I wrote about new signs of relative strength in the consumer staples sector. When I refer to relative strength, I mean how a group is doing relative to the S&P 500. That doesn't necessarily mean that a group is... READ MORE
GOLD STILL TESTING SUPPORT LINE ... I got an unusually large number of questions on the gold market. Actually, very little has changed since the last time we looked at it. Chart 1 shows the streetTracks Gold Trust Shares (GLD) still testing an uptrend line drawn under its October/January lows.... READ MORE
TESTING THE EARLY MARCH LOWS... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor The major indices moved lower in early trading, but recovered in the afternoon and closed strong. Tuesday's decline marked a test of the early March lows... READ MORE
MORE OF THE SAME ... I posted a market message earlier today to the effect that the same global intermarket problems that started exactly two weeks ago are re-surfacing. The sequence includes falling Chinese stocks, falling emerging markets, falling global stocks, a flight to safety into Treasury bonds, buying of... READ MORE
SUBPRIME MORTAGE CONCERNS SPREAD ... To no one's surprise outside of Wall Street (and the Fed), subprime mortgage concerns continue to spread to financial shares and the rest of the market. Brokers are down more than 3% today and are threatening their 200-day average (Chart 1). Another downleg... READ MORE
CONSUMER STAPLES ARE HOLDING UP RELATIVELY WELL ... One of the well-known market maxims is that consumer staples generally hold up better than the rest of the market in a market downturn. That has certainly been the case recently. Not the consumer staples haven't lost money over the... READ MORE
NOT A VERY IMPRESSIVE BOUNCE ... The market continued its low-volume bounce today. Light volume during a price bounce betrays a lack of bullish enthusiasm and doesn't inspire much confidence that the current bounce is anything more than a reflex rally from an oversold condition. The market also... READ MORE
LATE SELLING PUSHES STOCKS LOWER... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor A wave of selling pressure hit the market this afternoon and the major indices closed lower. Even though the declines were modest, the inability to hold gains shows... READ MORE
NYSE BULLISH % INDEX TURNS DOWN ... One of our readers asked for an update on the NYSE Bullish Percent Index. The BPI represents the number of stocks in an index that are on point & figure buy signals. Readings over 70 are considered overbought. Drops below 70 are usually associated with... READ MORE
MORTAGE SITUATION WORSENS... Since the market meltdown started last week, the economic community (aided by a willing TV media) keeps telling us that the subprime mortage problems are relatively limited and shouldn't impact on the economy or the stock market. And each day everything tied to housing and... READ MORE
We have been in the bearish camp on energy and over the past several months and for now remain on the bearish side. But anytime you take a position on the bullish or bearish side, you need to realize patterns that could change your view. The price of oil broke... READ MORE
The current breakdown in the S&P 500 looks quite similar to the May-June 2006 breakdown. Let's look at the May-June 2006 break down first. The S&P 500 surged from mid October to mid December (2005) and then began a slower zigzag higher... READ MORE
In light of this week's sharp decline (mini-crash?), the most obvious subject for discussion in this week's article is to question whether or not we are on the verge of another major crash. In my 12/8/2006 article, Crash Talk Is Premature, I stated:... READ MORE
Last week's market decline was quite interesting from a number of perspectives. First, the decline clearly mirrors the movement in Japanese Yen as the "carry-trade" is unwound; if one watches these closely, one will see that stock traders are cleary focused on the yen. We... READ MORE
Our main concern here is the relationship between the world's strongest currencies and the Japanese yen. Since 2000, the world's strongest currency has been the Euro (followed by the Swiss Franc, Canadian and Aussie Dollars, and the British Pound. The yen has been the weakest global... READ MORE
Hello Fellow Chartwatchers! This week's market gyrations have caused many people to stop and question the market's current position - sometimes quite emotionally. In times like this I like to go back to basics and look at some of the most impartial charts out there - Point and... READ MORE
BONDS SURGE AS GLOBAL STOCKS FALL... A plunge in Chinese stocks started the sharpest global stock downturn in four years. Emerging markets lost 8% on the week while foreign stocks in general fell 5.6%. By contrast, the U.S. lost a little over 4%. The hardest hit market sector... READ MORE
YEN RALLIES AGAINST ALL MAJOR CURRENCIES ... In the middle of Tuesday's global selloff, I showed bond prices rising as stocks were selling off. I mentioned that falling U.S. yields were hurting the U.S. Dollar, especially against the Japanese yen which had rallied to a new six-... READ MORE
STOCKS FIRM AFTER BIG DECLINE... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor A day after the biggest decline in years, the S&P 500 ETF (SPY), Nasdaq 100 ETF (QQQQ) and Russell 2000 ETF (IWM) firmed on Wednesday. SPY... READ MORE
VOLATILITY INDEX SURGES ON PUT BUYING ... When investors get nervous about the stock market, they buy puts. That negative sentiment is reflected in rising volatility indexes. And the two most closely watched volatility indexes soared today as the market fell heavily. Chart 1 shows the CBOE Volatility (VIX) Index soaring... READ MORE
CHINA PLUNGE PUNISHES EMERGING MARKETS ... A 9% plunge in the Chinese stock market has caused a global stock selloff and a continuing shift to the safety of Treasury bonds. Chart 1 shows Chinese iShares (FXI) gapping down below its 50-day moving average on very heavy volume. The day'... READ MORE
MORGAN STANLEY IS LATEST CASUALTY ... On Friday I wrote about selling in brokerage stocks and showed chart breakdowns in Lehman Brothers and Merrill Lynch. The brokerage group was today's weakest industry, and the biggest percentage loser in the group was Morgan Stanley. The daily bars in Chart 1... READ MORE
MORTGAGE CONCERNS WEAKEN HOUSING SECTOR ... On February 12, I showed a chart of Countrywide Financial starting to break down on rising volume. It's fallen even further since then and is now threatening its 200 day moving average (Chart 1). I took its earlier weakness as a sign that... READ MORE
SILVER EXCEEDED SPRING PEAK MONTHS AGO ... Precious metals surged to new nine-month highs on Wednesday on heavy volume. Although a lot has been made about the fact that gold was testing its spring high (which it broke yesterday), the fact is that silver exceeded that chart barrier in late... READ MORE
TECHS AND SMALL-CAPS HOLD UP... Today's Market Message was written by Arthur Hill. John Murphy will be back tomorrow. - Editor The market ended mixed on Wednesday. The S&P 500 and Dow edged lower, but the Nasdaq and Russell 2000 closed slightly higher. Techs and small-... READ MORE
IT STARTS WITH FALLING BOND YIELDS... The main feature of the week was a falling dollar, which was the result of falling bond yields. Chart 1 shows the 10-year T-note yield trading at the lowest level in a month. Falling U.S. rates weaken the dollar. Chart 2... READ MORE
WEEKLY WRAPUP ... The market shrugged off some bad news on Friday from Microsoft and the housing sector to end either flat or modestly higher. That's actually a pretty good performance. Bond yields and the dollar continued to weaken which boosted commodities (especially gold and oil) and foreign ETFs.... READ MORE
BUDWEISER TESTS RECORD HIGHS ... Brewers have become consumer staple leaders. Last Friday I showed Molson Coors (TAP) breaking out to a new high (Chart 1). The beer stock is up 5% today and is the strongest stock in the Consumer Staples SPDR (XLP). Right behind it is Anheuser Busch (BUD)... READ MORE
We have been very bullish the equity market for months and we continue to be. But one wild card has been the semiconductors. In order to truly sustain a nice market rally, we felt the semiconductors would need to participate. Well, we've been waiting...and waiting...and waiting.... READ MORE
The Russell 2000 iShares (IWM) broke consolidation resistance this month and two key volume-based indicators point to strong buying pressure. The first chart shows the Russell 2000 iShares (IWM) and volume. The ETF surged from mid August to mid November and then consolidated for 10 weeks. This consolidation represents... READ MORE
In my 2/16/2007 article, Cash Flow Shows Wall of Worry, I asserted that the dearth of bullish Rydex cash flow was a sign that the rally would probably continue because the bulls were still not committing in a big way. For the sake of variety I try not... READ MORE
The technology rally from July-to-present has occurred without the participation of the Semiconductor Index ($SOX). We find this rather "odd" to be sure, for one of the basic tenets of any broader market rally were that they were led in general by the technology sector, and... READ MORE
Someone, we honestly don't know who exactly, sent us the following feedback earlier this week. It completely blew us away: "I'm astonished at how customer friendly your service, website, and daily charts are. Thank you, thank you, thank you. This is my first day with... READ MORE
Just when it seemed like inflation was on the wane, another rally in commodity markets suggests just the opposite. [This week's unexpected jump in the core CPI also caught the market's attention]. Chart 1 shows the DB Commodities Tracking Fund (DBC) challenging its late November peak... READ MORE
Mary W. writes "I'd like to see how much above or below the 200-day moving average a stock currently is. Does your charting system show that?" While we don't have a specific indicator for "Percentage above/below the Moving Average", clever... READ MORE