John is taking a well-deserved break this week. Watch for updates from other respected StockCharts commentators during John's absence. SHARPCHARTS 2 BETA 7 PROGRESS REPORT - While it might seem we have not been making advances on this new service, behind the scene, we have greatly enhanced our... READ MORE
The market's short-term picture continues to weaken. Yesterday I wrote about the MACD lines for the S&P 500 being on the verge of turning negative. They did that today for the S&P and several other major market averages. That signals the start of... READ MORE
Having cracked the 10,600 resistance level, the Dow immediately ran into problems at 10,700 and then Friday's session ended in a disappointing close back below 10,600. Volume has remained relatively light. All in all, a picture of a directionless market during the summer doldrums. But... READ MORE
S&P CONTINUES TO WEAKEN -- MACD TURNS DOWN ... The market's short-term picture continues to weaken. Yesterday I wrote about the MACD lines for the S&P 500 being on the verge of turning negative. They did that today for the S&P and several... READ MORE
STRONG JOBS REPORT PUSHES YIELDS HIGHER... A surprisingly strong July jobs report (with wages rising at the fastest pace in a year) have pushed bond prices sharply lower today and bond yields higher. Chart 1 shows the 10-year T-note yield jumping close to 4.40% which is the... READ MORE
WHY THE S&P 500 LOOKS OVERBOUGHT... Short-term indicators point to an overbought market. The 9-day RSI has been weakening from overbought territory over 70 on the S&P 500. That's creating a short-term negative divergence. The latest peak in the MACD lines... READ MORE
RETAILERS FALL ON VOLUME... Today's weak performance by retailers is causing some nervous selling in an overbought market. Disappointing July retail sales have made the group one of the day's weakest performers. Some of today's selling may also be the result of some chart... READ MORE
EURO BOTTOM BOOSTS GOLD... On Monday I wrote about the likelihood that the Euro (and other major foreign currencies) were bottoming against the Dollar Index which had stalled at major resistance near 90 (August 01, 2005). That trend is accelerating today. Chart 1 shows the Euro climbing to the highest... READ MORE
COMMODITY STOCKS RALLY ... The recent upturn in commodity markets is igniting new interest in commodity-related stocks. Outside of energy, which remains very strong, other commodity stocks that had a strong day were aluminum, copper, gold, and steel. Yesterday I showed the CRB Index rising to a new five-month... READ MORE
DOLLAR IS STALLING NEAR 90... Not too long ago I wrote about the U.S. Dollar Index having reached a major resistance zone ranging from 90 to 92. Those were the peaks hit during the first half of 2004. I also wrote about the dollar being in a major overbought... READ MORE
RAILS LEAD TRANSPORTS HIGHER ... A week ago the Dow Transports broke resistance at their June highs to turn their trend higher. I pointed out at the time that that was a positive turn for the market. The transports had another strong day today. What I found even more encouraging was... READ MORE
SPRINT REACHES FIVE-YEAR HIGH ... Sprint is the day's biggest percentage gainer in the telecom group. The daily bars in Chart 1 show FON surging to a new 52-week high on rising volume. The monthly bars in Chart 2 show the telecom leader reaching a new five-... READ MORE
TELECOM HOLDERS BREAK 200-DAY LINE ... Normally I focus my attention on market groups that are showing market leadership. I look for market sectors or industry groups that rank highest in the weekly and monthly relative strength rankings and that have strong looking chart patterns. Today's story is... READ MORE
BOND YIELDS HAVE FLATTENED OUT ... Bond yields have been dropping since the early 1980's when the inflationary bubble of the 1970's ended. Chart 1 shows that portion of the drop in bond yields that started in early 2000. That drop was largely due to deflationary forces... READ MORE
FINANCIAL ETF UP AGAINST RESISTANCE ... Earlier today I showed the Nasdaq Composite testing overhead resistance formed at the start of the year and in an overbought condition. I suggested that might be enough to cause some profit-taking. Financial stocks are in a somewhat similar situation. Chart 1 shows that... READ MORE
AN IMPORTANT TEST ... The Nasdaq Composite Index is undergoing an important test of overhead chart resistance. And it's doing so in an overbought condition. That's an important test not only for the Nasdaq but the rest of the market as well. Chart 1 shows the Nasdaq... READ MORE
MARKETS FOLLOW REVALUATION SCRIPT... Over the last year I've written several articles on the possible implications of a revaluation of the yuan by the Chinese. [Type "yuan" in search box under archived market messages]. An April 22 piece was headlined: "Why a Higher Yuan Might... READ MORE
INDUSTRIALS CONFIRM TRANSPORT BREAKOUT... Earlier today I showed the Dow Transports breaking through their June high. The Dow Industrials completed a bullish breakout of their own by day's end. That puts both Dow Averages in intermediate uptrends. The stock that contributed the most to the Dow's... READ MORE
DOW TRANSPORTS HIT FOUR-MONTH HIGH ... The Dow Transports have finally broken through chart resistance at their early June high. Chart 2 shows the Dow Industrials trading just above their June high and on the verge of a similar breakout. As I suggested last week, a decisive close through that... READ MORE
NASDAQ HITS NEW RECOVERY HIGH ... The Nasdaq market hit a new recovery high today and had the biggest percentage gain of the major market indexes. Chart 1 shows the Nasdaq Composite closing at 2173 which puts it within 20 points of its early 2005 high at 2191. That will be... READ MORE
MARKET BOTTOMS EVERY FOUR YEARS ... I made brief mention of the four-year presidential cycle last week. Since it plays a important part of my overall stock market view, I thought it needed a more thorough explanation. The presidential cycle is the four-year cycle that repeats itself over and... READ MORE
January and 2005 have not been good for the bulls. After a strong finish in 2004, stocks were hit with strong selling pressure to begin the year and have yet to recover. A look into November and December reveals early weakness in two key groups. More importantly, traders can turn... READ MORE
The Equity and OEX Put/Call Ratios generally signal overbought and oversold conditions that help identify price tops and bottoms; however, sometimes the OEX Put/Call Ratio will invert relative to the Equity Put/Call Ratio. At these times the inversion signals the opposite of what we would normally expect.... READ MORE
The January decline to date is gaining in importance; if prices remain at current to lower levels through the next six trading sessions - then a bearish 'key reversal month' will form. This would signal 'exhaustion' of the uptrend, with any and all rallies considered selling opportunities.... READ MORE
A few weeks back I wrote about the close linkage between the Dow Transports and Industrials. At the time, both were threatening their spring lows. Now both are testing their June highs (see first chart). A Dow close through that barrier (combined with a similar upside breakout in the Transports)... READ MORE
The market battled back impressively over the past week and a half and is re-testing the 10,600 resistance level that gave it so much trouble in mid-June (and May and late March). With the CMF poised to move into positive territory, the PPO already positive, and the... READ MORE
BIG DROP IN CRUDE CAUSES SELLING IN OIL PATCH ... A $2.00 drop in crude oil to below $58 caused some heavy profit-taking in energy shares which were the day's weakest sector. Charts 1 and 2 show the Energy Sector SPDR (XLE) and the Oil Service Holders... READ MORE
MARKET IS STILL IN A TRADING RANGE ... In a number of this year's market messages I've described the stock market as being in a trading range. [A "trading range" is a sideways market]. I have allowed for the possibility of "marginal" new... READ MORE
GROUP LEADERS FOR THE LAST MONTH ... The performance bars in Chart 1 show the group leaders over the last month. While some of them are old leaders from the first half of 2005 (energy, housing & real estate, and utilities), there are some new leaders emerging. Among them are brokers,... READ MORE
OVERSOLD EURO BOUNCES OFF CHART SUPPORT... Last week I showed the U.S. Dollar Index having reached an overhead resistance zone along the 2004 highs (90-92) while in an overbought condition. The Euro is a mirror image of the Dollar Index. The weekly bars in Chart 1 show the... READ MORE
SOX IS CHALLENGING PREVIOUS PEAKS ... Last Friday the Nasdaq Composite Index broke through 2100 for the first time this year and started to show better relative strength. Technology leadership is normally good for the rest of the market. That's why today's strong action by the semiconductors... READ MORE
DOW AND S&P TURN UP... After describing yesterday's upside reversal day last evening, I wrote that we needed to see some upside follow-through. We certainly got that today. All market sectors closed in the black with the exception of energy. Crude oil fell over a... READ MORE
BRITAIN REGAINS LOST GROUND ... The purpose of this article is twofold. The first is to show that the British stock market (and Europe in general) has recovered from yesterday's early selloff. Chart 1 shows the London Financial Times Index (FTSE) through this morning. Yesterday's bomb attacks... READ MORE
BIOTECHS LEAD MARKET RALLY ... Biotechs are making a strong bid for market leadership. Thanks to a 52-week high by Amgen, biotechs were the day's top market group. Yesterday I showed the Biotech iShares (IBB) closing over their 200-day average for the first time since February. After... READ MORE
DON'T OVERREACT... This morning's news of bombings in London caused some initial panic selling in global markets. However, markets appear to be returning to more normal activity. In reality, there haven't been any serious market changes. Naturally, most of the overseas selling took place... READ MORE
ENERGY MARKETS HIT RECORD HIGHS... Crude oil closed above $61 today for the first time in history. Heating oil and gasoline futures prices also reached new records. While some of today's energy strength is due to hurricane activity, it demonstrates how little margin for error there is in... READ MORE
BIOTECH INDEX EXCEEDS 2004 HIGH... Chart 1 is an updated version of a similar chart that I showed on May 9 (May 09, 2005) which described the Biotechnology Index (BTK) as being in the latter stages of a bullish "symmetrical triangle". [A symmetrical triangle is identified by the... READ MORE
The Rydex Equal Weight S&P 500 Index (RSP) moved to a new all time high last week. Strangely enough, the Energy SPDR (XLE) moved to a new all time high two weeks ago. It is clear that Energy stocks have the best of both worlds: rising demand and... READ MORE
A good measure of market participation -- the number of stocks participating in upside price moves -- is the percentage of stocks above their 200-day moving average. DecisionPoint.com tracks this number on the major market indexes, and in this instance we are looking at this indicator for the S&... READ MORE
The MS Cyclical Index ($CYC) is quite interest rate sensitive; and thus prone to large corrections witness the past 7 year history of which there are two very distinct 30% corrections. Hence, given short-term rates are rising, we believe that the index is in the midst of another such... READ MORE