LOOKING FOR 62% RETRACEMENT AT 1250 ... With the S&P 500 having broken out of its recent trading range, and trading at the highest level in more than three years, it's time to revisit my earlier Elliott wave interpretation and came up with some possible upside price... READ MORE
We are super busy preparing the new release of our SharpCharts2 charting engine (see the "Site News" section below for more details). That means I haven't been paying much attention to the market recently. Fortunately, John, Carl, Richard, and Arthur have been, so let's... READ MORE
LOOKING FOR 62% RETRACEMENT AT 1250 ... With the S&P 500 having broken out of its recent trading range, and trading at the highest level in more than three years, it's time to revisit my earlier Elliott wave interpretation and came up with some possible upside price... READ MORE
BOND BUYING PULLS YIELDS LOWER... This morning's strong job report is having a positive impact on both bonds and stocks. The bullish impact on stocks isn't surprising. The impact on bonds may be. Bond traders are encouraged by the absence of upward wage pressure which helps... READ MORE
BUT CLOSES IN LOWER END OF DAY'S RANGE ... The price of crude rose all the way to $55, resulting in a test of its all-time high reached last October. After climbing more than $2.00 intra-day, however, it settled up only .52 cents and in the... READ MORE
CRUDE NEARS $55 TARGET ... Yesterday's spike in crude oil pushed it to $53 for the first time since last October. That puts the price of this key commodity within a couple of dollars of the top its recent trading range. That will be an important test for a... READ MORE
OIL SERVICE STOCKS STARTING TO CORRECT... Earlier today I wrote about an overbought energy sector that was starting to experience some profit-taking. Oil service stocks were the day's weakest group. Although that group is also overbought, there's another longer-range technical reason why oil service... READ MORE
ENERGY OVERBOUGHT AND PULLING BACK ... After a spectacular run since the start of January, the energy sector is finally succumbing to some profit-taking after trading in overbought territory for nearly a month. Yesterday's high volume drop -- followed by today's selling -- suggest that the rally is... READ MORE
BIOTECH INDEX LOSES 6% ... Biotech stocks were the hardest hit today in a falling market. Chart 1 shows the Biotechnology Index (BTK) falling to a four-month low today and closing well below its 200-day moving average. Its relative strength line has fallen to the lowest level in a... READ MORE
JAPANESE YEN JUMPS AGAINST OTHER CURRENCIES... On Monday, February 14 I wrote an optimistic article on Japan entitled "Land of the Rising Sun, The Rising Yen, and Maybe Even a Rising Stock Market" (February 14, 2005). I'm revisiting that bullish story today because the Japanese yen... READ MORE
UTILITIES PAY DIVIDENDS ... Earlier in the week I showed utility stocks selling off in reaction to a jump in interest rates. That was due to the fact that utilities are rate-sensitive. At the same time, it's important to recognize that utilities are also considered to be a... READ MORE
SEMICONDUCTOR HOLDERS BOUNCE OFF 200-DAY LINE... In a reversal of roles, the semiconductor group has moved from one of the weakest parts of technology to one of the strongest. While Internet and networking stocks have been helping to pull the Nasdaq market lower, the chips are finally lending some... READ MORE
ENERGY PRICES AREN'T REALLY DROPPING ... The news media made a lot out of the relatively small gain of 0.1% in the January CPI number. A lot of financial headlines claimed that showed that inflation fears were overblown. I don't think so. That's because... READ MORE
FINANCIALS AND REITS DROP FURTHER... Last Friday I wrote about how the buildup of inflation pressures -- and the threat of rising long-term rates -- were combining to cause loss of market leadership in the financials and REITs. That negative trend continued today as both groups were among the day'... READ MORE
DOLLAR PLUNGES ON KOREAN SELLING ... This morning I wrote about heavy selling in the U.S. dollar on the South Korean central bank's announced intention to diversify its currency holdings out of U.S. dollars and into other foreign currencies. Virtually all foreign currencies jumped on that news... READ MORE
EURO AND YEN SURGE AGAINST THE DOLLAR ... The dollar is falling heavily today against most of the world's currency markets. Although the dollar rally had already ended a couple of weeks ago, today's heavy dollar selling came from the Bank of Korea's announcement that... READ MORE
The S&P 500 remains in bull mode and continues to outperform the Nasdaq 100. In Elliott terms, the index has taken on a 5-Wave structure since mid August. Wave 1 extends up to 1142, Wave 2 declined to 1090, Wave 3 advanced to 1218 and Wave 4... READ MORE
Investors love the Apple (AAPL) "story" and they are driving he stock's price into a vertical ascent. When a stock arcs into an ever-increasing angle of ascent it is called a parabolic rise. "Investors" get into a feeding frenzy, causing the price rise... READ MORE
At the New York Expo last weekend, Martin Pring made the case that the battle between the forces of deflation and inflation had reached a critical inflection point. In other words, his charts showed that the deflation/inflation scale was about ready to tip in one direction. He arrived at... READ MORE
2005 is well underway now and some important technical trends are developing on the year-to-date charts. As you can see on this PerfChart, since the start of the year, the energy-heavy AMEX index has outperformed the other benchmarks significantly. The Dow, the NYSE, and the Large-Caps... READ MORE
REVIEW OF ELLIOTT WAVES... This is as good a time as any to review what I've been writing since the start of the year, and to clarify what advice I've been giving. Rather than repeat everything here, I invite you to review the headlines of my... READ MORE
NASDAQ 100 DROPS ON HIGHER VOLUME... The Nasdaq 100 had a bad chart day. It was the biggest percentage loser of the major stock indexes. And it fell on rising volume. That's bad for two reasons. It continues the pullback from its 50-day moving average -- thereby preventing... READ MORE
RELATIVE STRENGTH ALONE ISN'T ENOUGH ... I place a lot of importance on relative strength. As a rule, I generally recommend market groups -- or individual stocks -- that are showing relative strength. In other words, they're outperforming the S&P 500. But relative strength by itself isn&... READ MORE
MOVING AVERAGE LINES... I received some questions on the moving average lines that I used yesterday while doing a ratio analysis of the Nasdaq 100 to the S&P 500. I've also been asked to show how to create the ratio lines. One way is shown in... READ MORE
DOW DIAMONDS NEAR OLD HIGH ... Chart 1 shows the Dow Diamonds nearing a test of their late December high. What remains suspicious is the absence of volume. If you look at the green volume bars since this rally began at the start of February, you'll see that they&... READ MORE
MATERIALS SELECT SPDR IS BREAKING OUT... With commodity prices on the rise again, the Materials Select Sector SPDR (XLB) is attempting a bullish breakout today. Chart 1 shows the XLB trading over its fourth quarter high near 30. Its relative strength line has been rising for the past three weeks.... READ MORE
YEN JUMPS ON JAPAN TRADE SURPLUS... Last week I wrote about an overbought U.S. dollar running into resistance near 85 and starting to weaken. I showed that an oversold Canadian Dollar and Euro were starting to bounce (along with gold and gold shares). Today's focus is on... READ MORE
SEMIS GAIN OVER 3%... Last Friday I wrote about new signs of strength in the semiconductor group. I also wrote that buying in that group -- if it continued -- would be supportive to the technology sector and the market in general. That's because rising chip stocks help the Nasdaq... READ MORE
CRB INDEX CLIMBS BACK OVER 50-DAY LINE... Earlier today I wrote about new selling in the U.S. dollar which gave a boost to gold and oil. In fact, fourteen out of seventeen commodity markets rose today and pushed the CRB Index up 4.39 points. As Chart 1... READ MORE
GOLD ETF BOUNCES ON VOLUME ... The Gold Trust Shares (GLD) are bouncing impressively today off their 200-day moving average. And they're doing so on very strong volume. Chart 1 shows that today's up volume is the heaviest in more than two months. The daily oscillators... READ MORE
TEN-YEAR T-NOTE YIELD FALLS UNDER 4% ... My article yesterday on the yield curve talked about some reasons why falling long-term rates might not be a good thing for the stock market or the economy. For one thing, falling bond yields hint at a weaker economy. For another,... READ MORE
WHAT DOES IT MEAN? ... Earlier this afternoon I did an interview with Ron Insana on CNBC. Our discussion was about the recent drop in long-term bond yields -- and the implications of the flattening yield curve. I thought I'd elaborate on the subject since it's not... READ MORE
To understand the Nasdaq and Nasdaq 100, it is important to look at the individual parts. These two indices can be broken down into four key industry groups: semiconductors (SMH), networking (IGN), software (SWH) and internet (HHH). While retail, telecom, hardware, biotech and other industry groups certainly play a part,... READ MORE
The Decennial Pattern refers to the fact that years ending in the number five (5) are up years for the stock market. This is not just a statistical tendency. In fact, this has been the case for every year ending in 5 since 1885. Furthermore, the price low for these... READ MORE
Last week's market rally was impressive to be sure. Now, the question whether the decline off the early January highs are in fact intermediate-higher or more short-term in nature. Previously, we postulated the monthly key reversals' in the major indices put them in a position... READ MORE
A "Beta" release is a preview / testing version of a new piece of software. We've received great feedback from our users about our previous four Beta versions of our new SharpCharts 2 charts. Now it's your turn. Check out the latest Beta version and... READ MORE
DOW AND S&P 500 CLEAR RESISTANCE BARRIER... The hourly bars for the Dow Diamonds and the S&P 500 SPDR show both having cleared initial resistance at their mid-January highs. [Both also closed back over their 50-day moving averages]. Small cap indexes accomplished that earlier... READ MORE
As you may have noticed, once again we are able to send out the newsletter in HTML format thanks to the good people at ConstantContact.com. We hope you enjoy the convenience of having the entire newsletter in your inbox rather than having to click a link to see it.... READ MORE
SEMICONDUCTOR HOLDERS LEAD TECH RALLY ... For the first time in awhile, technology was the market's top sector. Most of that came from a strong semiconductor group which gained well over 4% in Friday trading. The top sector ETF was the Semiconductor Holders (SMH) shown in Chart 1. It... READ MORE
SEMICONDUCTOR HOLDERS LEAD FRIDAY BOUNCE... The February market rally is drawing strength today from the semiconductor group. Chart 1 shows the Semiconductor Holders (SMH) trading at the highest level in a month and challenging its 50-day moving average. Its relative strength also carries some good news for the group... READ MORE