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GREENSPAN SPEECH PUSHES DOLLAR TO FOUR-YEAR LOW AGAINST THE YEN -- THAT'S BOOSTING GOLD AND GOLD STOCKS -- JUMP IN OIL AND BOND YIELDS CAUSE PROFIT-TAKING IN STOCKS
by John Murphy,
Chief Technical Analyst, StockCharts.com
DOLLAR PLUNGES AGAINST THE YEN ... In a speech today, Mr. Greenspan expressed concern that foreign investors might tire of financing the big U.S. trade deficit unless they were rewarded with higher interest rates. He also showed no enthusiasm for stopping the dollar slide which is accelerating to the downside....
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OIL SECTOR NEARS UPSIDE BREAKOUT -- DUPONT PLAYS CATCH UP WITH CHEMICAL RALLY -- APPLIED MATERIALS UPSIDE TURNAROUND HELPS PUT SOX OVER 200-DAY LINE -- NASDAQ 100 HITS NEW HIGH -- WEEKLY CHART SHOWS FIFTH WAVE TARGET
by John Murphy,
Chief Technical Analyst, StockCharts.com
ENERGY SECTOR IS RISING AFTER ALL ... With crude oil trying to stabilize in the $46-47 dollar range (and in an oversold condition), energy stocks are starting to climb again. In fact, Energy was the day's top market sector. Chart 1 shows the Energy Select Sector SPDR surviving...
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RISING SOX IS PULLING ASIA HIGHER -- YOU CAN BUY THE TAIWAN ETF OR TAIWAN SEMICONDUCTOR -- BUYING JAPANESE STOCKS AND THE YEN WITH ONE ETF -- GLOBAL RALLY IS GOOD FOR US
by John Murphy,
Chief Technical Analyst, StockCharts.com
SOX IS CHALLENGING 200-DAY LINE... A strong technology sector is leading the market into a broad-based rally today with the major stock indexes resuming their fourth quarter uptrends. Good news from Hewlett Packard and Kmart's purchase of Sears helped light the fuse. The strongest technology group,...
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PRODUCER INFLATION JUMPS SHARPLY -- THAT'S BAD FOR BONDS AND EVENTUALLY FOR STOCKS -- BUT GOOD FOR GOLD -- SIMILARITIES TO THE 1970'S
by John Murphy,
Chief Technical Analyst, StockCharts.com
PPI HITS 14-YEAR HIGH ... The latest Producer Price Index (PPI) report saw a shocking jump of 1.7%, which is the biggest monthly jump in fourteen years. Most of the gain came from rising food and energy prices, but it can't be ignored. That also puts producer...
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CHIPS AND NETWORKERS GAIN AS OIL LOSES -- THAT'S GOOD FOR THE MARKET -- FALLING OIL IS HELPING THE JAPANESE MARKET
by John Murphy,
Chief Technical Analyst, StockCharts.com
SEMICONDUCTOR HOLDERS REACH FOUR-MONTH HIGH... The chip groups continues to creep higher. Today's buying put the Semiconductor Holders at the highest level since mid-July. Its relative strength line, which bottomed in early September, is creeping higher as well. Two of the day's top percentage...
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DELL BLASTS OFF -- NASDAQ BREAKS RESISTANCE -- GOOD MARKET LEADERSHIP -- MORE DOW P&F BUY SIGNALS -- AN OIL SERVICE BUY SIGNAL
by John Murphy,
Chief Technical Analyst, StockCharts.com
DELL DOES IT... The last time I wrote about Dell on October 6 I drew the same two lines shown in Chart 1 and identified them as a bullish "triangular" pattern. A flat upper line and a rising lower line is called an "ascending triangle" which...
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USING GOLD MUTUAL FUNDS -- POINT & FIGURE SIGNALS ON PRECIOUS METALS FUND -- A LOOK BACK AT GOLD BOTTOM IN MAY
by John Murphy,
Chief Technical Analyst, StockCharts.com
ANOTHER GOLD FUND... Earlier in the week, I wrote about a Canadian gold-mining ETF that's traded in Toronto (Chart 1). A number of readers messaged me about a closed-end gold fund traded on the American Stock Exchange. It's called the Central Fund of Canada...
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P&F CHARTS SHOW A LOT OF UPTRENDS -- HOW TO USE THEM FOR REPEAT SIGNALS AND STOPLOSS PLACEMENT -- OIL HASN'T TURNED UP YET
by John Murphy,
Chief Technical Analyst, StockCharts.com
S&P 500 SPDRS GIVE ANOTHER BUY SIGNAL ... Major stock averages achieved strong market gains with virtually all sectors and industry groups contributing. The only losers were gold and oil -- and their losses were relatively small. A sharp drop in oil prices, however, did give a market a big...
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REVISITING POINT & FIGURE BULLISH PERCENT CHARTS -- SOME RECENT BUYS -- AND SOME DOWNSIDE CORRECTIONS
by John Murphy,
Chief Technical Analyst, StockCharts.com
NASDAQ 100 AND S&P 500 ARE ON BUY SIGNALS ... A few weeks back I wrote an article explaining how to use point & figure Bullish Percent charts (October 21, 2004). The Bullish Percent Indexes that can be found on the Stockcharts Market Summary page are based on the...
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BOND YIELDS RISE AFTER FED TIGHTENING --YEN SELLING BOOSTS DOLLAR -- NASDAQ REMAINS STALLED -- CRUDE BOUNCES OFF TRENDLINE -- IT MAY BE TIME TO REENTER ENERGY SECTOR
by John Murphy,
Chief Technical Analyst, StockCharts.com
10-YEAR T-NOTE YIELD NEARS UPSIDE BREAKOUT ... On Monday I wrote about the possibility that long-term yields could be starting to rise again. After the Fed today raised short-term rates to 2%, long-term rates moved up as well. With short-term rates rising, a weaker dollar,...
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LOWER TRADE DEFICIT AND YEN SELLING BOOSTING DOLLAR -- GOLD STOCKS ARE PULLING BACK
by John Murphy,
Chief Technical Analyst, StockCharts.com
JAPANESE ARE SELLING THE YEN... The September US trade deficit showed an unexpected drop. While it's still very high, today's announcement is causing some buying of dollars and selling of foreign currencies. Chart 1 shows the Euro struggling to hold its recent move above the February...
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GE LEADS INDUSTRIALS ETF HIGHER -- MICROSOFT NEARS MAJOR BREAKOUT
by John Murphy,
Chief Technical Analyst, StockCharts.com
MICROSOFT TESTING TWO-YEAR HIGH ... Microsoft carries a lot of influence on the Dow and the Nasdaq because of its large size. That's why it's worth noting that the technology giant is on the verge of a major bullish breakout. Chart 1 shows MSFT moving up...
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MATERIALS ETF REACHES NEW HIGH AGAIN LED BY CHEMICALS, STEEL, AND GOLD
by John Murphy,
Chief Technical Analyst, StockCharts.com
CHEMICALS ARE LEADERS... The last time we looked at the Materials Select Sector SPDR it was just starting to bounce off its late September low and its 200-day moving average after having a bad October. Since then, the group has recovered and more. Chart 1 shows the XLB breaking...
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REVIEW OF RECENT MARKET TRENDS -- MARKET RALLY CONTINUES HELPED BY FALLING OIL -- FALLING DOLLAR BOOSTS GOLD AND FOREIGN MARKETS -- RETAILERS ARE MARKED UP -- RISING RATES ARE GOOD FOR STOCKS
by John Murphy,
Chief Technical Analyst, StockCharts.com
NO SURPRISES... I'm happy to see that the markets did pretty much what was expected while I was in Europe last week. Now that I'm back I thought I'd review some of the recent intermarket trends -- just to bring things up to date. Basically,...
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S&P 500 TAKES THE LEAD
For once, the S&P 500 is stronger than the Nasdaq 100 as the index has already broken above its 2004 high (1163). The overall pattern looks like an Elliott 5-Wave advance and the 2004 decline formed Wave 4. In addition, this decline looks like a falling flag...
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RELATIVE TO 52-WEEK HIGH/LOW (Rel to 52)
While it is widely reported when a stock is hitting a new 52-week high or low, I've always been curious as to where stocks are in relation to their 52-week range the rest of the time. To determine this I developed the "Rel to 52&...
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TOO EARLY FOR THE ALL CLEAR' BELL
Two weeks prior, a major bullish key reversal' higher developed in the S&P 500 Index; this led to Friday's new relative high. Given this, proper sector' positions are required to take full advantage of racing with the strongest'. In the past this meant...
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NEW ARTICLES IN CHARTSCHOOL, NEW BOOKS
IS THERE A GAP IN YOUR ANALYSIS? - A new article has been added to ChartSchool that covers the four main gaps and what they mean. Click Here to view the article. Give us feedback on what you think of this article about gaps. Other articles that have been added recently...
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Hello Fellow ChartWatchers!
Nothing helps the markets like a lack of uncertainty. With the election resolved quickly, a big relief rally got underway on Wall Street with the Materials, Energy and Consumer Staples sectors posting the biggest gains. Let's go to the charts:
Notice on the daily Dow chart above that...
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MURPHY'S TEN LAWS OF TECHNICAL TRADING
by John Murphy,
Chief Technical Analyst, StockCharts.com
HANG IN THERE - JOHN WILL BE BACK NEXT WEEK... John is currently in Europe speaking at two different conferences. He will be back next week. In the mean time...
A GOOD TIME FOR A REVIEW... I wanted to take this time to make sure that all of our Murphy members...
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I'LL BE IN EUROPE NEXT WEEK -- A REVIEW OF OCTOBER MESSAGES SUMMARIZES WHAT I'LL BE TALKING ABOUT THERE -- THE OUTLOOK FOR THE REST OF THE YEAR LOOKS GOOD
by John Murphy,
Chief Technical Analyst, StockCharts.com
MURPHY MARKET MESSAGES INDEX... I'll be in Europe next week to give a speech at the International Federation of Technical Analysts Conference in Madrid, Spain and make a couple of other speaking stops along the way. My main topic will be the same market trends and sector rotations...
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LOWER OIL AND HIGHER AIRLINES ARE GOOD FOR THE MARKET -- HIGHER CHINESE RATES HURTS COMMODITIES, BUT MIGHT NOT BE BAD FOR GOLD
by John Murphy,
Chief Technical Analyst, StockCharts.com
OIL VS. THE AIRLINES ... I've been asked a lot lately to explain why the transports continue to climb in the face of rising oil prices. Historically, the transports are adversely affected by higher energy costs. This time it has been different at least for some transportation stocks. Ironically,...
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BUYING INDUSTRIALS AND TRANSPORTS WITH ONE ETF -- GE, TYCO, AND EMR TURN UP -- USE MARKET SUMMARY PAGE TO SPOT INDEX LEADERS -- PLUNGE IN OIL HELPS LAUNCH YEAREND RALLY
by John Murphy,
Chief Technical Analyst, StockCharts.com
BUYING INDUSTRIALS AND TRANSPORTS WITH ONE TRADE... I've been writing a lot lately about the relationship between a strong transportation group and relatively weak industrial group. I wrote yesterday that I believed that the industrials were out of step with the transports (and utilities) and should start rising...
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FALLING OIL AND RISING TECHS ARE GOOD FOR MARKET -- SO IS TODAY'S BREAKOUT IN BROKERAGE STOCKS -- FOURTH QUARTER RALLY HAS BEGUN
by John Murphy,
Chief Technical Analyst, StockCharts.com
DROP IN OIL CAUSES SELLING IN ENERGY STOCKS ... I've written several times recently about two things that needed to happen to ignite the much-anticipated fourth quarter market rally. One was upside leadership by the technology sector, which we've already seen. The second was a drop...
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TRANSPORTS AND UTILITY STRENGTH MAY START PULLING INDUSTRIALS HIGHER -- THE DOW IS IN TRENDLINE SUPPORT AND IS DEEPLY OVERSOLD
by John Murphy,
Chief Technical Analyst, StockCharts.com
TWO OUT OF THREE ARE AT NEW HIGHS ... With the Dow Utilities jumping to a new 52-week high this week, I can't resist coming back to the glaring divergence between the three Dow Jones averages. Last Friday I wrote about the divergence between the strong transports and...
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AIG BOUNCE STEADIES THE DOW- BUYING LARGE-CAP VALUE -- DELTA LEADS AIRLINES HIGHER
by John Murphy,
Chief Technical Analyst, StockCharts.com
OVERSOLD AIG LEADING DOW HIGHER... I mentioned last evening that the Dow was in oversold territory and that it's drop looked overdone. It's getting some help today from American International Group which has been one of the Dow's weakest stocks owing to the recent...
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BROKERAGE UPGRADE HELPS CHIPS -- BIOTECHS FALL -- SMALLER STOCKS HOLD UP OK -- NASDAQ HOLDS 1900 SUPPORT -- DOW LOOKS OVERSOLD
by John Murphy,
Chief Technical Analyst, StockCharts.com
SOX STILL SHOWS DECENT RELATIVE STRENGTH ... A brokerage upgrade this morning gave a boost to the Semiconductor (SOX) Index and kept it in a position of relative strength. The chips stayed in the plus column all day even as the major market averages traded in the red. The SOX'...
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EURO AND GOLD TESTING 2004 HIGHS -- XAU/GOLD RATIO SUGGESTS HIGHER PRICES FOR BOTH -- WHY GOLD STOCKS ARE A BETTER BUY THAN OIL
by John Murphy,
Chief Technical Analyst, StockCharts.com
EURO AND GOLD ARE TESTING 2004 HIGHS... The Euro continues to surge against the dollar which is giving a big boost to gold and gold shares. Chart 1 shows the Euro right up against the high reached at the start of this year. The close correlation between the European unit...
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COMBINING P&F WITH BAR CHARTS -- DOW HITS NEW 2004 LOW -- TRANSPORTS LOOK OVERBOUGHT -- TECH SELLING PULLS NASDAQ LOWER
by John Murphy,
Chief Technical Analyst, StockCharts.com
DOW BREAKS SUMMER LOW... Since I started writing about point and figure charts yesterday, I thought I'd use them again today to give a fresh look at the major market averages. I'll explain a little more about their construction. At the same time, I'll...
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DOW THEORY REVISITED -- DOES THE CURRENT NON-CONFIRMATION MEAN ANYTHING?
by John Murphy,
Chief Technical Analyst, StockCharts.com
DOW THEORY REVISITED... Technical analysts are trying to figure out the meaning of the current divergence between the rising Dow Transports and the falling Dow Industrials. Which brings us to a discussion of Dow Theory. Dow Theory is built on the idea that the industrials (companies that make goods) and...
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ROTATION INTO TECH PICKS UP STEAM -- LED BY INTERNET AND SOFTWARE -- ALTERA PULLS SOX UP
by John Murphy,
Chief Technical Analyst, StockCharts.com
QQQ LEADERSHIP CONTINUES... Money coming out of some parts of the market continues to rotate into technology stocks. That's being seen in the relatively strong action of the Nasdaq 100 Shares (QQQ) which is the day's strongest index. Chart 1 shows the QQQ continuing to stay...
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POINT AND FIGURE BULLISH PERCENT CHARTS
by John Murphy,
Chief Technical Analyst, StockCharts.com
BPI BASED ON POINT & FIGURE BUY SIGNALS... Back on October 5 I wrote a piece on how to use the Energy Bullish Percent Index. I explained that the Bullish Percent Index (BPI) for any group is based on the percentage of stocks that are on point & figure buy...
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SELLING FINANCIALS AND BUYING CHIPS -- ROTATION IS THE NAME OF THE GAME
by John Murphy,
Chief Technical Analyst, StockCharts.com
FINANCIAL STOCKS CONTINUE TO TUMBLE ... Heavy selling that started in insurance stocks is spreading to the entire financial sector. Two of the day's biggest casualties are Countrywide Financial (Chart 1) and JP Morgan (Chart 2). CFC is trading under its August low and its 200-day moving average...
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DOLLAR, GOLD AND INTEREST RATES ARE LINKED -- ASIAN BUYING IS KEEPING US RATES LOW -- RISING EURO AND YEN ARE BULLISH FOR GOLD
by John Murphy,
Chief Technical Analyst, StockCharts.com
WHY LONG-TERM RATES AND THE DOLLAR ARE FALLING... In the normal intermarket course of events, a falling dollar produces higher commodity prices which in time pull long-term interest rates higher. There's no question that the major drop in the dollar since the start of 2002 has...
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IBM AND TXN BOUNCE NOT ENOUGH TO OFFSET PLUNGE IN MATERIALS AND HEALTH INSURERS
by John Murphy,
Chief Technical Analyst, StockCharts.com
IBM AND TXN LEAD TECH BOUNCE... First the good news. Positive reports from IBM and Texas Instruments are pushing both stocks higher and are giving a boost to the technology sector and semiconductors in particular. Chart 1 shows Big Blue gapping up to a new four-month high on rising...
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DROP IN OIL BOOSTS MARKET -- BIOTECHS AND SOFTWARE PULL QQQ OVER 200-DAY LINE -- CHECK POINT AND MEDIMMUNE ARE STANDOUTS -- DOW SCORES UPSIDE REVERSAL
by John Murphy,
Chief Technical Analyst, StockCharts.com
OIL SERVICE HOLDERS ARE WEAKEST GROUP ... The rotation out of energy stocks that started last week is continuing. Energy was the day's weakest sector. Oil service was energy's weakest group. Chart 1 shows the Oil Service Holders backing off from new resistance at its (green) 20-...
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SOFTWARE GROUP SHOWING TECH LEADERSHIP -- MSFT, CA, ORACLE, AND ADOBE ARE LEADERS
by John Murphy,
Chief Technical Analyst, StockCharts.com
SOFTWARE HOLDERS SHOW TECH LEADERSHIP... I've written several times about some new signs of market leadership coming from the technology sector. I've mentioned Internet stocks as an example of a group that is trying to lead the Nasdaq market higher. Software stocks qualify as another technology...
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ENERGY STOCKS NOT CONFIRMING OIL HIGH -- PAPERS WEIGHING ON MATERIALS -- MMM HURTS DOW -- S&P 500 TESTING LATE-SEPTEMBER LOW
by John Murphy,
Chief Technical Analyst, StockCharts.com
MMM LEADS DOW LOWER... Although all the major averages are starting the week on the downside, the Dow is the biggest percentage loser. That's mainly due to today's chart breakdown in MMM. Chart 1 shows the big Dow stock falling under its spring low this morning...
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NASDAQ MONTHLY
Monthly charts are good for perspective and some projections. First, you can see that both volume and the index steadily advanced from 1991 to 2000. Volume has leveled out over the last 4-5 years, while the index suffered a sharp decline to 1108. The recovery over the last two...
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THE SPX/VIX RATIO
An indicator that has recently become quite popular is the SPX/VIX Ratio. I have tried to convince two of its proponents that it is a calculation that makes no sense, but to no avail. Nevertheless, I will present my argument here for your assessment.
Ratio calculations are most commonly...
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