GASOLINE TESTS YEARLY HIGH ... One of the things the Fed will most likely be looking at today and tomorrow is the price of oil, gasoline, and most other commodities. They'll do that to get some clue as the future direction of inflation (and the economy). They won'... READ MORE
MARKET ON FED WATCH ... Very little has changed over the last few trading days. The market has been attempting a modest price bounce to work off a short-term oversold condition. Major market averages (with the exception of the Dow) have been unable to regain their 200-day moving averages. The fact... READ MORE
SHORT-TERM TREND STRENGTHENS ... The market is ending the week on a firm note. That's largely due to a short-term oversold condition and improvement in short-term market indicators. Chart 1 shows the daily MACD lines turning positive on the S&P 500 for the first time in a... READ MORE
NEW HIGH FOR YIELDS ... The yield on the 10-year Treasury Note touched a new four-year high today. The weekly bars in Chart 1 show that the uptrend in long-term interest rates began exactly a year ago. The fact that bond yields were headed higher was confirmed in the spring of... READ MORE
MORGAN STANLEY LEADS BROKERS HIGHER ... Strong second quarter earnings by Morgan Stanley has pushed the brokerage stock up nearly 5% today and is leading a rally in that group and the market in general. Chart 1 shows the stock gapping back over its 200-day moving average on rising volume. Chart... READ MORE
CONSUMER STAPLES ARE DAY'S TOP SECTOR... With today's stock market rally fading again, investors continued to favor the defensive qualities of consumer staples. That made consumer staples the day's top sector. That's nothing new. Chart 1 shows the Consumer Staples Sector SPDR... READ MORE
TELECOM HOLDERS ARE HAVING A GOOD YEAR ... With the market selloff that started in May, a lot of defensive groups have attracted new money -- including consumer staples and utilities. The telecommunications group belongs on that list. Chart 1 shows why. Telecom Holders (TTH) have been one of the top... READ MORE
BULLISH PERCENT INDEX SUGGESTS A BEAR ... The most difficult thing to determine in market analysis is the difference between a market correction and the start of a bear market. They look pretty much the same. Prices fall to an area of chart support (usually around the 200-day moving average), get... READ MORE
BOND PRICES ARE FALLING AGAIN ... For the second day in a row, core inflation numbers came in higher than economists were expecting. Yesterday it was the PPI. Today's core CPI reading for May rose to 0.3%. [The actual CPI rose .4% during May]. Core inflation (excluding food... READ MORE
LEHMAN BREAKS 200-DAY AVERAGE ... We've been showing a lot of markets threatening or breaking their 200-day moving averages lately. Here's another one. Despite a 47% jump in second quarter earnings, Lehman Brothers has fallen 4% and, in so doing, has broken its 200-day moving average. That&... READ MORE
NYSE STILL SITTING ON 200-DAY LINE ... Friday's market action didn't tell us much about the staying power of Thursday's afternoon bounce. Market averages closed modestly lower in lighter trading volume. The good news is that the NYSE Composite Index remains on top of its... READ MORE
DOW AND NYSE INDEXES CLOSE ABOVE 200-DAY LINES ... An afternoon comeback avoided a serious market breakdown. Chart 1 shows the Dow Industrials closing 8 points higher after heavy losses this morning. More importantly, the Dow closed on top of its 200-day moving average. Chart 2 shows the NYSE Composite Index... READ MORE
GLOBAL BREAKDOWN... Rate hikes by central bankers in Europe and Asia (and more hawkish comments from Fed officials) have pushed most global stocks below their 200-day moving averages. Among the hardest hit are emerging markets like Latin America which are tied to commodity prices which are also falling. Chart 1... READ MORE
BEAR FUNDS ARE STILL RISING... A number of readers have asked for an update on a couple of bear funds that I recommended in mid-May. As you might expect, they've been rising as the market has been falling. Chart 1 shows the ProFunds Short OTC Fund (plotted through... READ MORE
FIRMER DOLLAR PUSHES COMMODITIES LOWER... Although commodities have been the strongest asset class since 2002, and while they remain in a major uptrend, they're not immune to a downside correction. We may be seeing the start of one right now. One hint at that is the recent heavy... READ MORE
HOUSING INDEX HITS NEW 52-WEEK LOW ... More bad news on the housing front pushed the PHLX Housing Index to the lowest level in eighteen months. The weekly bars in Chart 1 leave little doubt that housing stocks have peaked. The recent breaking of the late 2005 lows has left a... READ MORE
CRB INDEX STAYS OVER 50-DAY LINE ... The Reuters/Jefferies CRB Index jumped seven points today to close at 350. As Chart 1 shows, that keeps the CRB above its 50-day moving average. Chart 1 also shows that very little damage has been done to the commodity uptrend. While most of... READ MORE
THE DOW IS BACKING OFF FROM 2000 PEAK ... Whenever the market is at an important inflection point, it's usually a good idea to take another look at long-term charts. Not that short-term trends aren't important. But longer-term trends are more important. That's why I... READ MORE
VIX CONTINUES TO CLIMB ... We've produced a number of articles recently showing the CBOE Volatility (VIX) Index climbing to a new two-year high and warned about the danger that poses for the stock market. That's because the market usually trends in the opposite direction of the... READ MORE
SO FAR SO GOOD... Global stock markets survived an important test this week. Almost everywhere we look in the world, we see major stock markets staying above or bouncing off their 200-day moving averages. The first three charts show some of the foreign markets doing the latter. Emerging markets in... READ MORE
CRB GIVES UP ALL OF YESTERDAY'S GAINS ... Yesterday's sharp jump in commodity prices didn't last for long. The CRB Index fell more than nine points today to give up all of yesterday's gains and more. Three of the biggest percentage losers were... READ MORE
COMMODITIES BACK OVER 50-DAY LINES ... Commodity markets are staging a comeback attempt today and the rally is pretty broad based. Fourteen of the nineteen commodity markets are in the black today. The biggest gainers are copper (+11%), silver (+5%), gasoline (2%) and gold (+2%). Chart 1 shows the Reuters/Jefferies... READ MORE
EMERGING MARKETS FALL WITH OTHER FORMER LEADERS... Last Monday I wrote about a number of sell signals that were being given in the market and in commodity-related stocks in particular. I wrote a paragraph entitled "Growing Aversion to Risk" in which I explained that former market leaders were... READ MORE
VIX HITS ONE-YEAR HIGH ... The market has something else to worry about. The CBOE Volatility (VIX) Index jumped to the highest level in a year. In so doing, it exceeded the previous peak hit in January and, at one point today, the peak hit last October. That's a... READ MORE
CORE CPI TOPS FORECASTS ... While the CPI numbers creep higher month after month, economists keep telling us there's really no inflation. It's all energy. There's no inflation anywhere else and not much threat of it picking up. Those of us who look ahead, however,... READ MORE
WITH MARIA ... I'm scheduled to be interviewed at approximately 4:05 pm (Eastern time) this afternoon by Maria Bartiromo on CNBC. If you tune in, you won't hear anything that you haven't already read on this site. Given the events of the past week,... READ MORE
CRB LOSES MORE THAN 2% ... It was just a matter of time until commodities entered a much-needed correction. And today is the day. The Reuters/Jefferies CRB Index fell over 8 points (-2.3%) as 16 of the 19 commodities experienced selloffs. Most of the biggest losers are in the... READ MORE
THIS IS LOGICAL SPOT FOR THE MARKET TO PEAK ... I've been writing a lot lately about the inflationary implications of the falling dollar, rising commodity prices, and rising interest rates. I've also been showing a number of negative divergences in market breadth indicators. It looks like... READ MORE
TOO MUCH FOCUS ON THE FED ... It seems to me there's way too much focus on what the Fed does or what it intends to do. Yesterday's Fed statement hinted at another rate hike in the offing. I suspect there will be several more after that.... READ MORE
GLOBAL FORCES MAY BE TAKING OVER ... Everyone's attention will be on what the Fed does tomorrow and what it says while it's doing it. The consensus view (encouraged by the new Fed chairman) seems to be for another quarter point rate hike to 5% after which... READ MORE
GOLD IN FOREIGN CURRENCIES ... One of our readers asked if the falling dollar is the only reason that gold is rising. The answer to that is most certainly no. Since gold is quoted in U.S. dollars, a falling dollar produces higher gold prices. That means that gold rises in... READ MORE
CRUDE FORMS SHORT-TERM TOP ... Crude oil prices fell sharply for the second day in a row. More importantly, today's drop of $2.68 puts it back below $70 for the first time in three weeks. That breaks the intra-day low hit last week and has left behind a... READ MORE
A HISTORICAL LOOK AT THE BPI... One of the themes that I keep coming back to is that the 2006 bull market advance into new multi-year highs isn't being confirmed by a lot of technical indicators that measure market breadth. I've written articles showing negative divergence... READ MORE
USING SAR IN FAST RISING MARKET ... Different market conditions require different indicators. Fortunately, Stockcharts offers a wide variety. What works in a trading range market doesn't work as well in a trending market. What works in a market that's trending gradually higher might not be suitable... READ MORE
SELL IN MAY AND GO AWAY?...NOT... He just couldn't leave well enough alone; there was the Dow Jones, enjoying a rally in today's session and then, Chairman Bernanke's comments were aired, minimizing the rally in gold, crude oil and a rise in interest... READ MORE
DIRECTIONAL SIGNALS ON MONTHLY CHART ... I'm going to devote this article to a demonstration of the usefulness of Bollinger Bands. But first an explanation of what they are. Developed by John Bollinger, the two bands are plotted two standard deviations above and below a middle line which is... READ MORE
CHINESE RATE HIKE WEAKENS COMMODITY MARKETS ... The Chinese central bank raised interest rates for the first time since October 2004. They did that to prevent the Chinese economy from overheating. One of the immediate reactions was a selloff in most commodity markets. It's no secret that China has... READ MORE
McCLELLAN SUMMATION INDEX ... Yesterday I showed some negative divergence starting to appear between the NYSE Advance-Decline line and the S&P 500. In response to another reader question, today I'm showing another measure of market breadth that's showing a more serious negative divergence. The indicator... READ MORE
FALLING GASOLINE PULLS XLE LOWER ... Earlier today I showed gasoline futures pulling back from overhead resistance at their summer highs. That caused profit-taking in energy shares. I also showed Exxon Mobil and ConocoPhillips pulling back from their September highs. Chart 1 shows the selling in the Energy SPDR (XLE). Although... READ MORE
THIS IS NORMAL SPOT TO EXPECT A PULLBACK ... Everyone is looking at the chart of crude oil. They should also be watching gasoline. That's because gasoline futures have reached their next upside target and are starting to pullback from the most overbought reading since last summer. That'... READ MORE