SMALL CAPS ARE STARTING TO SLIP ... One of the more subtle changes that took place this past week was slippage in small cap stocks. The slippage wasn't substantial; nor has there been any serious chart damage done. But it's something that bears watching. That's... READ MORE
S&P 500 CLIMBS BACK OVER 50-DAY LINE -- FOREIGN ETFS ARE EVEN STRONGER ... Chart 1 shows the S&P 500 climbing back over its 50-day moving average in afternoon trading. That's a positive sign and suggests that the short-term decline of the last... READ MORE
TELECOM HOLDERS HIT 52-WEEK HIGH ... Here's a group that I seldom write about. The reason I'm writing about it now is that it's the strongest group in the market over the last week. Chart 1 tells the tale. Telecom Holders (TTH) have broken... READ MORE
HOUSING INDEX BREAKS 200-DAY LINE ... A bad earnings report from Toll Brothers (which hit a new 52-week low) made a bad situation worse for the homebuilding group. The five homebuilders in the S&P 500 suffered losses averaging 3.5% on the day. Each of the stocks... READ MORE
NATURAL GAS INDEX STALLS AT PREVIOUS PEAK... Last Thursday I showed the Natural Gas Index (XNG) pulling back from its late-September peak and suggested that it was leading an energy pullback. With natural gas prices falling to a six-month low, and crude down to the lowest level in... READ MORE
XAU PULLS BACK FROM OLD HIGHS... Last Friday I issued a short-term warning on gold and gold stocks based primarily on Chart 1 which showed the Gold & Silver (XAU) Index up against major overhead resistance at its 1996 and 1987 highs near 155 (February 03, 2006). I suggested... READ MORE
EDITOR'S NOTE... Jeanette Schwarz Young contributed to this article. Ms. Young is a trader on the New York Board of Trade with special expertise on commodity markets. In the coming weeks, you can expect to see more joint articles from her and myself. - John Murphy IT'S... READ MORE
AMAZON AND GOOGLE FALL HARD... It wasn't hard to see where most of the damage in the Nasdaq 100 came from today and the past week. Two of the biggest weekly losers were Amazon.com (-15%) and Google (-12%). The ugly chart damage can be seen in Charts... READ MORE
XAU INDEX REACHES MAJOR RESISTANCE ... Earlier in the week I showed a chart of Newmont Mining trading over its 1996 high at 60. [It's since dipped back below that level]. Chart 1 shows a long-term chart of the Gold & Silver (XAU) Index. And therein lies a... READ MORE
RESPONSE TO QUESTIONS ... I've made several references to the strong performance of inflation-sensitive stocks. Apparently, there are a lot of readers who don't know what they are. Inflation-sensitive stocks are those that are tied to rising commodity prices. The most obvious are gold (precious... READ MORE
MARKET TURNS DEFENSIVE ... Two of the factors that have helped keep inflation under control are rising worker productivity and low labor costs. But that may now be changing. Fourth quarter worker productivity fell for the first time in five years. At the same time, labor costs rose for the first... READ MORE
U.S. STEEL NEARS RECORD HIGH... Stocks tied to basic materials continue to gain ground on the back of the ongoing commodity rally. The Materials Select SPDR (XLB) was the only sector ETF to hit a new 52-week high today while most others fell. One of the day'... READ MORE
MATERIALS ARE WEEK'S TOP SECTOR ... There's generally a pretty close correlation between the direction of commodity prices and basic material stocks that are tied to those commodities. I've suggested in the past that one way to participate in the commodity bull market is through... READ MORE
S&P HOLDS 50-DAY LINE ... As you know, I've been expecting the S&P 500 to fall below its 50-day average. It dipped beneath it yesterday intra-day before closing just above it. Today it bounced off it pretty impressively. While that doesn'... READ MORE
HOMEBUILDERS DRAG MARKET DOWN ... A weaker-than-expected report on home sales for the month of December is causing heavy selling in homebuilding stocks. That in turn is helping to pull down the rest of the market which is in a weak technical condition to begin with. From a charting... READ MORE
DOW AND NASDAQ ETFS ARE STILL BELOW 50-DAY LINES... The modest price bounce of the last two days has done little to reverse the downside momentum created by last week's high-volume price drop. For one thing, this week's bounce has been on relatively light... READ MORE
DOW DIAMONDS BREAK 50-DAY LINE AND DECEMBER LOW ... Thanks mainly to a huge plunge in Citigroup and General Electric, the Dow Industrials had a terrible chart day. Chart 1 shows the Dow Diamonds (DIA) shattering its 50-day moving average and falling to the lowest level in more than... READ MORE
DOW BREAKS 50-DAY LINE ... The Dow is the first of the major stock indexes to break its 50-day moving average. If that pattern continues through the balance of the day, it would be the first legitimate sell signal since last October. Although the Nasdaq and the S&... READ MORE
SOX CLIMBS 3.4% AND BOOSTS SMH ... Last evening I suggested that the ability of the Semiconductor (SOX) Index to end in positive territory after early selling was a positive sign. That positive tone has carried into today's trading in a big way. Thanks to good news from... READ MORE
INTEL IS BIGGEST STOCK IN THE SMH ... Today's plunge in Intel has been devastating to its chart pattern. Chart 1 shows the chip and technology bellwether plunging nearly 3 points (-12%) on very heavy volume. The stock is now threatening its fourth quarter low. That helped make the... READ MORE
CRUDE TOPS $65 -- XLE HITS RECORD HIGH ... Crude oil continues to climb after recently breaking through its mid-December peak at 62. That upside breakout signaled that the downside correction starting in early September had been completed and that its intermediate trend had turned higher. Rising crude prices are good... READ MORE
DOLLAR TREND CONTINUES TO WEAKEN ... The weekly chart of the U.S. Dollar Index shows that the 2005 rally stopped at the spring 2005 peak just above 92. At the same time, the weekly MACD lines have "double topped" and turned negative. The USD has also broken an... READ MORE
VIX AT LOWEST LEVEL IN A DECADE... Despite the market's getting off to a strong start in the new year, I've maintained a generally cautious view on the market's long-term trend. Part of that is based on the length of this bull market... READ MORE
ADVANCE-DECLINE LINE HITS NEW HIGH ... Back in December I expressed concern about the fact that the NYSE Advance-Decline line remained beneath its August/September highs which was creating a "negative divergence" with the NYSE and S&P 500 indexes which had broken through those highs... READ MORE
CONCENTRATING ON STRENGTH ... The market is starting the new year with a bang. Virtually all of the major market averages have risen to new 52-week highs. Some of that new optimism is the result of the Fed minutes released earlier in the week hinting that it might be close... READ MORE
TAIWAN AND SEMICONDUCTOR ISHARES ARE DAY'S LEADERS ... As you've probably figured out by now, I try to look for meaningful linkages behind the day's headlines and the movements in various markets. One such linkage is evident in today's trading. Domestically, the day&... READ MORE
DOLLAR WEEKLY CHART LOOKS TOPPY ... In writing about the drop in the U.S. dollar yesterday I mentioned that its weekly chart also looked toppy. I was referring to the chart that I showed back in mid-December accompanied by the headline: "Record Trade Deficit Weakens Dollar at Major... READ MORE
2:00 RELEASE BOOSTS MARKET ... The minutes of the Fed's December meeting carried wording that future rate hikes would probably not be large and that inflation pressures were well contained. That hint that the Fed might be near the end of their tightening campaign turned what had been... READ MORE
OIL CLIMBS OVER $63... Crude oil (and most other commodities) are starting the new year on a strong note. Crude oil is climbing more than $2 and is trading over $63 for the first time in more than two months. Gold is trading $11 higher while the CRB Index is... READ MORE
REPEATS OF EARLIER MESSAGES... Yesterday I presented a long-term bullish case for the gold market. Today I'm going to try to do the same for Japan. First of all, I have to remind some newer readers that my bullish attitude on Japan isn't new. I... READ MORE
LONG-TERM TREND NOW FAVORS GOLD ... I've written articles about why I'm a long-term bull on gold, but I thought it worth revisiting as we approach the end of the year. Gold is also my favorite stock group for the coming year. Chart 1 is... READ MORE
THERE MAY BE NO SANTA CLAUS THIS YEAR ... In case you're confused about what the traditional Santa Claus rally is, it's the tendency for the market to rise in the week between Christmas and New Years. Judging from today's selling in stocks, there'... READ MORE
JOHN'S LATEST PERFORMANCE CHART ... John's Latest Performance Chart ranks the best and worst groups over the last month. Basic materials, gold, and oil service stocks have benefited from firmer commodity prices. Other sector leaders include healthcare, utilities, and consumer staples. It's worth noting that... READ MORE
HEADED TOWARD LOWER BAND... The price of gold fell $7.85 today to close below $500 for the first time in a month. Chart 1 shows the recent chart action for the Gold Trust Shares (GLD). It closed at $49 today which is the equivalent of $490 for bullion. The... READ MORE
NYSE ADVANCE DECLINE HASN'T HIT A NEW HIGH ... Like most other market analysts, I've been expecting the traditional fourth quarter market rally. On Tuesday, after the Fed hinted that it might be nearing the end of its rate-hiking, I wrote that the two-week correction/... READ MORE
GOLD PULLS BACK WHILE YEN JUMPS ... On Monday I revisited the positive relationship between gold and the Japanese market. I suggested that both still looked overbought to me, but would probably need to correct together. Gold started its downturn yesterday which has continued today. Chart 1 shows the Gold Trust... READ MORE
FED DROPS REFERENCE TO ACCOMODATION ... The Fed raised short-term rates another quarter point today to 4.25% as expected. However, it dropped its reference to "policy accommodation". The market took that to mean that the Fed may be nearing the end of its tightening cycle. Whether that&... READ MORE
NEITHER ONE HAS CORRECTED ... A couple of weeks ago I expressed some concern that gold prices might stall or pullback temporarily from long-term supply around $500. Obviously, that didn't happen. Gold has since jumped another $40 to a new 24-year high. It was up over $10... READ MORE
DOW LOSES MORE GROUND ... The market lost more ground today. The Dow Industrials fell 55 points to close at 10755. That puts it within 55 points of its summer highs near 10700. The market got hit with two negatives today. One was a sizeable pullback in semiconductors which had recently... READ MORE
DOW BACKS OFF FROM 11000 ... Chart 1 shows some chart reasons why the Dow Industrials are pulling back. First of all, the Dow reached its spring high (10984) in an overbought condition. That's seen in the 9-day RSI line (top of chart) which moved into overbought territory... READ MORE