CRUDE DROP HURTS ENERGY SHARES... On Monday I wrote about energy shares looking over-extended and vulnerable to some profit-taking. They've been the weakest part of the market over the last two days. Not surprisingly, crude oil dropped more than $2.00 today as well. That's not... READ MORE
DOW DIAMONDS HOLD 50-DAY LINE ... The Dow Diamonds have been moving sideways since the start of August. Despite their loss of upside momentum, there hasn't been much chart damage either. Chart 1 shows the Dow Diamonds surviving a test of their 50-day moving average at the start of... READ MORE
GOLD SHARES HAVE STRONG WEEK ... Among industry groups, gold stocks catapulted to the top spot last week. Chart 1 shows the Gold & Silver (XAU) Index breaking through a major down trendline and its 200-day moving average. A lot of that had to do with a weaker dollar. [I recently... READ MORE
JAPAN ETF CHALLENGES 2005 HIGH ... At the start of August, I wrote that a weaker dollar was giving a big boost to foreign Exchange Traded Funds which were outperforming the U.S. That's because foreign ETFs benefit from rising stocks and rising foreign currencies. There have been some... READ MORE
JOHN'S ON VACATION THIS WEEK...... John's taking a well deserved break from watching the markets. If everything is going to schedule, he should be enjoying the sights at Yellowstone National Park right about now. In the meantime, I thought we'd take a look back... 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 highest level... 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 barely exceeded the... 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 high. It... 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-year high. Nextel... 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 a... 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 the... 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 barrier... 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 over again... 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 (OIH)... 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 Euro... 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 dollar... 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 retesting that... 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
FIRST HALF RESULTS... The bars in the following chart show the best and worst group performers for the first half of the year. To no one's surprise, energy was the top sector -- while the fuel-sensitive transports were the weakest. Utilities took second place thanks to falling bond... READ MORE
OIL ETFS STAY OVER BREAKOUT POINTS ... Despite the recent dip in oil prices, energy ETFs have held up relatively well. They're rising today on the back of a jump in the price of crude. Chart 1 shows the Energy Sector SPDR (XLE) staying over its March high near... READ MORE
THE FED DOES IT AGAIN ... The Fed raised the Fed funds rate another quarter point today. Although its wording showed little change from last month, it appears that the stock market was hoping for a sign that the Fed tightening cycle is nearing an end. When it didn't... READ MORE
TRANSPORTS GET LEFT FROM OIL DROP... With crude oil dropping more than $2 today, transportation stocks are getting a much needed lift. And it's coming at a good time. Chart 1 shows the Dow Transports flirting with the late-April/early May lows ranging from 3350 to 3400. This... READ MORE
RISING OIL IS HURTING TRANSPORTS THE MOST ... It's normal to expect that record high oil prices are hitting the fuel-sensitive transportation stocks the hardest. Last week I showed the Dow Transports falling to a new monthly low after breaking their moving average lines. With crude now trading over... READ MORE
BHI HAS JUST HIT ALL-TIME HIGH... During my Friday evening interview on the Nightly Business Report, I recommended the Oil Service Holders (OIH) and Baker Hughes. I pointed out that BHI was the biggest holding in the OIH which had just exceeded its 2000 peak. They showed a 52-week chart... READ MORE