CRUDE IS STILL TESTING 200-DAY AVERAGE ... The last time I showed the chart of crude oil, it was testing major support at its 200-day moving average. That's still the case. Chart 1 (plotted through Monday) shows that crude is also testing the low hit in early May. Needless... READ MORE
WHY TECHNOLOGY LEADERSHIP IS IMPORTANT... I wrote yesterday about the technology-dominated Nasdaq market starting to show better relative strength than the S&P 500. I've also written many times that upside technology leadership is a vital ingredient in any serious stock market rally. I'll try... READ MORE
MATERIALS AND ENERGY ARE WEEK'S WORST ... There appears to be some group rotations going on in the market that's been sparked by the recent drop in commodity-related groups like basic materials and energy. Gold stocks have also fallen sharply. In fact, those were last week'... READ MORE
UTILITY PLUNGE ENDS SAFE HAVEN STATUS ... With the market apparently starting another downleg, even the safe haven status of utilities appears to have ended. Chart 1 shows why. The Dow Utilities plunged over 13 points earlier today to shatter their 50-day moving average. That puts all three Dow averages in... READ MORE
DOW AND RUSSELL 2000 STILL BELOW 200-DAY LINES ... Despite the recent market bounce (which may be ending), the market still has major bearish bias. Charts 1 and 2 show the Dow Industrials (Chart 1) and the Russell 2000 Small Cap Index (Chart 2) unable to exceed their January lows and... READ MORE
DOLLAR INDEX ACHIEVES BULLISH BREAKOUT ... The US Dollar Index broke out on Thursday to a new 2005 high. It also broke through its 200-day moving average. I discussed a more positive outlook for the dollar's intermediate-term trend on Wednesday and some ripple effects an upside breakout would have... READ MORE
FOREIGN CURRENCIES FALL... The U.S. trade deficit for March was much narrower than expected. That's giving a boost to the U.S. dollar and is pushing foreign currencies lower. Charts 1 and 2 show the Canadian Dollar and the Euro in danger of falling below their 200-day... READ MORE
HEALTHCARE IS TOP APRIL GAINER ... Last Monday I wrote about healthcare being the top sector gainer for the month of April (May 02, 2005). I've also written several bullish articles on the revival of this group over the last couple of months. I believe that healthcare is the... READ MORE
FIRST A LOOK AT THE NYSE COMPOSITE INDEX ... Every time I write about a certain stock market index, I'm asked why I don't write about some of the others. I generally try to spread my coverage around to all the major stock indexes, but can'... READ MORE
DAILY CHART SHOWS NEUTRAL TREND ... In order to understand why the market is caught in a lot of cross-currents right now, it's necessary to look at it from different time perspectives. It's not enough to just consult the daily chart. It's necessary to also... READ MORE
FINANCIAL SPDR EXCEEDS 200-DAY LINE ... I've written several times recently that if the market were going to stage a rally, one of the groups that would lead it higher would be the financials. And that's what happened today. In a strong market day, financials were the... READ MORE
CRUDE NEARING TEST OF 200-DAY AVERAGE ... Crude oil prices fell over a dollar today and ended back under the $50 level. That continues the short-term downtrend that started in mid-March. Chart 1 shows that crude is nearing a test of its 200-day moving average. It bounced off that long-term support... READ MORE
HEALTHCARE SPDR MOVES AHEAD OF UTILITIES... Chart 1 shows the performance of the nine sector SPDRs for the month of April relative to the S&P 500 which is the zero line. Healthcare moved slightly ahead of the utilities as the best sector performer for April. Financials and consumer... READ MORE
FIRST QUARTER GDP CONFIRMS WEAKENING ECONOMY ... The economic news keeps getting worse. Consumer confidence is falling as are durable goods orders, while inventories are building. The drop in consumer confidence suggests a drop in consumer spending (which is two-thirds of the economy). The drop in durable good orders reveals lower... READ MORE
BOND YIELDS CONTINUE TO DROP ... Two things happened today that help explain the continuing drop in bond yields -- and another jump in bond prices. One is the plunge in crude oil futures, which is anti-inflationary. Another is the big drop in durable goods orders, which is more evidence of... READ MORE
CRUDE DROPS HEAVILY... A big buildup in crude oil inventories has pushed the key commodity down by $1.85 in afternoon trading. Chart 1 shows crude slipping back under its 50-day moving average. It's still above its mid-April low, however, at $51. The drop in crude is causing... READ MORE
GOLD STILL OVER 200-DAY LINE, BUT XAU ISN'T ... A bounce in the U.S. dollar is starting to put some downward pressure on the price of gold. The last time I looked at the gold market was on April 18 when it was bouncing off its 200-day moving... READ MORE
NASDAQ 100 DROPS ON HEAVIER VOLUME... Last evening I wrote about the lack of upside progress by the Nasdaq market and also the lack of upside volume, which has been a problem for the entire market. Things took a turn for the worse today. The Nasdaq 100 Shares (QQQQ) helped... READ MORE
HEALTH CARE HOLDING UP OK ... One of our readers asked if the healthcare group was still holding up. The answer is yes. Chart 1 shows the Health Care Sector SPDR (XLV) still trading over its 50-day moving average. Its relative strength line just recently hit a new high for the... READ MORE
NASDAQ STILL HOLDS A KEY TO THE MARKET ... The technology-dominated Nasdaq has been a real problem for the broader stock market. The relative weakness in the Nasdaq since the end of the last year has been one of the big negative factors weighing on the market. If the market is... READ MORE
JAPANESE APOLOGY BOOSTS YEN... Over the last week I wrote about the U.S. Dollar starting to roll over from its 2005 high and its 200-day moving average. At the same time, the Euro was bouncing from its 200-day moving average. I took that to mean that the dollar had... READ MORE
KEEP YOUR EYE ON THE KEY CHART LEVELS ... It's important to keep your eyes on the key chart levels. That helps keep things in their proper perspective. It also prevents us from getting too caught up in day-to-day market swings and conflicting signals from short-term technical indicators. The... READ MORE
CORE CPI HITS HIGHEST LEVEL IN TWO YEARS ... Inflation starts to build in three stages. The first stage occurs when raw materials (commodities) start to rise. That started a couple of years ago. The second stage occurs with the Producer Price Index (which is what companies pay to buy those... READ MORE
SOX RALLY FADES... Despite a strong opening in Intel, the bounce in the Semiconductor (SOX) Index hasn't been very impressive. In fact, it's currently down for the day. Chart 1 puts the SOX in some perspective. The good news is that it's bouncing off... READ MORE
SEMICONDUCTOR HOLDERS BOUNCE ON LIGHTER VOLUME... Technology analysts read a lot into today's bounce in the semiconductor group. Chart 1 shows part of the reason why. The Semiconductor Holders (SMH) bounced off their January low. The problem is they did it on lower volume. That's not... READ MORE
BOND YIELDS CONTINUE TO DROP ... Whether or not it's based on fears of a slowing economy -- or today's relatively benign core PPI inflation report -- bond yields are falling sharply as bond prices rise. Chart 1 shows the 10-year T-note yield falling further beneath its... READ MORE
NO DIVERSIFICATION ON THE DOWNSIDE ... Over the last few years, foreign markets have done a bit better than the U.S. market primarily because of the falling dollar. Having said that, however, global stock markets have been and remain highly correlated. The three lines in Chart 1 make that point.... READ MORE
DOLLAR INDEX BACKS OFF FROM RESISTANCE... The U.S. Dollar has established an intermediate-term trading range since the start of 2005 within a long-term downtrend. Chart 1 shows the Dollar Index (plotted through Friday) starting to back off from a test of its 200-day moving average and its February peak... READ MORE
HEALTHCARE INVESTORS SHOULD BE FEELING BETTER... While the rest of the market broke down this week, the only sector to end up in the black was healthcare. Chart 1 shows the Health Care SPDR (XLV) ending the week at a new recovery high. Its rising relative strength line also shows... READ MORE
REVISITING RYDEX URSA ... Back on April 5 I wrote a piece on bear funds (April 05, 2005). Part of the headline was that no major buy signal had taken place. That's no longer true. Last Friday I recommended buying (or adding to) any bear fund that closed over... READ MORE
CYCLICAL STOCKS TAKE A BEATING ... One of the best ways to predict the direction of the economy is to follow the trend of major market averages. That's because the market is one of the best economic indicators of all. Since the start of 2005, those market averages have... READ MORE
TRANSPORTS TUMBLE 3% ... Last Friday I wrote about the Dow Transports falling beneath their 50-day moving average and being pulled down by rails and truckers. I also warned about how weakness in the transports was a negative sign for both the stock market and the economy. As for the market,... READ MORE
CHIPS CONTINUE TO FALL ... Earlier today I wrote about the need to rotate existing funds already in the stock market -- as opposed to putting new money into the market. I wrote that I favored the former (rotating) but not the latter (new money). I wrote a week ago that... READ MORE
NO FOLLOW-THROUGH FROM YESTERDAY ... When a market records an up day like yesterday -- especially on heavy volume -- it's important to watch for upside follow through. In fact, the market gave back most of yesterday's gains. The only positive factor (and it's a... READ MORE
BRISTOL MYERS SQUIBB HITS 52-WEEK HIGH ... Last Tuesday I wrote a piece on the revival of drug stocks and the healthcare sector which were starting to show market leadership April 05, 2005. Part of that was due to their generally defensive qualities. One of the three drug leaders that I... READ MORE
MEDICAL ETFS HIT SIX-MONTH HIGHS ... The Pharm Holders (PPH) are the day's top Exchange Traded Fund. Chart 1 shows the PPH breaking through its recent highs to reach the highest level in six months. Some of the day's top percentage gainers are Merck, Lilly, Schering Plough,... READ MORE
FED MINUTES PUSH BOND YIELDS LOWER... The Fed minutes from its last meeting calmed the financial markets and led to an impressive rebound in the stock market. Two of the intermarket factors that turned the market around in the afternoon were a drop in bond yields and crude oil. Chart... READ MORE
TRANSPORTS LOSE 3% AND BREAK SUPPORT LINE... The market lost another one of its leaders -- the transportation group. The Dow Transports tumbled more than 3% today and was the day's worst group. What's worse the transportation index tumbled beneath its 50-day moving average in very... READ MORE
ALCOA GAPS HIGHER WHILE WAL MART FALLS... Rising aluminum prices have given a big boost to the shares of Alcoa. A positive earnings report is pushing the big aluminum producer over a dollar higher in morning trading. It's also one of the big board's most actively... READ MORE
S&P SPDR TESTING 50-DAY AVERAGE ON LOW VOLUME... I recently wrote about the possibility of a short-term bounce in the S&P 500 to its 50-day moving average. Chart 1 shows the S&P 500 SPDR (SPY) touching that resistance barrier twice over the last four... READ MORE