BASIC MATERIALS AND ENERGY ARE SLIPPPING... Basic materials and energy were among yesterday's weakest groups. The Materials Sector SPDR (XLB) and the Oil Service Holders (OIH) both closed beneath their 50-day moving averages. The month of March has also seen some slippage in their relative strength lines.... READ MORE
EMERGING MARKETS ARE FALLING HARD ... Given the high correlation between global stock markets, it's no surprise to see most of them weakening along with the U.S. market. Emerging markets are getting hit especially hard. I believe that's due to the recent upturn in long-term... READ MORE
JAPANESE YEN SLIPS UNDER 200-DAY LINE ... With the U.S. Dollar in a rally mode, most foreign currencies have been selling off of late. Among the major currencies, the Japanese yen has been hit the hardest. Chart 1 shows the yen falling under its 200-day average and testing... READ MORE
DON'T WORRY ABOUT THE SHORT-TERM ... I've been getting messages asking about my short-term market view. Partially in response, I wrote a message earlier today about the market being in a short-term oversold condition from which a short-term bounce could materialize. That'... READ MORE
NIBBLING AT NASDAQ 2000... The market is in an oversold condition from which a rebound is possible. That doesn't turn its chart bullish. But some bottom-fishers are starting to do some nibbling -- especially in the Nasdaq market. Chart 1 shows two reasons why. First, the Nasdaq Composite... READ MORE
GOLD SELLING TIED TO RISING DOLLAR ... Some of you have asked why gold sold off this week in reaction to news of higher inflation. After all, commodities are leading indicators of inflation. Keep in mind that a big part of the commodity advance over the last three years has been... READ MORE
BOND YIELDS SURGE TO EIGHT-MONTH HIGH ... It's amazing to me how the media (and investors) hang on every word from the Fed. Veteran market watchers know that the Fed reacts to market events -- it doesn't anticipate them. Today's admission by the Fed that... READ MORE
RELATIONSHIP BETWEEN SHORT AND LONG RATES ... With the Fed expected to keep raising short-term rates, a lot has been written about the relationship between short and long-term rates. The fact is that they usually trend in the same direction -- but not always to the same degree or at... READ MORE
DOW AND S&p 500 SLIP UNDER CHART SUPPORT... The blue chip averages continued to deteriorate today. Both the Dow and the S&P 500 closed below their late February lows. Financial stocks were among the day's biggest losers as long-term interest rates rose again.... READ MORE
THE VIX IS RALLYING ... The CBOE Volatility Index (VIX) is starting to climb. Chart 1 shows the VIX trading at a two month high and nearing a challenge of its 200-day moving average. A more important test will take place at its January high at 14.75. That'... READ MORE
SECTOR PERFORMANCE CHART ... Most weeks in "John's Latest Performance Chart" I show the relative rankings of the nine AMEX Sector SPDRs relative to the S&P 500. Chart 1 shows those sector rankings since the start of the year. I've arranged the sector... READ MORE
SHARPCHARTS 2 IS ON THE WAY ... The March 12 Chartwatchers Newsletter discussed the latest "Beta" version of Stockchart.com's up-and-coming new charting tool -- SharpCharts 2. This new charting version has been in the works for almost two years and it's almost ready.... READ MORE
CRUDE OIL ACHIEVES NEW RECORD ... Crude oil jumped $1.40 today to break through its previous record set in late October. That puts oil in uncharted territory. While that helped energy stocks today, it had a very negative impact on the rest of the stock market. That wasn't... READ MORE
WHAT TO DO?... With the stock market starting to look toppy, I've been surprised at the number of messages I've received asking what to do in an environment of a weak dollar, rising commodities, rising interest rates, and a peaking stock market. Surprised because that'... READ MORE
HEAVIER TRADING ON DOWN DAYS ... One of the market's problems is the fact that the volume pattern has turned negative. The previous week's upside breakout to new highs by the S&P 500 took place on light volume. Last week's downturn came on... READ MORE
WATCH OUT FOR DIVERGENCES IN WAVE FIVE ... Last Friday I expressed my belief that the cyclical bull market that began in October 2002 had probably ended. That belief was based partially on my Elliott wave view that the fifth and final upwave that started last summer had ended. I also... READ MORE
BOND YIELDS BREAKOUT ... With each passing day the headlines get worse for the dollar, bonds, and stocks while supporting rising commodities and stocks tied to those commodities. That's an intermarket recipe for building inflation pressures with higher interest rates, which may have already ended the cyclical bull market... READ MORE
TEN-YEAR T-NOTE YIELD BREAKS THROUGH DECEMBER HIGH ... With all of the leading indicators of inflation pointing upward, it was just a matter of time before long-term rates started to rise as well. They did it today in a big way. Chart 1 shows the ten-year T-... READ MORE
THEY'RE USUALLY THE FIRST TO PEAK ... From an intermarket perspective, there are three things that have historically led to market tops. The first two are a falling dollar and rising commodities. We've had those two for some time. The third thing is an upturn in long-... READ MORE
TEN-YEAR T-NOTE YIELD HITS SEVEN-MONTH HIGH ... It may have been the recent rise in commodity prices to 24-year highs and weakness in the dollar. Or it may have been economists' raising their 2005 forecast for economic growth. It may even be the fact that the... READ MORE
CRUDE OIL TESTING OCTOBER HIGH ... Earlier today I wrote about how another drop in the U.S. Dollar was giving a big boost to gold and most other commodities. Gold closed $5 higher along with rising gold stocks. Both have achieved short-term bullish breakouts. The CRB Index climbed over... READ MORE
GOLD SHARES RISE ALONG WITH THE EURO... More dollar selling is boosting gold prices more than $3 higher today (Chart 1). The Gold/Silver (XAU) Index has already broken out to a new three-month high. Since gold stocks usually rise faster than bullion, an upside breakout in the yellow... READ MORE
PROFIT-TAKING IN ENERGY ... Last week I wrote about the fact the Oil Service Holders (OIH) were in an overbought condition and up against chart resistance formed during 2000 at the 100 level. Prices backed off from that level last Monday. After a low-volume retest of that level again... READ MORE
LOOKING FOR 62% RETRACEMENT AT 1250 ... With the S&P 500 having broken out of its recent trading range, and trading at the highest level in more than three years, it's time to revisit my earlier Elliott wave interpretation and came up with some possible upside price... READ MORE
BOND BUYING PULLS YIELDS LOWER... This morning's strong job report is having a positive impact on both bonds and stocks. The bullish impact on stocks isn't surprising. The impact on bonds may be. Bond traders are encouraged by the absence of upward wage pressure which helps... READ MORE
BUT CLOSES IN LOWER END OF DAY'S RANGE ... The price of crude rose all the way to $55, resulting in a test of its all-time high reached last October. After climbing more than $2.00 intra-day, however, it settled up only .52 cents and in the... READ MORE
CRUDE NEARS $55 TARGET ... Yesterday's spike in crude oil pushed it to $53 for the first time since last October. That puts the price of this key commodity within a couple of dollars of the top its recent trading range. That will be an important test for a... READ MORE
OIL SERVICE STOCKS STARTING TO CORRECT... Earlier today I wrote about an overbought energy sector that was starting to experience some profit-taking. Oil service stocks were the day's weakest group. Although that group is also overbought, there's another longer-range technical reason why oil service... READ MORE
ENERGY OVERBOUGHT AND PULLING BACK ... After a spectacular run since the start of January, the energy sector is finally succumbing to some profit-taking after trading in overbought territory for nearly a month. Yesterday's high volume drop -- followed by today's selling -- suggest that the rally is... READ MORE
BIOTECH INDEX LOSES 6% ... Biotech stocks were the hardest hit today in a falling market. Chart 1 shows the Biotechnology Index (BTK) falling to a four-month low today and closing well below its 200-day moving average. Its relative strength line has fallen to the lowest level in a... READ MORE
JAPANESE YEN JUMPS AGAINST OTHER CURRENCIES... On Monday, February 14 I wrote an optimistic article on Japan entitled "Land of the Rising Sun, The Rising Yen, and Maybe Even a Rising Stock Market" (February 14, 2005). I'm revisiting that bullish story today because the Japanese yen... READ MORE
UTILITIES PAY DIVIDENDS ... Earlier in the week I showed utility stocks selling off in reaction to a jump in interest rates. That was due to the fact that utilities are rate-sensitive. At the same time, it's important to recognize that utilities are also considered to be a... READ MORE
SEMICONDUCTOR HOLDERS BOUNCE OFF 200-DAY LINE... In a reversal of roles, the semiconductor group has moved from one of the weakest parts of technology to one of the strongest. While Internet and networking stocks have been helping to pull the Nasdaq market lower, the chips are finally lending some... READ MORE
ENERGY PRICES AREN'T REALLY DROPPING ... The news media made a lot out of the relatively small gain of 0.1% in the January CPI number. A lot of financial headlines claimed that showed that inflation fears were overblown. I don't think so. That's because... READ MORE
FINANCIALS AND REITS DROP FURTHER... Last Friday I wrote about how the buildup of inflation pressures -- and the threat of rising long-term rates -- were combining to cause loss of market leadership in the financials and REITs. That negative trend continued today as both groups were among the day'... READ MORE
DOLLAR PLUNGES ON KOREAN SELLING ... This morning I wrote about heavy selling in the U.S. dollar on the South Korean central bank's announced intention to diversify its currency holdings out of U.S. dollars and into other foreign currencies. Virtually all foreign currencies jumped on that news... READ MORE
EURO AND YEN SURGE AGAINST THE DOLLAR ... The dollar is falling heavily today against most of the world's currency markets. Although the dollar rally had already ended a couple of weeks ago, today's heavy dollar selling came from the Bank of Korea's announcement that... READ MORE
REVIEW OF ELLIOTT WAVES... This is as good a time as any to review what I've been writing since the start of the year, and to clarify what advice I've been giving. Rather than repeat everything here, I invite you to review the headlines of my... READ MORE
NASDAQ 100 DROPS ON HIGHER VOLUME... The Nasdaq 100 had a bad chart day. It was the biggest percentage loser of the major stock indexes. And it fell on rising volume. That's bad for two reasons. It continues the pullback from its 50-day moving average -- thereby preventing... READ MORE
RELATIVE STRENGTH ALONE ISN'T ENOUGH ... I place a lot of importance on relative strength. As a rule, I generally recommend market groups -- or individual stocks -- that are showing relative strength. In other words, they're outperforming the S&P 500. But relative strength by itself isn&... READ MORE