SARA LEE FALLS 7% ... Since the start of December, I've highlighted the relatively strong performance of Sara Lee as a leader in the consumer staples group. Just last Thursday I showed the stock breaking out to a new four-year high. Although its quarterly profit came in higher, the... READ MORE
NASDAQ HEADED TO 200-DAY AVERAGE ... The Nasdaq market has suffered the most technical damage of all the major stock indexes. Yesterday I showed the Nasdaq market having broken a five-month up trendline drawn under its August/October lows. It's now headed toward its 200-day moving average and its... READ MORE
MOVING AVERAGE TRENDS ... I use moving averages quite a bit in my chart analysis. That's because they're a simple way of telling which way market trends are moving. The three that I watch are the 20-day, the 50-day, and the 200-day. Each one measures a different... READ MORE
CRUDE RESUMES UPTREND -- ENERGY STOCKS LEAD... Crude oil is rallying more than a dollar today and appears to be resuming its recent uptrend. Chart 1 shows that this week's minor pullback in oil found support along its mid-December peak at 46.65. That's what should... READ MORE
SARA LEE REACHES FIVE-YEAR HIGH ... With the market continuing to slide, consumer staples were once again the day's top sector performer. The standout chart belongs to Sara Lee. Its daily chart shows the stock breaking through resistance at 24.50. Its green volume bar shows rising volume on... READ MORE
BEAR MARKET FUND HASN'T GIVEN MAJOR BUY SIGNAL YET ... I've received a number of questions about buying a bear market fund to profit from a falling stock market. I've also been asked to write more about short selling in general. Let's start... READ MORE
JANUARY 2005 RELATIVE PERFORMANCE ... The performance bars shown in Chart 1 plot the relative ranking of the nine market sectors since the start of the new year. The sector bars are placed in descending order through last evening (Tuesday). Starting from the left, the only two sectors in the black... READ MORE
CISCO HELPS DRAG NASDAQ LOWER... Because of its large size, Cisco has an important influence on the Nasdaq market. Recently, that influence has been to the downside. Chart 1 shows the big networker tumbling to the lowest level in two months -- and on rising volume. That puts the stock... READ MORE
SUPPORT LEVELS ARE STILL HOLDING... Despite the fact that the market had another losing week, there wasn't much technical damage done. The only negative was the fact that all of the indexes closed below their 50-day moving averages. All of the other support levels that I showed last... READ MORE
RELATIVE TO WHAT?... Judging from some of the feedback I've gotten recently, I think I need to discuss the concept of relative strength a bit more. The type of questions I've received, for example, is what happened to the defensive qualities of biotechs and drugs --... READ MORE
SOX/OSX RATIO REVISITED... Semiconductors have been falling this week while oil service stocks have been rising. The relationship between the two industry groups can be examined by plotting a ratio of the two. Which brings us back to the Semiconductor (SOX) Index/Oil Service ($OSX) ratio which is plotted... READ MORE
OIL COMPLETES "DOUBLE BOTTOM"... Earlier in the week, I wrote about crude oil tracing out a possible "double bottom" just above long-term support at $40. In mid-day trading, crude is up $1.78 and has hit a new six-week high at $48.15. It has risen... READ MORE
UPS TUMBLES 7% -- TRANSPORTS ON SELL SIGNAL ... UPS tumbled over 6 points today on monster volume. The weekly bars in Chart 1 show the technical damage that's been done to this transportation stock. It's weekly RSI and MACD lines are on the first sell signals... READ MORE
TRADE DEFICIT BOOSTS FOREIGN CURRENCIES... The U.S. November trade deficit came in higher than expected and reached a record high. That's pushing the U.S. dollar sharply lower -- and foreign currencies higher. Chart 1 shows the Euro climbing back over its 50-day average. The Commodity Channel... READ MORE
WILSHIRE 5000 TARGETS SUPERSEDE S&P 500 TARGETS... During the fourth quarter, I gave an upside target in the S&P 500 to the 1250 level. That was partially predicated on the fact that 1250 represented a 62% retracement of the 2000-2002 bear market. I later wrote about... READ MORE
CRUDE OIL RALLY FADES... Yesterday I showed crude oil trying to break through its late December peak and its 50-day moving average. After a good start, the commodity ended the day in the red. Although that doesn't change the long-term picture, it was enough to prevent an upside... READ MORE
DNA DISAPPOINTS ... Yesterday I showed Genentech (DNA) testing chart resistance along its autumn high near 55. After the close, the big biotech company reported strong earnings but apparently not enough to impress the market. As a result, the stock has gapped down 4.4% today. The downside action has prevented... READ MORE
BIOTECH INDEX NEARS ANOTHER UPSIDE BREAKOUT... After retesting its 50-day average last week, the Biotech Index is nearing another upside breakout. It's within a couple of points of its December peak near 550. Its relative strength line also looks encouraging. It bottomed during August (see first arrow) and... READ MORE
MAY MAY BE TURNING HIGHER... In my last article on energy, I wrote that I thought crude oil would find a floor above $40. So far, that new floor has held. After a successful retest of its early December low, crude oil traded over $47 today and is trying to... READ MORE
DOW AND S&P 500 BOUNCING OFF 50-DAY LINES... The major stock indexes are trying to stabilize at initial moving average and trendline support. The Dow is holding above its 50-day average, while the S&P 500 is bouncing off that support line. I wrote on Friday that... READ MORE
CONSUMER STAPLES ARE TOP SECTOR FOR THE WEEK ... While all of the other market sectors lost ground this week, consumer staples suffered the least damage and even eked out a minor gain. It was also Friday's biggest gainer in the face of another losing day. That makes sense... READ MORE
NASDAQ COMPOSITE SUPPORT... Yesterday I showed support levels for the Dow, the S&P 500, and the Nasdaq 100. So far, none of those support levels have been broken in today's trading. I've been asked to give a few more and here they are. The... READ MORE
THE JANUARY BAROMETER... You're going to be hearing a lot over the next few days and weeks about the importance of the month of January in determining stock market trends for the rest of the year. There are two January signals that I'd like to explain... READ MORE
DOW SUPPORT LEVELS... I've been asked to show where underlying support levels are located for the major stock indexes. I'm using daily bars and point & figure charts to identify where the support levels are found. Chart 1 shows the 50-day average for the Dow at... READ MORE
WILSHIRE 5000 HAS RETRACED 62% OF BEAR TREND... One of the problems with doing a chart analysis of the "market" is knowing which market index to use. No one stock index speaks for the entire market. There is one, however, that a number of readers have asked about... READ MORE
BIOTECHS ARE BOUNCING AGAIN... After pulling back to its 50-day average, the Biotechnology Index (BTK) is bouncing again. So much so that it's the day's top group. Early last week, I showed the BTK breaking through resistance near 540. It's dipped back below that... READ MORE
INDIVIDUAL REITS ARE FALLING ON VOLUME... Earlier today, I showed the Morgan Stanley REIT Index (RMS) and a leading REIT ETF breaking their 50-day day moving averages on rising volume. Here's a closer look at where most of the selling is coming from. The first three charts show... READ MORE
DELTA SLASHES FARES... Delta's announcement of a 50% rate cut in domestic airline fares is killing the airlines today. The Airline Index (XAL) is tumbling 7% today as the entire group is being sold heavily. Chart 1 shows the Airline Index crashing through its 50-day moving average and... READ MORE
VIX REACHES TWO-MONTH HIGH... It's been a long time since I've written about the CBOE Volatility (VIX) Index. A lot of people have dismissed it as no longer having any forecasting value. That may explain why we haven't heard much about its recent rise.... READ MORE
SEMICONDUCTORS BREAK DOWN ... Semiconductor stocks are having a very bad chart day. Chart 1 shows the Semiconductor (SOX) Index shattering its 50-day moving average and a rising support line drawn under its September/October lows. The recent failed attempt by the SOX to stay over its 200-day moving average also... READ MORE
MORE DOLLAR BUYING ... As the dollar continues the new year rally, foreign currencies continue to weaken. The Euro is moving down for a test of its December low and its 50-day average. Its daily MACD lines have issued a short-term sell signal (Chart 1). The Japanese yen is already threatening... READ MORE
WORLD INDEX IS OVERBOUGHT ... The Dow Jones World Index is now in overbought territory. Chart 1 compares the 14-week RSI oscillator to the Index since 1998. An overbought reading occurs when the RSI is over 70. A oversold reading occurs when it's under 30. The weekly RSI line... READ MORE
DOLLAR RALLIES... The first day of trading in the new year is witnessing a bounce in the dollar and selling in foreign currencies. The Euro has been the only major foreign currency to reach a new high during December. But that move to a new high hasn't been... READ MORE
AN ALTERNATE VIEW ... I've written many times over the last few months about my view that the cyclical bull market in stocks has entered a fifth (and final) upleg. That's based on the Elliott Wave approach that holds that bull markets take place in five waves... READ MORE
REVUE OF NOVEMBER 24 MESSAGE... A number of readers have asked about the recent action in gold and the dollar -- especially after yesterday's $8.00 drop in bullion. Some wondered if the pullback in gold was warning of a bounce in the dollar. The answer is probably... READ MORE
LOCKHEED MARTIN LEADS DEFENSE STOCKS LOWER... Aerospace/defense stocks ave been among the year's top performers. Not anymore. The group has been losing ground lately, but is being hit especially hard today. The biggest loser is Lockheed Martin. Chart 1 shows the stock gapping down to a two-month... READ MORE
FEAR OF JAPANESE SELLING ... The Japanese yen is falling today. Rumors that the Japanese central bank may use the thinly-traded week to do some yearend intervening has caused nervous selling by currency traders. The yen has fallen to the lowest level in a year against the Euro. Chart 1 shows... READ MORE
AMAZON BREAKS OUT ON GOOD VOLUME... Amazon.com is today's standout stock performer on the Nasdaq market. News of a strong holiday season is pushing the stock through two important resistance barriers -- its September peak and its 200-day moving average. The two big volume bars reflect heavy... READ MORE
BIOTECH INDEX COMPLETES BULLISH TRIANGLE... The last time I looked at the Biotech Index, I described it as a potential "ascending triangle" as shown in Chart 1. That pattern is identified by two converging trendlines with the upper line flat and the lower line rising -- and is... READ MORE
DOW STARTING TO OUTPERFORM NASDAQ ... I mentioned yesterday that the Dow Industrials were starting to catch up with the rest of the market after reaching a three-year high on Tuesday. Actually there's more to it than that. If the Dow is starting to do better than the rest... READ MORE