MOVING AVERAGE LINES... I received some questions on the moving average lines that I used yesterday while doing a ratio analysis of the Nasdaq 100 to the S&P 500. I've also been asked to show how to create the ratio lines. One way is shown in... READ MORE
DOW DIAMONDS NEAR OLD HIGH ... Chart 1 shows the Dow Diamonds nearing a test of their late December high. What remains suspicious is the absence of volume. If you look at the green volume bars since this rally began at the start of February, you'll see that they&... READ MORE
MATERIALS SELECT SPDR IS BREAKING OUT... With commodity prices on the rise again, the Materials Select Sector SPDR (XLB) is attempting a bullish breakout today. Chart 1 shows the XLB trading over its fourth quarter high near 30. Its relative strength line has been rising for the past three weeks.... READ MORE
YEN JUMPS ON JAPAN TRADE SURPLUS... Last week I wrote about an overbought U.S. dollar running into resistance near 85 and starting to weaken. I showed that an oversold Canadian Dollar and Euro were starting to bounce (along with gold and gold shares). Today's focus is on... READ MORE
SEMIS GAIN OVER 3%... Last Friday I wrote about new signs of strength in the semiconductor group. I also wrote that buying in that group -- if it continued -- would be supportive to the technology sector and the market in general. That's because rising chip stocks help the Nasdaq... READ MORE
CRB INDEX CLIMBS BACK OVER 50-DAY LINE... Earlier today I wrote about new selling in the U.S. dollar which gave a boost to gold and oil. In fact, fourteen out of seventeen commodity markets rose today and pushed the CRB Index up 4.39 points. As Chart 1... READ MORE
GOLD ETF BOUNCES ON VOLUME ... The Gold Trust Shares (GLD) are bouncing impressively today off their 200-day moving average. And they're doing so on very strong volume. Chart 1 shows that today's up volume is the heaviest in more than two months. The daily oscillators... READ MORE
TEN-YEAR T-NOTE YIELD FALLS UNDER 4% ... My article yesterday on the yield curve talked about some reasons why falling long-term rates might not be a good thing for the stock market or the economy. For one thing, falling bond yields hint at a weaker economy. For another,... READ MORE
WHAT DOES IT MEAN? ... Earlier this afternoon I did an interview with Ron Insana on CNBC. Our discussion was about the recent drop in long-term bond yields -- and the implications of the flattening yield curve. I thought I'd elaborate on the subject since it's not... READ MORE
SEMICONDUCTOR HOLDERS LEAD TECH RALLY ... For the first time in awhile, technology was the market's top sector. Most of that came from a strong semiconductor group which gained well over 4% in Friday trading. The top sector ETF was the Semiconductor Holders (SMH) shown in Chart 1. It... READ MORE
SEMICONDUCTOR HOLDERS LEAD FRIDAY BOUNCE... The February market rally is drawing strength today from the semiconductor group. Chart 1 shows the Semiconductor Holders (SMH) trading at the highest level in a month and challenging its 50-day moving average. Its relative strength also carries some good news for the group... READ MORE
DOLLAR INDEX NEARS LONG-TERM CHART SUPPORT... I've gotten a lot of requests to update my views on the dollar. Before doing that, however, I need to point out that nothing that the dollar has done since the start of the new year has been a surprise. In... READ MORE
GOLD INDEX STILL TESTING TRENDLINE SUPPORT... Back on January 10, I wrote about the Gold & Silver Index (XAU) being in a support zone defined by the rising trendline shown in Chart 1. The trendline starts in April 2003 and is drawn under the April/July 2004 lows (see arrows)... READ MORE
MATERIALS ETF HITS MONTHLY HIGH ... Second only to energy, basic material stocks are showing good relative strength. Chart 1 shows the Materials Select Sector SPDR (XLB) trading back over its 50-day average and also at the highest level since the first week of January. Its relative strength line along... READ MORE
S&P 500 CLEARS 50-DAY AVERAGE ... After breaking through its January down trendline earlier in the day, the S&P 500 also managed to close just over its 50-day moving average today. Combined with a pickup in trading volume on the big board, it was a... READ MORE
NYAD LINE MAINTAINS ITS UPTREND, NEW HIGHS ARE OUTPACING NEW LOWS AGAIN... The NYSE Advance-Decline line has been rising for several months. That's normally a good sign for the market. Historically, the AD line usually peaks before the market does. During January, the AD line started to... READ MORE
S&P 500 IS BREAKING DOWN TRENDLINE... The market's attempt to stage an oversold rally is beginning to gain more traction. The S&P 500 Large Cap Index is breaking through its January down trendline which was one of the first tasks it had to accomplish... READ MORE
OIL RECOVERS FROM EARLY SELLOFF... Crude oil opened sharply lower today and put energy stocks under early selling pressure. The drop in oil also gave an early boost to the stock market. By the afternoon, however, crude had turned a big loss into a dollar gain. Chart 1 shows that... READ MORE
S&P SPDR OPENS ABOVE RESISTANCE... Yesterday's Iraq election -- and a drop in crude oil this morning -- led to a higher open today. A short-term oversold condition also helped. The 30 minute bars in Chart 1 show the S&P 500 SPDRs (SPY) opening at... READ MORE
MONTHLY AND WEEKLY SIGNALS ARE MORE IMPORTANT THAN DAILIES... I've been emphasizing daily (and hourly) charts recently to study the January downturn. While daily charts show the short-term trend, weekly and monthly charts are the ones that determine the major trend of a market. To study that... READ MORE
DRUG ETF BACK UNDER 50-DAY LINE ... Drug stocks are coming under heavy selling pressure late in the week. As a result, the Pharm Holders (PPH) have fallen well beneath its 50-day moving average. [That's one reason to consider doing some selling -- or, at the very least,... READ MORE
BOND YIELDS FALL AS PRICES RISE... Today's report that growth in the U.S. economy slowed to 3.1% in the fourth quarter is having a predictable effect on bonds and stocks today. It's helping bonds and hurting stocks. Chart 1 shows the Ten year T-... READ MORE
STOCK INDEX ETFS STILL HOLDING ABOVE SUPPORTS... The three stock index ETFs shown below are in short-term oversold conditions. In addition, all three are still above important support levels which I'm defining as their September/October peaks. As long as those supports hold, there's room... READ MORE
OIL SERVICE STOCKS LOOK CHEAPER... I wrote yesterday that energy was my favorite market sector for the year and that oil service was my favorite group within that sector. Here's why. The three charts below show the three energy indexes that I track. The AMEX Oil Index (XOI)... READ MORE
DOW UTILITIES HIT NEW RECOVERY HIGH ... Since the start of the new year, I've written about new leadership by consumer staples and energy. More recently, I wrote that utilities should be next in line to start showing upside leadership. All three groups are among today's leaders... READ MORE
2005 ANNUAL FORECAST MEETING... I'm heading into New York this afternoon to be a panelist for the 2005 Annual Forecast Meeting which is held each year by the Market Technicians Association. Some of the topics discussed will be: Where do we stand in the presidential cycle? Will 2005... READ MORE
S&P 500 SPDRS FADE... Although the S&P 500 SPDRs closed higher today, they ended well off their earlier high. The increase in volume was pretty much concentrated in the first hour of trading. After that, trading trailed off. In my view, very little changed in the... READ MORE
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,... 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... 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... 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... 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 dangerously... 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... 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 -- not... 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.... 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 in... READ MORE