AMAT STOCK FAILS BADLY -- PULLS SOX LOWER... The sharply higher opening in Applied Materials this morning was the big news in a bouncing SOX Index and a higher Nasdaq opening. By day's end, things had turned ugly. Chart 1 shows AMAT closing lower after jumping all the... READ MORE
BIOTECH INDEX HITS NEW HIGH... During January the Biotech Index broke through the 500 barrier to turn its major trend higher. Its relative strength line, which had been dropping since last June, started rising again during November. That was part of a new rotation into the healthcare sector. The BTK... READ MORE
DOLLAR REBOUNDS OFF JANUARY LOW... Earlier today it looked like the U.S. Dollar was breaking its January low near 85. As chart 1 shows, however, the Dollar Index scored an upside reversal day. Part of the rebound may have been technical in nature. The daily RSI and MACD lines... READ MORE
TELECOM ETF RESUMING UPTREND... Cingular's purchase of AT&T Wireless lit a fire under the telecom sector today. Most of the wireless stocks in the group gained ground including AT&T Wireless, Sprint PCS, Nextel, Verizon, and Vodafone. The only two losers were Bellsouth and SBC.... READ MORE
DOW STALLS AT LONG-TERM RESISTANCE... On Wednesday, the Dow Industrials moved above the highs reached in the spring of 2002 at 10673. I stated at the time that the Dow needed to stay over that resistance barrier through week's end. It wasn't able to do that.... READ MORE
GOLDMAN SACHS LEADS BROKERS HIGHER... Brokerage stocks gained almost 4% today and helped lead the financial sector to a strong day's performance. Four brokers hit new 52-week highs including Bear Stearns, Goldman Sachs, Lehman Brothers, and Merrill Lynch. A brokerage upgrade of Goldman Sachs this morning pushed that... READ MORE
DOLLAR DROPS WITH BOND YIELDS... Mr. Greenspan's testimony before Congress which talked about the benefits of a weaker dollar pushed the U.S. dollar sharply lower today. As has been the case lately, bond yields fell along with the dollar (Chart 1). The drop in bond yields (or... READ MORE
OIL JUMPS MORE THAN A DOLLAR... Today's surprise OPEC production cut pushed crude oil prices over a dollar higher. Crude is within a dollar of its recent high at $35. Energy stocks have been the strongest part of the stock market this week. I've said before... READ MORE
OIL SERVICE INDEX IS CLIMBING... OPEC announced today it's plan to cut oil production by one million barrels a day starting April 1. The cut came as somewhat of a surprise and is boosting prices today. Crude oil futures prices are up 60 cents to 33.43. Interestingly,... READ MORE
AUSTRALIAN DOLLAR IS LINKED TO INDUSTRIAL METALS... An article on page C1 of the Wall Street Journal today was entitled "Dollar Suffers Most Against Currencies Tied to Commodities". I've discussed this before but it's worth repeating. First of all, a bull market in commodities... READ MORE
THE KEY IS INTEREST RATES... One news source today attribued the stock market rebound to the jobs picture "brightening". The drop in the dollar, however, was explained by "disappointing" job figures. While those reports seem to be in conflict, they're not too far from... READ MORE
OUT OF CYCLICALS AND INTO CONSUMER STAPLES... One of the best visual ways to spot group rotations is with ratio or relative strength analysis. There are two ways to do that. One is to compare each index to the S&P 500 and to see which ones are outperforming... READ MORE
CISCO AND CIENA TUMBLE... Cisco is the most actively-traded stock today and it's falling heavily. Chart 1 shows the tech bellwether gapping under its 50-day moving average in morning trading. In addtion, it's 14-day RSI line has fallen under 50 for the first time in three... READ MORE
JNJ LEADING DRUGS HIGHER... Yesterday we showed Pfizer achieveing a bullish breakout and helping to lead the drug group higher. It was pointed out that PFE was the most heavily-weighted stock in the DRG Index. The second biggest DRG stock is Johnson & Johnson. Chart 1 shows that drug leader... READ MORE
TOP SECTOR... Once again Healthcare was the day's top sector. Much of the gains were seen in biotech and drug groups, both of which gained more than 1% today. Two of the day's standout performers are charted below. Chart 1 shows Amgen surging to a four-month... READ MORE
DOLLAR IS AT BOTTOM OF TRADING CHANNEL AND OVERSOLD... Chart 1 shows a clearly defined trend channel, which are parallel trendlines drawn over the peaks and troughs of the Dollar's weekly bars. The Dollar Index is touching the lower trendline for only the third time in the last... READ MORE
SOX LEADING TECHS LOWER...ROTATION INTO CONSUMER STAPLES... The prospect for higher rates usually takes its biggest toll on market sectors with the highest p/e ratios. Those are usually the stocks that have led the market higher during the past year. Small caps and techs certainly qualify. That makes... READ MORE
HIGHER DOLLAR HURTS COMMODITIES... Yesterday's announcement by the Fed hinted at higher rates sooner rather than later. That raised rates all along the yield curve and has boosted the U.S. dollar. A bounce in an oversold dollar is causing heavy profit-taking in gold and commodities in general.... READ MORE
BOND YIELDS JUMP... The Fed took the bond and stock markets by surprise today by dropping their commitment to keeping short-rates low "for a considerable period of time". That was interpreted to mean that the Fed was a step closer to boosting rates. The result was predictable. Bond... READ MORE
SOX ALREADY ON SHORT-TERM SELL SIGNAL... Our midday update talked about the Semiconductor (SOX) index being on a short-term sell signal. We also showed that the weekly chart was starting to look toppy. Chart 1 shows the daily stochastics and MACD lines for the SOX having turned negative. The SOX... READ MORE
NOVELLUS BREAKS 200-DAY AVERAGE... Novellus is tumbling 11% today on very heavy volume. It's one of the Nasdaq's most active stocks. The daily chart shows the stock tumbling under its 200-day moving average. Not only had the stock already broken its 50-day average, but the 50-day... READ MORE
YIELDS BOUNCE BACK OVER 4%... The 10-Year T-note yield has been dropping since the start of January. Last week the yield fell below 4% for the first time in three months -- and slipped under its 200-day moving average. Although the short-term rate in trends has been down, Chart 1... READ MORE
TALE OF TWO STOCKS... For the second time in two days the Dow held up better than the Nasdaq. The Dow ended the day unchanged while the Nasdaq lost 23 points (1%). That discrepancy can be explained by looking at the divergent trends of two Dow stocks. Eastman Kodak soared... READ MORE
RATE-SENSITIVE STOCKS HAVE A GOOD DAY... In a bullish display of unanimity, all three Dow averages hit new 52-week highs today. On a percentage basis, the biggest gain was seen in the utilities. That have may have to do with the fact that rate-sensitive stocks were market leaders today. The... READ MORE
CRUDE OIL CLIMBS OVER $36... Crude oil prices jumped another $1.13 today to close above $36. Natural gas and heating oil prices gained 5% and 3% respectively. That gave a another big boost to the energy sector, which was the day's top performer. While the entire group... READ MORE
NASDAQ BREAKS THROUGH 2100 RESISTANCE... The Nasdaq Composite Index finally closed decisively above the 2100 level, which represented the price peak formed at the start of 2002. Chart 1 shows that the next upside objective is just above 2300. The ability to break through that resistance barrier is a sign... READ MORE
FINANCIALS JUMP ON STRONG VOLUME... News of the merger of JPM and Bank One may have contributed to today's jump in the financial sector because it was the day's top gainer. For the record, JPM lost ground on heavy volume while Bank One jumped on strong... READ MORE
APPLE AND INTEL BACK OFF FROM RECENT HIGHS... Yesterday afternoon we showed a chart of Intel backing off from resistance along its November/December highs as it headed into an important earnings reports. The report was good, but the stock is still selling off. The same thing is happening with... READ MORE
INDUSTRIALS BOUNCE OFF 20-DAY AVERAGE... The modest Dow pullback has found support at its 20-day moving average, which is usually the first line of defense. In Wednesday's trading, the Dow is the biggest percentage gainer and is leading the rest of the market higher. The techs lagged a... READ MORE
SHORT-TERM TREND IS WEAKENING... A very weak December jobs report caught an overbought market by surprise on Friday and caused nervous profit-taking. Contributing to the selling was the fact that the market was struggling with an overbought market condition. The overbought condition isn't new. The daily RSI line... READ MORE
POSTWAR HIGHS... Energy prices are jumping again today. Natural gas is up 5% to a new recovery high. Heating oil and crude oil are also trading at the highest levels since last spring. Chart 1 plots an index of energy prices and shows it trading at the highest level since... READ MORE
BUYING A TELECOM ETF... Last Friday, I wrote a Market Message entitled "Telecom Turnaround". I showed a chart of the AMEX Telecom iShares ETF which appeared to be on the verge of a bullish breakout. I also suggested that the pattern had the look of an "ascending... READ MORE
NEARING TEST OF EARLY 2002 PEAK... The Nasdaq Composite Index is approaching an important chart test. That's because it's nearing the peak hit at the start of 2002 at 2098. I've been using that as a major upside target for most of the past... READ MORE
RYLAND IS BIGGEST LOSER... Last week I talked about Ryland leading the homebuilders lower. It's doing it again today. RYL has tumbled 9.80 this morning on rising volume. That puts the homebuilder at the lowest level in three months and within striking distance of its 200-day moving... READ MORE
LOW U.S. RATES ARE HURTING THE DOLLAR... The direction of the U.S. dollar is heavily influenced by the direction of U.S. interest rates -- especially short-term rates. Since 2000, the Fed has dropped short-term rates to the lowest level in decades. And has pledged to keep them... READ MORE
DUKE ENERGY BREAKS RESISTANCE... Three of today's top percentage gainers in the S&P 500 are charted below. All three are breaking through formidable resistance barriers. In a strong utility group, Duke Energy is moving above chart resistance at its June high. Its 40-week moving average has... READ MORE
BIOTECH INDEX TESTING SEPTEMBER HIGH... After rallying during November and December, the Biotech Index is meeting resistance near its September high. Despite the recent rally, its relative strength line has continued to lag behind the S&P 500. Chart 1 BROKERS TESTING OLD HIGH... Brokerage stocks are also testing... READ MORE
CRB INDEX HITS 15-YEAR HIGH... Earlier today we showed the price of gold breaking out to a new 15-year high. Gold ended up $8.70 to close at 424.80. In a sign of how broad-based the commodity rally has become, the CRB Index also hit a 15-year high. The... READ MORE
GOLD RISES OVER $420... The price of gold has risen $8 today and is trading over $420 for the first time in fifteen years. That's giving a big boost to gold shares today. Chart 1 shows gold moving above the highs reached during 1993 and 1996. The same... READ MORE
WORST SECTOR FOR 2003... I've written recently about sector rotations out of former market leaders into former market laggards. One 2003 lagging sector that appears to be attracting new money is Telecommunations. This was the worst performing sector for 2003. Chart 1, however, shows AMEX Telecom iShares rising... READ MORE