MOTOROLA LEADS TECH SECTOR... The four strongest sectors today are technology, utilities, materials, and healthcare. The charts below show the top performers in each category for the day. In the technology sector, Motorola is breaking out of a three-month trading range -- and on increasing volume. The weekly bars in... READ MORE
STRONG MANUFACTURING DATA HURTS BONDS... U.S. December manufacturing activity hit the highest level in 20 years. That good news is having a predictably bullish impact on stocks. However, it's hurting bonds. As a result, bond prices are down sharply -- and rates are jumping. Chart 1 shows... READ MORE
NASDAQ LEADS MAJOR AVERAGES...DOW LAGS... Of the three major stock averages, the Nasdaq market gained 50% during 2003 and was the years's top performer. By contrast, the S&P 500 gained 26% and the Dow 25%. That means that the Nasdaq gained twice as much as... READ MORE
FALLING DOLLAR IS BULLISH FOR COMMODITIES... A key intermarket principle is that a falling dollar produces higher commodity prices. This is especially true for gold. The U.S. dollar peaked at the start of 2002 and has since fallen to the lowest level in seven years. The CRB Index started... READ MORE
FINANCIALS HAVE STRONG DAY... The Santa Clause rally refers to the usual stock market rally that takes place between Christmas and New Years. So far the market is following its usual end-of-year script. The market had a strong Monday with all major stock indexes hitting new highs for the year.... READ MORE
SECTOR LEADERS REFLECT DEFENSIVE MOOD... As we review the various market sectors on Christmas Eve, it appears that investors have turned somewhat defensive. That's probably not too surprising. The market has had a good year -- boosted by historically low interest rates. New signs of leadership by industrial... READ MORE
FORD JUMPS ON STRONG VOLUME... Auto stocks helped drive the market higher today and Ford was the star of the day. Chart 1 shows the stock jumping 1.62 points in heavy trading. It was one of the top percentage gainers in the S&P 500. The relative strength... READ MORE
VALUE VERSUS GROWTH... I recently wrote about rotation from small cap stocks to large caps. Not only are investors shifting from smaller to larger stocks, but there's a recent preference for value stocks over growth stocks in both categories. Chart 1 plots a ratio of small cap value... READ MORE
DOW CLIMBS TO NEW RECOVERY HIGH... Blue chip stocks continue to do better than the Nasdaq market. The Dow gained 15 points today to hit another recovery high for the year. Most other stock indexes also closed higher. Big board breadth was positive. The Nasdaq market lost 3 points and... READ MORE
DOW OUTPERFORMING THE NASDAQ... Over the past few weeks I've spoken about several rotations that are going on within the stock market. One of the most obvious is the new preference for industrial stocks over technology stocks. That can be seen in Chart 1 which plots a ratio... READ MORE
WEEKEND SADDAM HUSSEIN CAPTURE... Monday's market reactions resulting from the weekend capture of Saddam Hussein are reasonably predictable. Stocks are expected to trade higher while bonds are expected to drop. That's in keeping with their normal inverse relationship. The dollar is expected to rise which will... READ MORE
STOCKS SUFFER REVERSAL DAY... Two things happened today. Neither one was a big surprise. Stocks opened higher on news of Saddam Hussein's capture over the weekend. By day's end, the initial euphoria had faded. In fact, stock averages suffered downside reversal days on relatively heavy volume.... READ MORE
ENERGY PRICES HAVE TURNED UP... Last week, natural gas prices rose to a six-month high. This week crude and heating oil followed suit. A surge on Friday pushed all three energy markets higher. Natural gas was the strongest and gained 9%. Crude oil jumped $1.19 to close over $33... READ MORE
DOW CLOSES OVER 10K... The 15-minute bar chart shows the Dow finally crossing the 10,000 psychological barrier today. It crossed above that threshold just after 2:00 pm and withstood some selling late in the day to close 10008. That's not much of a penetration, but it... READ MORE
CRB INDEX REACHES POSSIBLE RESISTANCE AT 1996 PEAK... The CRB Index of 17 commodity markets is in the midst of a major uptrend. We've pointed that out several times over the past year. Most commodity markets have participated in the rally -- as have common stocks tied to... READ MORE
DEFLATION THREAT HAS PASSED... The Fed left rates unchanged today and left the main part of their statement intact. One change it did make, however, related to the standoff between the forces of deflation and inflation. Up to now, the Fed has maintained that deflation was a bigger threat than... READ MORE
FALLING DOLLAR CONTINUES TO BOOST COMMODITIES... Anyone who doubts the fact that commodity prices trend in the opposite direction of the U.S. Dollar need only compare Charts 1 and 2. They show the major upturn in the CRB Index at the start of 2002 coinciding with the major downturn... READ MORE
NOT GOOD FOR MARKET WHEN ENERGY IS LEADING... With the stock market looking tired at current levels, it's not a good sign to see energy shares take the top leadership spot for the week. Historically, the stock market tends to sag when the energy sector takes a leadership... READ MORE
OPEC LEAVES QUOTAS ALONE... OPEC has decided to leave their oil quotas alone. Energy prices are trading higher today. Recent OPEC statements suggest that higher oil prices are in store. With oil prices at the top of the OPEC trading band, some increase in production would normally be expected to... READ MORE
ENERGY ETF BREAKS OUT... After lagging behind the rest of the market for the past year, the energy sector finally got energized today. In a generally listless trading day, the Energy Select Sector SPDR jumped over 2% and was by far the day's standout performer. Chart 1 shows... READ MORE
NASDAQ AND DOW REACH PSYCHOLOGICAL NUMBERS... The Dow and the Nasdaq have reached important round numbers -- 2,000 for the Nasdaq and 10,000 for the Dow. Although round numbers do carry psychological importance, the 2000 number carries less chart importance than 2098 for the Nasdaq. Chart 1 shows... READ MORE
VOLUME PICKS UP... Traders apparently decided to lock up some profits at the Nasdaq 2,000 level. The daily chart shows the Nasdaq hitting an intra-day high of 2000.90 today before losing almost twenty points. That downside reversal day was also accompanied by the heaviest trading in a month.... READ MORE
S&P 500 RESUMES UPTREND... The S&P 500 is now trading at the highest level in more than a year and is reflective of a strong start to the month of December, which is traditionally the strongest month of the year. Strong economic data is boosting global... READ MORE
PAPERS AND CHEMICALS LEAD CYCLICAL RALLY... Today's report that U.S. manufacturing saw the biggest gain in twenty years gave another big boost the economically-sensitive cyclical and basic material stocks. Two of today's strongest cyclical groups were the chemicals and papers. Charts 1 and 2 show... READ MORE
PRETTY TYPICAL ACTION... Two events made today's action pretty typical. One was that the market finished higher. That's pretty typical for Thanksgiving week. The second was that volume was light. That's also typical for the day before and after the holiday. Despite the light... READ MORE
LEADING SECTOR FOR THE DAY... The Materials Select Sector SPDR was the top performing sector for today. Chart 1 shows that the XLB jumped sharply and is trading at a new closing high for the year. The rising relative strength line along the bottom of the chart shows continuing leadership... READ MORE
DOLLAR RALLIES AGAINST THE EURO... The dollar is having a good day against the Euro. Chart 1 shows that the Euro is having its biggest daily drop in three weeks. While this doesn't reverse the uptrend in the Euro (and the downtrend in the dollar), it is setting... READ MORE
DOLLAR BOUNCES, COMMODITIES DROP... The dollar had its biggest gain in three weeks. Chart 1 shows the Euro falling today from a short-term overbought condition. The dollar also bounced against the yen. With all the attention focused on recent dollar weakness, today's rebound in the greenback had a... READ MORE
WEEKLY MOMENTUM IS WEAKENING... Even with a modest Friday bounce, the market suffered its second losing week in a row. A glance at the weekly bars for the Dow in Chart 1 shows that this is the first consecutive weekly losses since before the bull leg began last Februry. Volume... READ MORE
GE HITS FIVE-WEEK HIGH... General Electric is climbing today and is the most-actively big board stock. That's a good combination. Its chart action is also encouraging. The daily bars in Chart 1 show GE bouncing off its 200-day moving average this week. Its price climb over the past... READ MORE
EURO JUMPS TO RECORD AGAINST THE DOLLAR... The Euro surged 1.80 today and exceeded its May/June high. That put the European currency at a new record high against the dollar. While that was bad for the dollar, it was good for gold. Bullion climbed $6.10 to close... READ MORE
NIKKEI FALLS BELOW 10,000... Today's selling started in Asia. The biggest drop came in Japan with a 3.7% loss. Hong Kong fell 1.7%. In Europe, French and German stock markets lost an average of 3%. Chart 1 shows the Nikkei breaking chart support at its... READ MORE
NASDAQ 100 LEADS FRIDAY DECLINE... A glance at the stock table on the Stockcharts.com homepage shows that the Nasdaq 100 lost 2.2% on Friday to lead the end of week selloff. That decline contributed to a 1.9% drop in the Nasdaq Composite, which made it the weakest... READ MORE
DRUGS BOUNCE SHARPLY... Drug stocks led an impressive bounce in the healthcare sector. Chart 1 shows the AMEX Pharmaceutical Index jumping to a two-month high. The DRG is also back over its key moving average lines. The relative strength line under the chart has been dropping for the last six... READ MORE
S&P 500 RETRACES 38% OF BEAR TREND... One of the ways we arrive at upside targets is to identify percentage retracement levels. The most popular percentage retracement of a previous trend is 50%. Professional technicians also place importance on Fibonacci retracements of 38% and 62%. It's... READ MORE
CRUDE JUMPS $1.55... Energy prices spiked higher today. Heating oil gained 4.84 points to lead the advance. Crude oil futures prices jumped $l.55 to close back over $30. That doesn't really change the overall direction of oil, which has been trading sideways for months. To... READ MORE
SOX LEADING STRONG TECHNOLOGY SECTOR... The Semiconductor (SOX) Index is the day's strongest group and is making technology the day's leading sector. Four of the top five percentage tech gainers are in the chip group -- Altera, Applied Materials, National Semiconductor, and Xilinx. AMAT, NSM, and... READ MORE
STRONG ECONOMIC REPORTS BOOST STOCKS... All the major stock averages have hit new highs for the year, thereby keeping their uptrends in intact. A couple of stronger-than-expected economic reports had a predictable effect on the various markets. Stocks and the dollar were strong, while bonds and commodities were weak. Leadership... READ MORE
MATERIALS LEAD OCTOBER'S GAINS... Anyone whose been reading our market messages over the past month shouldn't be surprised to find out that Basic Materials were the strongest market sector for the month of October. Materials gained 9.7% for the month followed by a 9.1%... READ MORE
BUYING INDUSTRIAL METALS... A big reason why commodity markets have been rallying so much this year is the result of buying by China. Investors Business Daily's commodity page this morning carried the headline "Soybeans Soar on Chinese Buying". Soybeans are trading at the highest level in... READ MORE