MATERIALS SELECT SECTOR SPDR HITS NEW HIGH... Earlier today I talked about how rising industrial metal prices (and commodity prices in general) were giving a big boost to basic material stocks and were keeping them in a market leadership role. That trend was evident again today as the Materials Select... READ MORE
FED STILL SEES RISK OF DEFLATION... The bond and stock markets seemed to like the Fed's statement today. It offered a balanced view of things without leaning too far in either direction. It repeated the theme that deflation remains a bigger threat than inflation. Bond traders liked that.... READ MORE
STILL ON NASDAQ ALERT... Last Thursday, I talked about how the Nasdaq was beginning to look toppy -- owing primarily to the size of its yearlong advance, its proximity to major resistance near 2000, and the fact that its weekly indicators were overbought. I also talked about keeping an eye... READ MORE
NIKKEI LOSES 5%... The Japanese stock market had its biggest percentage loss in two years. Chart 1 shows that the Nikkie 225 fell 554 points last night to break its 50-day moving average by the biggest margin in six months. The Hang Seng Index lost 4%. That got the day... READ MORE
AMAZON FORMS POSSIBLE ISLAND TOP... Big losses in Amazon.com and Merck are leading a market correction in morning trading. AMZN has gapped down almost four points in active trading. Combined with an upside gap formed two weeks ago, a potential "island reversal" has formed on the daily... READ MORE
HONG KONG MARKET HITS NEW TWO-YEAR HIGH... Over the first three quarters of this year, Asia has been the strongest region of the world. Within Asia, China has been the main powerhouse. One sign of that has been the relative strength in the Hong Kong market. Chart 1 shows the... READ MORE
THE NEW BOOK IS DONE... I spent this morning at my publisher in New York getting a final look at the pages for my new book on intermarket analysis. I'm happy to say that the book is totally done and should be available by the start of the... READ MORE
HONEYWELL IS DOW'S STRONGEST STOCK... Honeywell is the Dow's top percentage gainer today. Chart 1 shows the stock moving up to challenge its September high near 30. A close above that chart barrier would register a new 52-week high. The relative strength line along the bottom... READ MORE
T-NOTE YIELDS OVER 50-DAY AVERAGE... The yields on T-bonds and notes are continuing to rise. A couple of weeks ago the 10-year T-note yield was testing its 200-day moving average. It bounced off that line and has now risen back over its 50-day average. When yields are rising, prices of... READ MORE
MARKET A LITTLE OVERBOUGHT... Today's pullback isn't too surprising giving the fact that several of the major market averages are somewhat overbought. Charts 1 and 2 show essentially the same picture on two of today's more actively-traded indexes. The Nasdaq 100 Shares touched their... READ MORE
BANK INDEX HITTING 52-WEEK HIGH... Strong action in banking stocks is making the financial sector the day's leading group. Chart 1 shows the PHLX Bank Index moving to a new 52-week high today. Even more impressive is the ability of the BKX to rise above the highs formed... READ MORE
CRUDE OIL REACHES $32... A combination of low supplies this week, and the onset of colder weather, has given a strong boost to the entire energy complex. Nearby crude oil plrices jumped 96 cents today to close just shy of $32. Chart 1 shows that crude oil prices are approaching... READ MORE
NASDAQ HITS NEW HIGH... Jobless claims dropped much more than expected; the drop was the biggest in eight months. That's reminiscent of last Friday's strong jobs report. And the market's reactions are the same. Stocks are higher, bonds are lower; in addition, a bouncing... READ MORE
RUSSELL 2000 REACHES NEW HIGH... Our earlier update showed the small-cap Russell 2000 moving up to a new recovery high this morning. I take that as a positive sign for the market. That's because leadership by small cap stocks is the historical norm when an economy is recovering... READ MORE
LEADING A RECOVERY... Earlier today, I pointed out that small caps and technology stocks were leading an upside breakout in the stock market. That's a good sign, because leadership by those two groups is usually seen in the early stages of an economic recovery. I've also... READ MORE
ALCOA GAINS ON STRONG EARNINGS... A strong earnings report last night boosted Alcoa today and made it day's strongest Dow stock. Chart 1 shows the big aluminum stock climbing on rising volume today. The stock isn't too far from a new 52-week high. The rising relative... READ MORE
DOLLAR FALLS BACK TO YEARLY LOW... A strong jobs report last Friday produced a bounce in the Dollar Index off its June low. It fell heavily today, however, and is within striking distance of this year's low again. Chart 1 shows that the rally in the Dollar Index... READ MORE
EMPLOYMENT NUMBERS SURPRISINGLY STRONG... Today's employment report was much stronger than expected. It showed job growth for the first time in eight months. And, the unemployment figure was unchanged. The immediate market reactions are predictable. Stocks are opening sharply higher. Breadth figures are extremely strong. The S&... READ MORE
GOLD PLUNGES $15... Our morning comment talked about how the strong stock market bounce and a firming dollar was causing some profit-taking in gold shares. That profit-taking has gotten much heavier owing to a $15 drop in the price of gold (Chart 3). Gold is trading below initial chart support... READ MORE
NASDAQ LEADS MARKET RALLY... It seems to always come back to the Nasdaq market. That's because the Nasdaq usually leads the market in both directions. That's shown by the relative strength line plotted along the bottom of the chart. That line is a ratio of the... READ MORE
REIT INDEX HITS NEW HIGH... The Dow Jones REIT Index just recently rose above its previous high reached in the spring of 2002. The $DJR bottomed last October along with rest of the market and really started to gain ground during March as the rest of the market turned higher.... READ MORE
HOMEBUILDERS JUMP ON GOOD VOLUME... Our earlier update today talked about falling bond yields giving a boost to homebuilding stocks and showed KBH turning up. Charts 1 and 2 show two other homebuilders that had very good days. Centex and PHM both broke out of trading ranges on heavy volume.... READ MORE
SUN LEADS NASDAQ LOWER... Sun Microsystems is the most actively-traded Nasdaq stock this morning. And it's price has plunged. Chart 1 shows the stock gapping down to the lowest level in five months. It's also fallen beneath both moving average lines. The stock is now threatening... READ MORE
QQQS SLIP UNDER 50-DAY LINE ON VOLUME... Nasdaq 100 Shares (QQQ) led the market lower again today, reflecting continuing weakness in the technology sector. Chart 1 shows the QQQ closing beneath its 50-day average for the first time in seven weeks. Volume picked up again today as prices fell. Notice... READ MORE
GOLD BACKS OFF FROM FEBRUARY HIGH... On Thursday morning, gold broke briefly through its February high at $390 to hit the highest level in seven years. Unfortunately, it couldn't hold the gain. By day's end, gold had gone from a $5.00 advance to a $2.... READ MORE
OIL BOUNCE HELPS ENERGY STOCKS... OPEC announced a surprise 3.5% cut in production. That's boosting oil prices 90 cents in morning trading and is causing a bounce in oil shares. The energy sector is up 1% and is the only sector in positive territory today. The Oil... READ MORE
CRUDE JUMPS 1.3% ON SURPRISE OPEC CUT... OPEC surprised everyone today by announcing a 3.5% production cut to take effect on November 1. That set a positive tone for energy stocks, but contributed to a down day in the rest of the stock market. Combined with the plunge... READ MORE
DOLLAR PLUNGES TO 3-YEAR LOW AGAINST YEN... As we discussed last week, the weekend G7 meeting called for flexible exchange rates and less intervention by central bankers to keep their currencies from rising. The most dramatic result is being seen in the Japanese yen, which has jumped to the highest... READ MORE
YEN HITS THREE-YEAR HIGH AGAINST THE DOLLAR... Market forces usually win out over market intervention in currency markets. I wrote that statement back on August 29 in a bullish forecast for the Japanese yen. [If you haven't already done so, please read my August 29 Market Message entitled... READ MORE
MIRCOSOFT BREAKS THROUGH MAJOR RESISTANCE... Yesterday IBM broke through some formidable resistance. Today it was Microsoft. The stock rose 1.56 on rising volume to make the Nasdaq's most-actives list. The weekly bars in Chart 1 shows MSFT breaking through the high reached during the fourth quarter of... READ MORE
BANKS AND BROKERS ARE STRONG... The Financial sector is up over 1% today and is the day's strongest group. Chart 1 shows the Financials Select Sector SPDR hitting a seven-week high this morning and moving up to challenge the summer highs. Earlier in the week we showed that... READ MORE
TRANSPORTATION LEADERS... Today's strength in transportation stocks is coming from air freight, rails, and truckers. The top transportation gainer today is CNF Transportation. Chart 1 shows that stock soaring to a new six-month high on massive volume. Yellow Corp is getting close to an eleven-month high. Burlington Nortern... READ MORE
MARKET AVERAGES RESUME UPTRENDS... All the major market averages hit new 52-week highs today to keep their uptrends intact. As has been the case throughout most of the rally since March, the Nasdaq 100 is leading the market higher. It did so again today. Chart 1 shows the Nasdaq 100... READ MORE
TOBACCO STOCKS JUMP... A favorable court ruling sent tobacco stocks sharply higher and made them the day's top performers. The strongest performance was seen in RJ Reynolds. RJR surged to a new six-month high on massive volume. Altria also gapped higher on strong volume. Chart 1 Chart 2... READ MORE
LOWEST CORE INFLATION IN 37 YEARS... This morning's report on consumer inflation showed that the core CPI rose only 0.1% during August. The annual rate of 1.3% was the lowest since 1966. That drop in inflation should keep the Fed from doing anything with interest rates... READ MORE
FED LEAVES RATES UNCHANGED... The Fed did nothing today and the market liked it. The Fed statement was basically unchanged from the prior one and once again emphasized the threat of lower inflation. That meant that the Fed would hold short-term rated down indefinitely. This morning's report that... READ MORE
BOND YIELDS DROP WITH THE DOLLAR -- THE EURO RISES... This morning's report of a drop in consumer confidence has boosted bond prices and caused selling in stocks. When bond prices rise, yields fall. Chart 1 shows the 10-year T-note yield falling under its 50-day average for the... READ MORE
BASIC MATERIAL LEADERSHIP... Basic material stocks led a Friday stock market bounce. Chart 1 shows the Materials Select Sector SPDR scoring a nice uptick on Friday. Its relative strength has shown continuing leadership since mid-July. While the daily chart pattern still has a positive look to it, the weekly bars... READ MORE
DOW HOLDS 20-DAY LINE... All the major stock averages closed higher today. Breadth was positive. The Dow Industrials managed to hold its first line of support at the 20-day moving average which sits at 9429. However, volume was very light. One of the more encouraging moves within the Dow today... READ MORE
SOX IS OVERBOUGHT SHORT-TERM... The Semiconductor (SOX) Index is the down 3.9% today and is the weakest part of the technology sector. That's due mainly to a short-term overbought condition as reflected in Chart 1. After recently hitting a new 52-week high, the 14-day RSI line for... READ MORE