* How to spot a secular reversal * Not all maturities are created equal * The near-term technical picture How to spot a secular reversal A secular, or very long-term, trend is one that exists over many business cycles or what are usually called primary bull and bear markets. They vary in length... READ MORE
TRANSPORTS START TO WEAKEN ... A number of short-term caution signals are showing up for stocks which might be hinting that the current rally is due for a pullback. Some of those caution signals are coming from relationships between the three Dow Averages. Let's start with the transports. Chart... READ MORE
U.S. HOME CONSTRUCTION ISHARES HIT NEW HIGHS... Add housing stocks to parts of the stock market that still offer value and are attracting new money. Chart 1 shows the U.S. Home Construction iShares (ITB) climbing today to the highest level in nearly a decade. That's following... READ MORE
* The Dollar Index -- primary trend * The Dollar Index viewed from the short-term trend * The euro * The yen * The Canadian dollar * Emerging market currencies Expectations were high for the US Dollar ($USD) following the election and indeed, the currency did rally for a while. However, the trend for most of... READ MORE
HEALTH CARE SPDR TURNS UP... In case you haven't noticed, the Health Care SPDR (XLV) has taken a bullish turn. Chart 1 shows the XLV breaking out of a bullish "ascending triangle" that I described in my February 4 message. At the same time, the XLV/... READ MORE
BOND YIELDS CLEAR 50-DAY LINE... Previous messages have described Treasury bond yields as consolidating within a major uptrend since mid-December . Today's jump in yields supports that view. In testimomy before Congress today, Janet Yellen warned about the danger of the Fed falling behind the inflation curve. That more... READ MORE
More stocks trading above their 150-day MA’s Last week I pointed out that many indicators were overstretched, thereby indicating the probability of a correction. I also stated that during a bull market, surprises typically develop on the upside. Consequently, if the market was able to shrug off its overbought... READ MORE
COPPER AND STEEL STOCKS RESUME UPTRENDS... Economically-sensitive industrial metals are rising again, along with stocks tied to them. The price of copper is up 3.5% today to the highest level in nearly two years. So are copper shares. Chart 1 shows the Global X Copper Miners ETF (COPX) resuming... READ MORE
* Market still overstretched * Greater selectivity as the market moves higher * Whatever happened to China? Last week, I pointed out that several indicators were pointing to a short-term correction. I also said that counter-cyclical corrections are difficult to play, essentially because they are usually over before you realize it. To quote... READ MORE
GOLD REACHES THREE-MONTH HIGH... The price of gold continues to rise. Chart 1 shows the Gold Shares SPDR (GLD) trading at the highest level in three months. It has reached a point, however, where some overhead resistance may appear. For one thing, it has retraced 62% of its November/December... READ MORE
DOW AND S&P 500 END WEEK ON A STRONG NOTE ... What started off as a soft week for stocks ended on a strong note. Friday's gain was enough to keep stock indexes basically flat for the entire week. But there was some improvement on the charts.... READ MORE
* Housing economic data is finely balanced * The long-term technicals for housing equities are also evenly matched * The bearish short-term picture could be the domino that tips everything Housing economic data is finely balanced The housing industry has not exactly been on a roll since the last recession, but it has... READ MORE
TECHNOLOGY SPDR FINALLY REACHES OVERBOUGHT TERRITORY ... One of the trends supporting the stock market rally has been a strong technology sector. That group, however, has reached overbought territory for the first time in six months and is starting to weaken. Chart 1 shows the 14-day RSI for the Technology SPDR... READ MORE
DOLLAR BREAKS SHORT-TERM SUPPORT... I keep writing about prospects for a bounce in the U.S. Dollar, and it keeps dropping. My last message showed the PowerShares Dollar Index Fund (UUP) testing chart support at its early December low. The red circle in Chart 1 shows the UUP slipping below... READ MORE
* One reliable long-term indicator is bullish * What are the short-term indicators saying? * Bottom fisher to the rescue? The long-term indicators for equities have been pointing north for quite a while. Quite often I’ll include one of those indicators in my articles as testimony to the bull, but hedge my... READ MORE
STOXX EUROPE 600 HITS 52-WEEK HIGH... My last message focused on the idea that foreign stocks were also turning up which has strengthened the global rally. My main focus was on Europe which I'm returning to today. First, the rally the stocks. Chart 1 shows the STOXX Europe... READ MORE
* Global A/D Line breaks to the upside * Post-election trends * US equities * The 10-year Yield * Gold * The Dollar Index * Commodities Global A/D Line breaks to the upside This week has seen an important breakout for equities. I am not referring to Dow 20,000 but to my Global A/... READ MORE
ALL COUNTRY WORLD INDEX HITS NEW RECORD ... The Dow Industrials finally exceeded the 20K threshold that everyone in the media has been focused on. That's puts all major U.S. stock indexes in record highs. What's also impressive is that the current stock rally is global... READ MORE
MATERIALS SPDR HITS NEW RECORD ... Chart 1 shows the Materials Sector SPDR (XLB) surging to a record high. Equally impressive is that the fact that the XLB/SPX ratio (top of chart) has turned up as well. The XLB/SPX ratio has risen to the highest level in eighteen months... READ MORE
* The current status of the US versus the rest of the world * Europe * Asia * Latin America The current status of the US versus the rest of the world Earlier in the week I pointed out that the trend of superior performance by the US against the "rest of the... READ MORE
10-YEAR TREASURY YIELD BOUNCES OFF 50-DAY AVERAGE ... The pullback in Treasury yields (coinciding with an oversold bounce in Treasury prices) may have run its course. Chart 1 shows the 10-Year Treasury Yield ($TNX) bouncing sharply off its 50-day moving average. The two momentum indicators above Chart 1 are also supportive.... READ MORE
CENTURY ALUMINUM LEADS THAT GROUP HIGHER... Aluminum stocks are leading a rally in the materials group. Chart 1 shows the Dow Jones US Aluminum Index surging to the highest level in eighteen months. Chart 2 shows Century Aluminum (CENX) looking pretty much the same. Alcoa (AA) is also having a... READ MORE
* Gauging the trend between the US and the rest of the world * Relative performance of the US is largely dependent on the direction of the Dollar * Special K is close to a relative sell signal for the US * What does “The rest of the world” look like? * A few comments... READ MORE
SMALL CAPS SURVIVE TEST OF SUPPORT... The stock market continues to trade sideways within the context of an overall uptrend. The fact that small caps stabilized at week's end is an encouraging sign (because they often lead larger stocks). At one point Thursday morning, the Russell 2000 iShares... READ MORE
SHORT-TERM MARKET TREND WEAKENS... It looks like the Dow probably won't reach the 20K on this attempt. That's because of weaker market action in other stock indexes. Chart 1 shows the S&P 500 SPDR (SPY) starting to roll over to the downside after touching... READ MORE
WHICH TRENDLINE IS BILL GROSS REFERRING TO... I've heard a lot this week about Bill Gross' prediction that a move by the 10-Year Treasury yield above 2.6% would end the secular bull market in bonds. Part of his reasoning is that a rise above 2.6%... READ MORE
* Long-term perspective * The short-term picture * The Pound against other major currencies * Watch that gold! Long-term perspective Last October, I wrote an article entitled “British Pound Headed For Par, But Not Now”. The long-term case rested on the fact that the Pound, when measured against the Dollar, had completed a 30-year... READ MORE
DOW FLIRTS WITH 20K... Let's get this out of the way first. If you've been watching business TV, all they've been talking about is the Dow nearing the 20,000 level. Much to their dismay, it came close on Friday but couldn't... READ MORE
* The long-term equity trend is bullish, but watch carefully * Short-term technicals for equities * Short-term technicals for yields and bond prices * Short-term technicals for the Dollar Index, Gold and Commodities The post-election trends I am referring to in the title refer but are not limited to, the five series plotted in... READ MORE
10-YEAR TREASURY YIELD PULLS BACK ... After the steep ascent in Treasury bond yields since the November 8 election, it's not too surprising to them pulling back a bit. There are a couple of technical reasons for that. The daily bars in Chart 1 show the 10-Year Treasury Yield... READ MORE
DOW JONES AUTO INDEX IS BREAKING OUT... For the first time in a long time, auto stocks are showing market leadership. I first wrote about the group in a December 1 message about autos leading consumer cyclicals higher. They're doing that again today. Chart 1 shows the Dow... READ MORE
* Signs of short-term exhaustion * Watch those housing ETF’s * Shanghai is down, but is it out? Even bull markets need to pause for breath as profits are digested and doubts sown concerning the validity of the prevailing trend. We may have come to such a moment. Signs of short-term exhaustion... READ MORE
* Twenty thousand, a media point on the charts * The real 20,000 event * International markets that deserve a closer look Twenty thousand, a media point on the charts For some time, our friends in the media have been touting Dow 20,000 ($INDU) as if something magical is going to... READ MORE
ADX AND RSI LINES ISSUE WARNINGS... My last couple of messages have repeated the idea that the post-election stock rally looks stretched. Last Friday's message showed the stock/bond ratio, the value/growth ratio, and the transportation/utilities ratio also in overbought territory. Momentum and seasonal factors are... READ MORE
* Three steps and a stumble * Interest rates are now driving the US Dollar * Charts for the Euro, Yen and Swiss Franc continue to erode Three steps and a stumble The late great Edson Gould coined the term “Three Steps And A Stumble”. He was referring to his observation that when... READ MORE
STOCK/BOND RATIO IS OVERBOUGHT... Several market messages over the past couple of months used relative strength ratios to paint a more bullish picture of the stock market, and a more bearish picture for bonds. While those ratios have strengthened considerably, especially since the election, I'm a little... READ MORE
FED OFFERS SLIGHTLY STEEPER PATH FOR 2017... The Fed surprised no one today one by raising short-term rates by a quarter of a point. It did, however, offer a steeper path for rate hikes in 2017. That may have caught more attention. Bond yields climbed which boosted bank stocks initially.... READ MORE
* Some key averages showing signs of temporary exhaustion * Energy burnt out? * Defensives and interest sensitives looking more positive * What about those bonds? I have been bullish on the stock market for some time and in terms of the main trend I still am. I also council on focusing on the... READ MORE
POWERSHARES QQQ NEARS NEW RECORD... A lot has been made recently about domestic-oriented American businesses leading the market rally (like small caps, retailers, and transports to name a few). And how large tech stocks have gone from market leaders to market laggards. Technology companies derive nearly two-thirds of their earnings... READ MORE
* Using Gold as a barometer for commodity prices * Gold versus other precious metals * Gold and the stock market Earlier in the week I wrote an article pointing out the fact that the Gold price ($GOLD), technically speaking, had reached, what seemed to me, to be a critical technical point. That... READ MORE