* World markets are just below key resistance * Junk bonds break through their 200-day MA. Will the break hold? * World Bond Index breaks to the upside Last week I called for some corrective action in the US equity market based on what, at the time, appeared to be a couple of... READ MORE
U.S. DOLLAR FALLS TO FIVE-MONTH LOW ... Yesterday's dovish statement from the Fed that it was scaling back plans to raise short-term rates had the dual effect of pushing interest rates and the dollar lower. Chart 1 shows the Power Shares Dollar Index (UUP) falling to the lowest... READ MORE
FED SCALES BACKS 2016 RATE CUTS... The Fed left rates unchanged as expected. However, it also scaled back any potential rate hikes for this year. Previous estimates of three or four possible hikes were lowered to two. It also sounded more cautious on the global economy. Initial market reactions were... READ MORE
A LOT OF 200-DAY LINES ARE BEING TESTED OR EXCEEDED... Major stocks indexes in the U.S. are moving up to challenge their 200-day averages. Those are important tests because the 200-day line is the measure most used by chartists to distinguish uptrends from downtrends. A number of group indexes... READ MORE
PERCENT OF NYSE STOCKS ABOVE 50-DAY AVERAGE REACHES TWO-YEAR HIGH... The debate continues about whether the stock market faces the likelihood of another downleg. Several technical indicators seem to suggest that a major selloff is unlikely. Here's the first one. I recently showed the NYSE percent of stocks... READ MORE
* Inflection point for junk bonds? * Fake out rally a la 2008? * Short-term oil rally over? Inflection point for junk bonds? It has been a feature of this bear market that stocks sell off in concert with junk bonds and oil prices as investors fret over potential energy company defaults. Not... READ MORE
METALS AND MINING SPDR CLEARS 200-DAY AVERAGE ... Precious and base metal stocks are continuing their strong rally on the back of rising commodity prices. Chart 1 shows the S&P Metals and Mining SPDR (XME) trading above its 200-day average and at the highest level in five months. Its... READ MORE
LEAD INDUSTRIALS HIGHER... Economically-sensitive industrial stocks continue to show new strength. A leading industrial group is the Dow Jones US Commerical Vehicles and Trucks Index ($DJUSHR). Chart 1 shows that index climbing more than 2% today to a new three month high. It includes big percentage gainers like Joy Global... READ MORE
* Credit spreads about to turn? * A PPO that calls primary trends * Record High Indicator The market is now starting to respond positively to several bullish intermediate indicators. I still believe the main trend is down, but it seems like a good idea to look at three currently bearish indicators and... READ MORE
ALCOA AND FREEPORT MCMORAN LEAD MARKET HIGHER ... A lot of attention is being paid to the recent upturn in the price of oil and energy shares, and its potentially positive influence on the global economy and stocks. An even more impressive upturn is taking place in industrial metals and their... READ MORE
MAJOR STOCK INDEXES ARE ABOVE 50-DAY AVERAGES ... The market's short-term trend continues to strengthen. Today's strong gains have pushed all major U.S. stock indexes above their 50-day moving averages. Chart 1 shows the Dow Industrials trading at a two-month high, with a good shot at... READ MORE
BOND YIELDS ARE STILL LOW... I recently showed the 10-Year Treasury Bond Yield ($TNX) bouncing off an "island reversal" bottom formed a couple of weeks ago (see circle), and pointed out that pattern usually signals a "short-term" change in direction. Chart 1 shows the TNX moving... READ MORE
SHORT-TERM TREND STILL UNCERTAIN... Stocks opened lower with oil today, but are trying to stabilize with the commodity in afternoon trading. Chart 1, however, shows a somewhat neutral picture for the market's short-term trend. After successfully testing its January low earlier this month, the S&P 500... READ MORE
* Intermediate rally/consolidation for US equities still on the menu * Test of the lows is likely first * Emerging markets continue to look vulnerable * Gold showing strong technical signs The Intermediate Rally/trading range The intermediate rally possibilities, which I have been discussing for several weeks, is still a probability. That’... READ MORE
DOW IS THE FIRST TO CLEAR FEBRUARY HIGH ... A strong Monday stock rally pushed U.S. stock indexes right up against initial overhead barriers at their early February peak and 50-day averages. Chart 1 shows the Dow Industrials being the first to exceed its February high. It is still, however,... READ MORE
NYSE COMPOSITE INDEX TESTS RESISTANCE... Stocks had their best week of the year. While that's encouraging, they'll have to do a lot more to signal that the global correction/bear market has run its course. I'm focusing on the NYSE Composite Index (NYA) today... READ MORE
* Five days of Armageddon * Does the British market still lead the US market Five Days of Armageddon For some time, I have been drawing your attention to the fact that many intermediate indicators have been flashing buy signals that even in primary bear markets have triggered some kind of a... READ MORE
S&P 500 NEARS TEST OF FEBRUARY HIGH ... My weekend message suggested that stocks had put in a short-term bottom. We'll find out soon enough if last week's bottom was even more significant. Chart 1 shows the S&P 500 Index nearing a test... READ MORE
* World breadth series signal that global equities are ready to advance * Dollar faces an important technical test Sometimes when the market declines, things actually improve, and that’s what may have been happening this week. In my most recent article, Intermediate Indicators Signal a Rally but Remember It’s a... READ MORE
MARKET BENDS BUT DOESN'T BREAK... It looked on Thursday like the major U.S. stock indexes were on the verge of closing below their January lows. A Thursday afternoon rebound, however, followed by a 2% gain on Friday kept those support levels intact. Chart 1 shows the Dow... READ MORE
TREASURY YIELDS FALL TO THREE-YEAR ... The rapid descent in global bond yields continues uninterrupted. The 10-Year Japanese bond yield recently fell into negative territory for the first time in its history. That's helping drive sovereign bond yields lower everywhere else. Chart 1 shows the 10-Year Treasury Yield falling... READ MORE
TRANSPORTS START TO SHOW SOME BOUNCE... Transportation stocks have been one of the weakest parts of the stock market over the last year. In fact, the downtrend in that economically-sensitive group was cited several times last year as a negative warning for the economy and stock market. The daily bars... READ MORE
* Monday may have been a successful test of the January low * Five inter-market relationships break out * The 5-year yield breaks down For the last two weeks I have been pointing out that several intermediate type indicators that have traditionally signaled rallies were in a bullish mode. The problem is that... READ MORE
CONSUMER DISCRETIONARY SPDR LEADS MARKET LOWER... It's never a good sign to see economically-sensitive stocks leading the market lower. That's because they're most closely tied to investor confidence (or lack therof) in the U.S. economy. But that's what happened this week.... READ MORE
NASDAQ LEADS MARKET LOWER ... A 3% loss in the Nasdaq market is pulling the rest of the market lower. Chart 1 shows the Nasdaq Composite Index bearing down on last week's low. The Nasdaq/S&P 500 ratio (below chart) has plunged to the lowest level in... READ MORE
DOLLAR PLUNGES ... The dollar is having its worst day in months. Chart 1 shows the Power Shares Dollar Index (UUP) tumbling to the lowest level in three months. That's due partially to the recent drop in U.S. rates, falling stock prices, and weak economic news which have... READ MORE
* Global rates are in freefall * Interest-sensitive sectors will continue to improve their relative action * Two sectors that are likely to underperform The recent move by the Bank of Japan (BOJ) confirmed what rates around the world have already been doing, i.e. moving lower. In Japan’s case, some rates... READ MORE
10-YEAR TREASURY YIELD FALLS TO NINE-MONTH LOW... A seemingly strange thing happened on Friday. The Bank of Japan surprised everyone by adopting a negative interest rate for the first time by pushing its short-term rate below zero. Not surprisingly, the Japanese yen plunged 2% and Japanese stocks jumped 2.8%... READ MORE
PLUNGE IN YEN... The Bank of Japan (BOJ) announced this morning a move to negative interest rates for the first time in its history. That pushed Japanese yields sharply lower and caused the yen to plunge. Chart 1 shows the Japanese yen plunging -2% today, which is its biggest drop... READ MORE
BONDS AND UTILITIES ARE RISING TOGETHER... With the 10-Year Treasury yield slipping back below 2.00%, bond prices are rising. The daily bars in Chart 1 show the Barclays 7-10 Year iShares (IEF) nearing its January high. Rate-sensitive stocks like utilities usually rise right along with bonds. Chart 2 shows... READ MORE
STOCK INDEXES TURN DOWN ... Stocks are weakening after the Fed statement. Chart 1 shows the DJ Industrial SPDR (DIA) reversing down in late afternoon trading. It may now retest last week's low. Chart 2 shows the S&P 500 SPDRS (SPY) doing the same. Chart 3 shows... READ MORE
DOLLAR DIRECTION MAY HOLD KEY TO CRUDE OIL ... Everyone is waiting to hear what the Fed has to say today. Markets appear to hoping for a more dovish statement. Currency traders are also paying very close attention. That's because Fed policy has a big impact on dollar direction.... READ MORE
Several key short/intermediate indicators reverse from oversold conditions Gold ETF very close to violating its bear market trendline The intermediate Indicators are bottoming Internal market action in the last week is starting to confirm the possibility of an intermediate low that I laid out last week. That’s because... READ MORE
* Dow Jones Utility Average just above its secular up trendline * 2-year yield probably gave a false upside breakout signal * Three indicators to watch for an intermediate equity bottom Yesterday at the webinar Greg asked me a question that was posed by one of the attendees relating to a potential reverse... READ MORE
LONG-TERM LOOK AT CRUDE... The price of crude oil continues to drop and is bringing global stocks down with it. The monthly bars in Chart 1 show how bad the decline has been and where it appears headed. The recent decline pushed WTIC Light Crude Oil below its early 2009... READ MORE
U.S. STOCK INDEXES THREATEN 2015 LOWS ... Another week of heavy selling has pushed major U.S. stock indexes into a critical test of their 2015 lows. The first three charts tell the story. Chart 1 shows the Dow Industrials ending the week just above its late September intra-day low... READ MORE
* Erie comparisons to 1929 * Credit spreads worsen * 30-year bond yields break down prices break out When the fed raises interest rates after a long series of declines it usually signals a change in policy and the start of a new trend to higher rates. What happens, though, when the Fed... READ MORE
AUTO PARTS LEAD CYCLICALS LOWER... A week ago Tuesday (January 5), I showed a chart of General Motors falling below its 200-day moving while autos were leading the Consumer Discretionary SPDR lower. Today, the main drag on that sector is auto parts. Chart 1 shows the Dow Jones US Auto... READ MORE
* Europe, Asia and Latin America all look bearish I am not kidding. Today I went through pretty well all of the country ETF charts looking back a few years with the long-term KST. I could find only one bullish chart as displayed here as Chart 1. As you can see... READ MORE
MAJOR STOCK INDEXES ENTER CORRECTION TERRITORY... After suffering the worst start to a new year in history, the U.S. stock market has entered correction territory which is defined by a drop of 10% from its old high. The charts pretty much speak for themselves. All three major stock indexes... READ MORE