* US Equities remain short-term overbought * Yield curves starting to steepen (decline) * All bond maturities are at critical trendlines * Dollar about to break down? * Gold about to break out? US Equities Earlier in the week I indicated that several short-term indicators such as the Price Percentage Oscillator(PPO) using an 8/... READ MORE
BANK STOCKS HAVE STRONG DAY ... Financial stocks led a strong day in stocks. Several big bank stocks had big chart days. The daily bars in Chart 1 show Bank of America (BAC) surging more than 3% in heavy trading. It's also testing its 50- and 200-day moving averages.... READ MORE
DOLLAR FALLS WITH U.S. RATES... U.S. interest rates have been dropping on reduced expectations for a Fed rate hike this year. Chart 1 shows the 2-Year Treasury Yield falling yesterday to the lowest level in three months. That's important because that shorter term yield is more... READ MORE
* The 8/16 PPO for the SPX is overbought * Nasdaq is running into major resistance * The HYG experiences a false upside breakout and a bearish shooting star The week before last, I drew your attention to the fact that since the August sell-off recent market gyrations had been truncated in... READ MORE
PERCENT OF STOCKS ABOVE MOVING AVERAGE LINES TURNS UP ... Breadth indicators continue to show marked improvement. My Wednesday message showed the percent of NYSE stocks above their 50-day average turning up. I stated that it needed to climb above 50% to turn its trend higher. The blue line in Chart... READ MORE
* The primary trend in the dollar is still bullish but.. * Broad momentum measures of the dollar are negative * Euro is caught between two possible scenarios The US Dollar Index ($USD) has been in a trading range for several months and may be about to break out, but which way? The... READ MORE
ENERGY SECTOR MAY BE BOTTOMING... Global stocks continue to bounce off important support levels. One of the supporting factors is new strength in commodity-related energy and material stocks. I've written previous messages on new signs of strength in commodity markets -- especially copper and energy. My August 27... READ MORE
EMERGING MARKETS LEAD GLOBAL RALLY ... Stocks around the world are continuing the rally that began Friday after the very weak U.S. jobs report. Part of the reason for the renewed optimism may be the belief that the weak job report took a Fed rate hike off the table for... READ MORE
* 8/16 PPO triggers a buy signal for the S&P Composite * Resource-based stocks showing signs of improving relative action * Bonds experience an exhaustion day Earlier in the week I noted that the market was getting pretty close to the August lows but that the indicator that I usually... READ MORE
BOND YIELD PLUNGES... This morning's dismal jobs report pushed Treasury prices sharply higher and bond yields lower. Chart 1 shows the 10-Year Treasury Note Yield plunging to the lowest level since August. Treasury bond prices saw the biggest gains, while investment grade corporate bonds also bounced. High yield... READ MORE
* Test of the August 24 intraday lows is at hand * Junk bonds complete 3-year top * Credit spread may be leading the Dollar Index higher * The yields on short-term treasury maturities may be peaking Testing the lows Normally I like to use the KST to determine when momentum has reversed direction.... READ MORE
BOND ALIGNMENT SHOWS CAUTION ... Money has been flowing into the relative safety of bonds as stocks prices have slid. That money hasn't been flowing equally into all bond categories however. Most of the money has been flowing into Treasury bonds which are the safest of all. Investment Grade... READ MORE
BIOTECHS CONTINUE TO TUMBLE... Biotechs have gone from market helpers to market hurters. The daily bars in Chart 1 show Biotech iShares (IBB) falling to the lowest level since August, and the lowest closing price in more than six months (in very heavy trading). The IBB lost 13% on the... READ MORE
It’s no secret that I have been bearish on the equity market for some time. Nevertheless, it's always a good idea to remain flexible and look at all angles, so at Tuesday's webinar Greg asked me a great question. What would need to happen to... READ MORE
AUTOS AND BIOTECHS WEAKEN ... Two groups that had recently held up better than others have experienced heavy selling this week. Chart 1 shows the Dow Jones Automobile Index falling back below its 50-day line. Its relative strength line (top of chart) has started to weaken as well. Volkswagen has lost... READ MORE
FED DECISION TO LEAVE RATES ALONE SHAKES MARKETS ... I'm not sure what the Fed said on Thursday that got everyone upset. It acknowledged weakness in foreign markets (like China) and low inflation. We already knew about plunging Chinese stocks and weak commodity prices. Even so, markets took a... READ MORE
RETEST OF AUGUST LOWS LIKELY... The short-term bounce that started nearly a month ago appears to have run its course. That suggests that a retest of the August low is more likely. I recently applied Fibonacci retracement lines over the Dow Industrials to show where new selling might appear. Chart... READ MORE
* Thursday’s action represents a bearish Pinocchio bar. * Long-term indicators remain bearish. * Will Friday’s trading have a silver lining? Thursday’s Pinocchio bar In last week’s article I pointed out that several market averages had experienced bearish engulfing patterns and that a test of the lows was likely.... READ MORE
INITIAL REACTIONS... The Fed left short-term rates unchanged today. The two main reasons given were lower inflation and weakness in foreign markets. Ms. Yellen, however, stressed in her press conference that the U.S. economy still looked solid and that a rate hike by yearend was still possible. Not surprisingly,... READ MORE
CHINESE STOCKS REBOUND ... Emerging markets are getting some relief from a rebound in China. Hong Kong stocks are up 511 points (2.3%) while Shanghai gained 147 points (4.9%). Chinese ETFs are also bouncing off important support levels while in a deeply oversold condition. Chart 1 shows HongKong iShares... READ MORE
BOND YIELDS SURGE ON CONSUMER SPENDING... Today's jump in bond yields is being attributed to gains in consumer spending. Chart 1 shows the 10-Year Treasury Note Yield ($TNX) climbing above its 50-day average to the highest level in a month. When yields rise, bond prices fall. Chart 2... READ MORE
* Consumer sentiment flags a sell signal * Short rates rise before commodity prices do. That's not supposed to happen. * TIPS break key support The biggest question in financial markets this week is "will she or won't she?". The ”she” in this case is Janet Yellen... READ MORE
HOMEBUILDERS CONTINUE TO GAIN ... This is the latest of several positive messages written herein on homebuilders and housing stocks in general. Homebuilders were one of the strongest stock groups on Friday. More importantly, they're also the strongest group over the last month and the last three month periods.... READ MORE
* S&P engulfing pattern hints at downside pressure to come * Guggenheim asset ratio continues to signal money outflow * EEM give indications of a better short-term performance to come * BOJ so far fails the inflation test US Equities short-term The recent wild swings in the market may look random in... READ MORE
KLA TENCOR IS SPX LEADER... Relative strength in an individual stock during a downside correction is a positive sign. Today, I'm looking at some individual stock leaders who also happen to be in groups that are also showing relative strength. KLAC Tencor (KLAC) is the day's... READ MORE
JAPANESE STOCKS BOUNCE OFF MAJOR SUPPORT LINE... Japan was the only country that didn't participate in yesterday's global stock rally. It's making up for that today in a big way. And at a good time. I've been showing a lot of global... READ MORE
EMERGING MARKETS BOUNCE OFF CHART SUPPORT... Within the exception of Japan, global stocks are bouncing nicely today. It started in Asia with a rebound in Chinese stocks. That gave a much needed boost to emerging markets. And it may be coming just in time. The monthly bars in Chart 1... READ MORE
BANKS BOUNCE OFF CHART SUPPORT... I've explained in previous messages that I lean toward the view that the stock market is in the midst of an overdue correction. It's been four years since the market saw a correction of more than 10%. That's much... READ MORE
WHAT'S THE DIFFERENCE? ... There's a debate in professional circles as to whether the stock market is in a correction or a bear market. It makes a difference. Let's define what they are. A stock market "correction" is a drop of more than... READ MORE
* Right shoulder rally is a work in progress. * Dollar Index showing some technical cracks. * Gold breaks out against stocks. Last week I pointed out that the S&P 500 ($SPX), along with several other averages, had experienced a bullish exhaustion day. That fact, along with an excessively high reading... READ MORE
S&P 500 STALLS WELL BELOW SUPPORT BREAK... Chart 1 shows the S&P 500 with a big support break at 2040 and some serious volatility over the last two weeks. Notice that the index fell over 10% and then bounced with a 5+ percent surge back to... READ MORE
3 STRIKES AND A TREND CHANGE... Link for today's video. There has certainly been a lot of noise the last two weeks and this makes it a good time to look at some weekly charts for a little perspective. We will start with the S&P 500... READ MORE
CHINESE STOCKS REBOUND... Global stocks opened higher this morning from deeply oversold conditions. In many cases, those rebounds have also taken place from potential support levels. Chinese shares in Hong Kong and Shanghai jumped 3.6% and 5.3% respectively. That also relieved selling pressure around the globe. While it&... READ MORE
DOW TRIES TO HOLD LAST OCTOBER'S LOW... My Saturday message suggested that U.S. stock indexes could drop to last October lows; but that those lows should hold if this is just a market correction (and not a major top). Chart 1 shows the Dow Industrials trying to... READ MORE
* Monday’s action suggests a short-term rally is in the cards. * Action by the S&P 48-month ROC argues for a bear market. Catching a falling knife with your bear hands is never fun. Sorry, Freudian slip. Should be bare hands! I am not going to try to call... READ MORE
GRAY MONDAY REARS ITS UGLY HEAD... Stocks are in the midst of a global rout that is turning into another Black Monday - of sorts. So far, there have been three Black Mondays in stock market history. The first was on October 28th, 1929, when the Dow fell 13%. This... READ MORE
AN ELLIOTT WAVE UPDATE ... My market message from July 9 offered my Elliott Wave analysis of the NYSE Composite Index. Chart 1 is an updated version of that view. The five red numerals show a five-wave advance from its 2011 bottom. My view was that the May peak in the... READ MORE
EW S&P 500 ETF CONFIRMS REVERSAL PATTERN... Programming Note: We are having technical difficulties with the screen recording software and there is no video today. I apologize and will get it fixed this weekend. The Equal-Weight S&P 500 ETF (RSP) is a good ETF to use... READ MORE
* McClellan Volume Model for NASDAQ goes bearish. * EEM breaks down from a major top. * Chinese equities are right on the brink. The last time I wrote about equities, two weeks ago, I pointed out the dearth of breadth. I also mentioned that following the end of the 'bullish end-of-the-month&... READ MORE
FTSE ALL WORLD INDEX FALLS TO SEVEN-MONTH LOW... Global stock selling is intensifying. Big losses are seen in developed and emerging markets in Asia, Europe, and the Americas. And more technical damage is being done. Chart 1 shows the FTSE All World Index (which includes the U.S.) falling below... READ MORE