DOW NEARS RECORD HIGH ... The Dow Jones Industrial Average is the only major U.S. stock index that hasn't hit a new record. But that may be about to change. Chart 1 shows the Dow trading within 40 points of its September high. A close above that level... READ MORE
NETWORKING ISHARES TESTS IMPORTANT SUPPORT ZONE... Link for today's video. The technical outlook for IGN is deteriorating and this could have ramifications for the technology sector and Nasdaq. With a sharp decline the last five days, the Networking iShares (IGN) is testing an important trend line and support... READ MORE
QQQ SURGES TO YET ANOTHER NEW HIGH... Link for today's video. The Nasdaq 100 ETF (QQQ) stuttered with a dip on Wednesday, but got its mojo back on Thursday and Friday with a move to new highs. Weakness in semiconductor and networking stocks weighed on tech stocks the... READ MORE
TRANSPORTS HIT RECORD HIGHS AS INDUSTRIALS LAG... During the summer, we wrote about bullish signals given by the Dow Theory. That theory holds that a major uptrend is intact when the Dow Industrials and Transports are hitting new highs together. That positive event took place during August and September (see... READ MORE
TECH STOCKS WEIGH ON STOCK MARKET... Link for today's video. Weakness in the technology sector weighed on the stock market Wednesday. Chart 1 shows the Equal-weight Technology ETF (RYT) falling over 1% with a long black candlestick. I am using this equal-weight ETF to capture performance for the... READ MORE
TLT BREAKS OUT AS RATES FALL... Link for today's video. It is going to be a big week for Treasuries. First, the employment report is scheduled for Tuesday morning before the open. Even though quantitative easing seems a lock for the next three to six months, a strong... READ MORE
GOOGLE AND PRICELINE JOIN THE FOUR-FIGURE CLUB... Link for today's video. With a positive earnings report stoking the bulls, Google surged over 10% and joined the thousand Dollar stock club on Friday. Actually, the club is pretty small with only Google (GOOG) and priceline.com hitting the $1000... READ MORE
U.S. DOLLAR INDEX FALLS TO TWO-YEAR LOW... The U.S. dollar continues to weaken. Chart 1 shows the PowerShares US Dollar Bullish Fund (UUP) falling to the lowest level since the third quarter of 2011. One of the side-effects of a falling dollar is that it gives a boost... READ MORE
STOCK TRADE HIGHER WEDNESDAY MORNING... Stocks shrugged off yesterday's late selloff to trade higher this morning. Investors apparently believe that politicians in Washington can't be reckless enough to push the U.S. into default. The first three charts show the recent improvement in three major U.... READ MORE
THREE OF FOUR OFFENSIVE SECTORS ARE STILL OUTPERFORMING ... Link for today's video. The Consumer Discretionary SPDR (XLY), Finance SPDR (XLF) and Technology SPDR (XLK) are perhaps the three most important sectors in the stock market. The consumer discretionary sector is the most economically sensitive sector, the technology sector... READ MORE
SPY GAPS AND BREAKS FLAG RESISTANCE... Link for today's video. Signs of hope in Washington spurred buyers on Thursday as the S&P 500 ETF (SPY) gapped up and broke flag resistance with a big move. Technically, the gap and breakout are short-term bullish until proven otherwise.... READ MORE
OFFER TO EXTEND U.S. DEBT LIMIT... A Republican offer to extend the debt limit deadline for several weeks appears to include the compromise financial markets were hoping for. Stocks surged all over the world, especially economically-sensitive groups tied to economic growth. While all sectors are jumping today, the biggest... READ MORE
CONSUMER DISCRETIONARY SPDR BREAKS SUPPORT ... Link for today's video. Stocks are trading off their lows on Wednesday afternoon, but sharp declines on Tuesday did some technical damage and this damage has yet to be undone. It is still a tricky time for trading because any kind of breakthrough... READ MORE
NYSE BULLISH PERCENT INDEX SHOWS NEGATIVE DIVERGENCE... A number of technical indicators are showing "negative divergence" from stock market indexes. That's normally a warning sign that the underpinnings of a stock market rally are weakening beneath the surface. Let's start with the NYSE Bullish... READ MORE
METALS & MINING SPDR TESTS KEY SUPPORT ZONE... Link for today's video. The Metals & Mining SPDR (XME) fell back at the end of September, but managed to hold support in the 36 area and firm the last six days. Chart 1 shows XME hitting resistance from the... READ MORE
SPY CORRECTS WITH FALLING FLAG... Link for today's video. The S&P 500 ETF is lagging the Russell 2000 ETF and Nasdaq 100 ETF, but the long-term trend is up and the current decline looks like a correction. Chart 1 shows SPY hitting a new high in... READ MORE
U.S. STOCKS WEAKEN VERSUS FOREIGN STOCKS... My last message discussed how money was starting to rotate out of an over-extended U.S. stock market into foreign stocks which are trying to catch up to the U.S. market. This message will build on that theme by using ratio (or... READ MORE
SELLING PRESSURE HITS THE AEROSPACE-DEFENSE ETF ... Link for today's video. Defense stocks are feeling a little heat today as the government shutdown extends and the debt ceiling looms. Chart 1 shows the Aerospace-Defense ETF (PPA) falling over 1% and testing broken resistance in the 27.27.4 area.... READ MORE
REVIEWING THE VOLATILITY OF AUGUST 2011... Link for today's video. The possible government shutdown is dominating the headlines today, but gridlock could dominate for several weeks because the debt ceiling is next on the agenda. Even though the market is well aware of the situation in Washington, there... READ MORE
GERMAN DAX HITS NEW RECORD -- GERMANY ISHARES ALSO BREAKOUT... Europe has been emerging as one of the world's stock market leaders. A lot of that has to do with strength in Germany which is the region's biggest economy. The last week's impressive victory... READ MORE
IWM AND QQQ STALL AFTER MARKET LEADING SURGES... Link for today's video. While there could be some short-term headwinds for the stock market, the long-term picture remains positive with new highs in the major index ETFs this month and leadership from key groups. New highs occur in uptrends,... READ MORE
CHEMICAL STOCKS DRIVE THE MATERIALS SECTOR... Link for today's video. Know thy sector SPDR. When trading or investing in the nine sector SPDRs, it is important to know the top components because the top ten stocks in each sector account for over 40% of the sector's... READ MORE
FALLING DOLLAR IS GOOD FOR GOLD... During the Stockcharts' New York seminar over the weekend, we got into a discussion of gold. One of the attendees asked why I remained negative on gold's long term trend in the face of a declining dollar. I responded that there... READ MORE
FINANCE SECTOR AND REGIONAL BANKS WEIGH ON MARKET... Link for today's video. I wrote about relative weakness in the Finance SPDR (XLF) last week and this key sector is weighing on the market today. Banks could be under pressure because of a high level of uncertainty at the... READ MORE
CONSUMER DISCRETIONARY, INDUSTRIALS AND TECHNOLOGY SPDRS HIT NEW HIGHS... Link for today's video. Even though the finance sector is lagging the market this month, the other three offensive sectors are picking up the slack and showing relative strength. There are different ways to measure relative performance and find... READ MORE
RATE SENSITIVE STOCKS SURGE ON BOND RALLY... The Fed surprised everyone yesterday by deciding not to start its widely anticipated tapering of bond purchases. Although that decision was a surprise, market reactions weren't. In fact, each market did pretty much was one would expect. Bond yields tumbled and... READ MORE
STOCKS EXTEND UPTRENDS AFTER THE SEPTEMBER SURPRISE ... Link for today's video. The September Fed meeting has come and gone, and nothing changed, which was a surprise to most pundits. In its policy statement, the Fed decided not to taper its bond-buying program because the FOMC wants to wait... READ MORE
FINANCIALS AND INDUSTRIALS LEAD MARKET HIGHER... Link for today's video. The Finance SPDR (XLF), the Industrials SPDR (XLI) and the Basic Materials SPDR (XLB) are leading the stock market sectors with the biggest gains on Monday. Also note that XLI, XLB, the Consumer Discretionary SPDR (XLY), the Technology... READ MORE
SMALL-CAPS CONTINUE TO OUTPERFORM LARGE-CAPS... Link for today's video. September has been a good month for stocks with the Russell 2000, Nasdaq and S&P 500 advancing over 3% month-to-date (nine trading days). The Russell 2000 is the leader of the pack as small-caps continue to show... READ MORE
SHIPPING RATES SOAR AS CHINA BUYS MORE ORE... This headline is from today's Wall Street Journal (by Costas Paris and Francesa Freeman, p.C1). I'm writing about it today because it fits into comments made in my last market message about how a rising Chinese stock... READ MORE
SPY EXTENDS BREAKOUT WITH A GAP... Link for today's video. The S&P 500 ETF (SPY) ended its correction with a breakout last week and surge above 168 this week. First, I think we can all agree at the long-term trend for SPY (aka The Stock Market)... READ MORE
FOREIGN STOCKS LEAD US HIGHER -- EEM BREAKOUT... In a role reversal from the first half of the year, foreign stocks are leading U.S. stocks higher. Chart 1 shows EAFE iShares (EFA) gapping to a new three-month high today and on the verge of the highest close in five... READ MORE
XLB SHOWS LEADERSHIP WITH FLAG BREAKOUT... Link for today's video. Strength in Asia markets, which are covered below, is providing a lift to the materials sector and related industry groups. Chart 1 shows the Basic Materials SPDR (XLB) breaking above flag resistance with a surge the last six... READ MORE
HOMEBUILDER ETF BOUNCES, BUT REMAINS SHORT OF BREAKOUT - USG GAPS UP... Link for today's video. Treasury yields fell after Friday's jobs report and interest rate sensitive stocks got a bounce as utilities, REITs and homebuilders moved higher. In particular, I would like to focus on... READ MORE
BOND YIELD REACHES NEW TWO-YEAR HIGH... The weekly bars in Chart 1 show the 10-Year Treasury Note Yield ($TNX) reaching a new two-year high today and very close to breaching the psychologally important 3% barrier for the first time since early 2011. The TNX has also cleared a five-year resistance... READ MORE
SPY CHALLENGES GAP ZONE AND FIRST RESISTANCE... Link for today's video. The major index ETFs remain in short-term downtrends since early August and long-term uptrends since mid November. This short-term downtrend is a correction that is entering its fifth week and marks the third correction of the year.... READ MORE
EAFE ISHARES GAP HIGHER... The rest of the world rallied on Monday while the U.S. was closed for Labor Day. Foreign stock ETFs (which were also closed on Monday) are playing catch-up today to yesterday's gains. Chart 1 shows EAFE iShares (EFA) gapping more than 2% higher... READ MORE
DOLLAR BOUNCES OFF CHART SUPPORT AS EURO WEAKENS... Last Saturday's message showed the U.S. Dollar Index (USD) testing important chart support at its June low. Chart 1 shows the USD rising to a three week high. That's not enough to signal a major upturn, but... READ MORE
HOW MUCH CORRECTION CAN WE EXPECT FROM SPY AND IWM?... Link for today's video. The S&P 500 ETF (SPY) extended its correction with the third weekly decline in four weeks. Even though the bigger trend is still up, this correction could extend in both price and... READ MORE
SEMICONDUCTOR SPDR BOUNCES WITHIN FALLING WEDGE... Link for today's video. Stocks are rebounding today with the Semiconductor SPDR (XSD) leading the way. Chart 1 shows XSD finding support near broken resistance in the 54 area. Despite today's move, the ETF remains in a short-term downtrend that... READ MORE