The recent rise in interest rates and energy prices is certainly a cause for concern should these trends extend in any meaningful way over the next few months. After all, we are just about to enter September, which is seasonally the worst month of the year for stocks. Following that,... READ MORE
RISING ENERGY PRICES MAY BOOST YIELDS... This week's inflation reports sent a mixed message. July's CPI came in lower while July's PPI came in higher. Bond yields, however, gained more ground. The green bars in the upper box in Chart 1 show the 10-Year... READ MORE
The 30-year yield reached its high point last October and has been rangebound since December. Chart 1 shows that it began to break out of that trading range in late July, but has yet to succeed in taking out the October high. The 14-day RSI is currently correcting from an... READ MORE
UPSIDE ENERGY BREAKOUTS...Last week's message listed energy as the strongest market sector over the last week and month. That positive trend continued this past week with some upside breakouts taking place. Chart 1 shows the United States Oil Fund (USO) trading above its April high. WTIC hasn&... READ MORE
Hi Gang. Larry Williams here. Welcome to my new stock market service called "Focus On Stocks," which I'm creating in conjunction with my friends at StockCharts.com. As a "Focus On Stocks" subscriber, you now have access to my latest market analysis. Be sure... READ MORE
There have recently been a lot of depressing stories concerning the state of the Chinese economy. Here are a spattering of headlines that appeared just today: * China's Economic Recovery Weakens as Growth Concerns Linger (WSJ) * China Manufacturing Keeps Shrinking, Weighing on Economic Recovery (Bloomberg) * More Stimulus "Desperately... READ MORE
NYSE ADVANCE-DECLINE LINE BREAKS OUT... Stocks gained more ground this week to continue their uptrend. What's helping keep the rally going is the fact that more individual stocks are joining the uptrend. Chart 1 shows the NYSE Advance-Decline line rising above several previous peaks to the reach the... READ MORE
Last April, I wrote about the SVB (SVIB) banking crisis, using the KBW Regional Banking Index ($KRX) as a proxy, and suggested the price action in the right hand part of Chart 1 had the potential to be a double bottom formation. Double bottoms are characterized by heavy activity on... READ MORE
MONEY ROTATES INTO HEALTHCARE... One of the most encouraging developments over the last month has been the rotation into formerly lagging sectors like industrials, financials, and materials. That rotation also includes this week's upside breakout in the Dow Industrials to the highest level in more than a year.... READ MORE
Last week, I pointed out that several indicators were close to triggering a bull market for commodities. Some of those benchmarks have since been met, but none have yet moved decisively in that direction. Now, it's time to take a deep dive into the copper price, as this... READ MORE
I have been bearish on the primary trend of commodities for some time whilst still maintaining a bullish stance on their secular or very long-term trend. In other words, negative over a 9-month-to-2-year outlook, but constructive on a 10-to-20-year one. The secular aspect is important, because history shows primary bear... READ MORE
ENERGY SECTOR LOOKS OVERSOLD... Energy stocks have been one of the year's weakest sectors. The daily bars in Chart 1 show the Energy SPDR (XLE) trading sideways since March and looking oversold. The XLE would need to clear its red 200-day average and falling trendline to signal a... READ MORE
There has been a notable shift in expectations concerning rate hikes going forward, as several Fed spokesmen have floated the idea of additional hikes later in the year. Rising interest rates are generally seen as a negative factor for stocks, as they increase borrowing costs for companies, lowering their profitability... READ MORE
TRANSPORTS GAIN, UTILITIES LOSE... Chart 1 shows transportation stocks rising while utilities are falling. The significance of the chart is that it suggests that investors are turning more positive. That's because stronger transports suggest a stronger economy while falling utilities show that investors are turning less defensive. Airlines... READ MORE
The ellipses in Chart 1 reflect economic events that have adversely affected the stock market since the 1950s. The pink ones reflect recessions, and those colored in blue indicate setbacks that anticipated economic slowdowns. Slowdowns develop when some economic sectors slip into recession, but that weakness is insufficient to push... READ MORE
When the direction of the primary trend changes, it's usually because the business cycle is transitioning from a slowdown or recession to a recovery. That process usually results in a change in sector rotation, as defensive ones, such as utilities and consumer staples, come to the fore and... READ MORE
MORE BROADENING OUT...Various measure of market breadth continue to improve. That includes the number of stocks moving back above their moving average lines. Chart 1 shows the Percent of S&P 500 stocks trading above their 200-day averages rising to the highest level in four months. As a... READ MORE
There used to be a rule of thumb on Wall Street that, whenever brokers upgraded to a new office after years of making do with smaller premises, it was the sign of market peak. Such behavior typically followed years of a bull market in which the investment houses had grown... READ MORE
S&P 500 TESTS AUGUST HIGH...Chart 1 shows the S&P 500 Index in the process of testing important overhead resistance at its August high (flat line). A close above that barrier would be a positive sign. The SPX has now gained 20% from its October low.... READ MORE
The price of gold was recently trading at an all-time monthly closing high. Since then, it has backed off, raising the question of whether that was "the" top or whether the subsequent short-term price decline represents a healthy digestion of previous price gains, which will serve as a... READ MORE
"The farther backward you can look, the farther forward you can see." - Winston Churchill In this exclusive StockCharts TV special, Larry is back to talk about a stock market correction ahead. There have not been any long term selling opportunities recently. However, right here & now, Larry... READ MORE
DOW PLAYS CATCH-UP... A strong May jobs report and the passing of the debt ceiling bill have combined to give a big boost to stocks at week's end. The rally has been enough to push the Nasdaq to a new 52-week high and a ten-month high in the... READ MORE
The recent strong performance by a few tech stocks has gained widespread attention, as has the disappointing market breadth. The result has been a soaring NASDAQ and a lagging NYSE Composite and Dow. Small cap stocks have also left a lot to be desired. The question is whether this divergence,... READ MORE
TALE OF TWO MARKETS... Previous messages have pointed out the growing gap between rising technology stocks and the rest of the market. That gap widened even further this week. Technology was once again the week's strongest sector thanks to surging chip stocks. The weekly bars in Chart 1... READ MORE
BIG TECH STOCKS LEAD MARKET HIGHER... The largest stocks in the technology sector saw big gains during the week. That pushed the Invesco QQQ Trust to the highest level in more than a year as shown by the weekly bars in Chart 1. Technology and Communication Services SPDRS were the... READ MORE
In the last couple of months, we have seen a number of analysts and commentators point out that the current rally has been led by a handful of large-cap tech stocks and is therefore suspect. That observation suggests this week's extension to the advance is doomed. It'... READ MORE
There has been a lot of talk recently about diversifying away from the dollar and it potentially losing its reserve status. The primary trend of the Dollar Index may be bearish, but the longer-term charts do not agree; they suggest that the dollar's death is greatly exaggerated. Let&... READ MORE
BAD BREADTH CONTINUES... Several recent messages have demonstrated poor stock market breadth. Unfortunately, that negative situation hasn't shown any improvement. One of the charts used to demonstrate that negative situation is repeated below. Chart 1 compares the S&P 500 Large Cap Index (black bars) to the... READ MORE
The other day, I was looking at the charts of stocks, bonds, and gold and remembered that the lows of 1982 were preceded by a similar setup to what we see today. History rarely repeats exactly, and there are many differences between now and then. Still, I think it'... READ MORE
BONDS YIELDS VS. THE NASDAQ...The direction of bond yields has had an impact on various intermarket relationships. One of the them is the Nasdaq market. The main point of Chart 1 is to show that falling bond yields have been good for the Nasdaq market so far this year.... READ MORE
Most of the time, when looking at equity markets outside of the US, I focus on the various country ETFs, which are denominated in dollars rather than local currencies. In some ways, this limits my perspective, since currency fluctuations can change some of the outcomes--especially in countries experiencing a high... READ MORE
MARKET ENDS WEEK ON A STRONG NOTE... Stocks gained more ground this past week with major indexes moving closer to overhead resistance levels. The market is being led higher by communication and technology stocks. As a result, the Nasdaq 100 touched a new high for the year and is leading... READ MORE
Charts have always fascinated me, so I plow through a lot of them in the course of a typical week. To me, breakouts hold a similar buzz as a striker scoring a great goal from the edge of the penalty box in soccer. To boot, I do not see any... READ MORE
MORE NEGATIVE DIVERGENCES... My message from a couple of weeks ago showed various measures of market breadth failing to keep up with the S&P 500 which suggested that the current stock rally was on weak technical footing. Unfortunately, that situation hasn't improved. A number of breath... READ MORE
Chart 1 below shows that, on a monthly close basis, gold broke out from a large consolidation formation in March. It has built on that move in the first part of April by moving slightly higher. The implication is obviously for higher gold prices, once the overbought condition laid out... READ MORE
GOLD RALLY STALLS AT OVERHEAD RESISTANCE... Gold has risen to the highest level in a year and has been attracting a lot of attention lately. Gold is traditionally viewed as a safe haven asset when investors are concerned about the state of the economy in an inflationary environment. The weekly... READ MORE
These are not my words, but those of Mr. Market, who is doing his best to let the central bank know that rates are too high. Chart 1, for instance, compares the market-driven 5-year yield to that of the Effective Federal Funds. The dashed green arrows indicate that, in 2021,... READ MORE
EQUAL WEIGHTED SPX LAGS BEHIND...Stocks were little changed on the shortened trading week and have maintained their intermediate uptrend. The black bars in Chart 1 show the S&P 500 having reached the highest level in two months. The SPX also remains above moving average lines and may... READ MORE
Global equities have risen for the last three weeks and now are at or just below key chart points. Chart 1, for instance, shows that the S&P 500 index ($SPX) is close to breaking above resistance in the form of its 2022–23 down trendline. In reality, that... READ MORE
MAJOR STOCK INDEXES HAVE A STRONG WEEK...Although the stock market's long-term trend may still be in doubt, stocks are ending the quarter on a strong note. Starting with the weakest, Chart 1 shows the Dow Industrials ending the quarter back above its 200-day moving average and in... READ MORE