A LONGER TERM VIEW OF THE EURO... Since the Euro is the best barometer of problems in the eurozone, an analysis of the European currency is crucial to any analysis of markets in that region, and global stocks in general. That being the case, a chart analysis of the Euro... READ MORE
EURO GAPS HIGHER... A pledge from the ECB president to boost the Euro has caused a strong bid in that currency and European stocks. Chart 1 shows the Europe 350 iShares (IEV) gapping nearly 4% today on the news. That strong bounce has reversed the short-term damage done earlier in... READ MORE
SMALL-CAPS AND MID-CAPS SHOW RELATIVE WEAKNESS... Link for todays video. Chart 1 shows the performance for five major index ETFs since June 4th, which is when stocks started a seven week advance. By starting at this level, we can see which ETFs are holding most of their gains and which... READ MORE
VANGUARD ALL-WORLD EX-US INDEX BREAKS SUPPORT... As has been the case since the spring, foreign shares are leading the U.S. stock market lower. More importantly, they've already broken below some short-term chart support. The Vanguard FTSE All-World Index (VEU) includes foreign developed and emerging markets. Chart 1... READ MORE
DOW BACKS OFF 13000 FOR THE SECOND TIME... Link for todays video. Stocks were down on Monday as European issues weighed on the market. Chart 1 shows the Dow Industrials hitting resistance just below 13000 for the second time this month. Resistance here is proving formidable and chartists should watch... READ MORE
SPY REVERSES COURSE AFTER LONG WHITE CANDLE AND DOJI... Link for todays video. After moving higher four of the last five days, stocks are taking a hit today as concerns in Europe bubble up. Chart 1 shows the S&P 500 ETF (SPY) moving higher since early June and... READ MORE
AUSTRALIAN DOLLAR RALLIES... Currency trends often us something about the mood of global traders, and which way they're starting to lean. In the ongoing battle between "risk-on" and "risk-off" trades, one of the markets worth keeping an eye on is the Australian Dollar. For... READ MORE
BIG TECHS LEAD MARKET HIGHER AS QQQ HOLDS UPTREND... Link for todays video. Stocks moved higher on Wednesday with the Nasdaq 100 ETF (QQQ) leading the way. Chart 1 shows QQQ surging over 1% with a move above 64. With the four day advance, QQQ formed a higher low to... READ MORE
MOSAIC REACHES FOUR-MONTH HIGH... A recent message (July 5) showed that rising grain prices owing to a midwest drought were driving up the price of fertilzier stocks. One of the stocks featured was Mosaic which is today's biggest gainer in the materials sector. Chart 1 shows Mosaic (MOS)... READ MORE
TREASURIES SURGE AFTER RETAIL SALES REPORT... Link for todays video. The commerce department reported that June retail sales dropped .5%, which was the third consecutive monthly decline. With analysts expecting a small increase, this was yet another key economic report that came in below expectations. A decline in retail sales... READ MORE
RESIDENTIAL REITS LEAD GROUP HIGHER... My Thursday message showed the Vanguard REIT VIPERS (VNQ) in the process of challenging its yearly high. Chart 1 shows the VNQ hitting a new record high on Friday. The rising relative strength ratio (above chart) show that REITS have been outperforming the S&... READ MORE
A BIG SUPPORT TEST AT HAND FOR QQQ AND DIA... Link for todays video. A disparity has opened up among the major index ETFs. The Russell 2000 ETF (IWM) surged at the end of June and remains well above its late June low. The Nasdaq 100 ETF (QQQ) and Dow... READ MORE
REITS ARE BIG DIVIDEND PAYERS ... Last Tuesday's message focused on dividend paying stock groups that usually do better in a climate of falling bond yields and an uncertain stock market. Those groups included staples, healthcare, telecom, and utilities. Don't forget about Real Estate Investment Trusts (REITS)... READ MORE
SMALL-CAPS LEAD STOCKS LOWER AFTER FED MINUTES... Link for todays video. Stocks treaded water most of the day and then got hit in the afternoon when the Fed minutes were released. Chart 1 shows the Russell 2000 ETF (IWM) falling below 79 and entering last weeks gap zone. A positive... READ MORE
S&P 500 FORMS BEARISH WEDGE ... Link for todays video. Stocks fell sharply after payrolls rose less than expected. The Labor Department reported that June non-farm payrolls rose 80,000, which was well below the consensus forecast of 100,000. Non-farm payrolls were also revised down by 1000 for... READ MORE
CORN LEADS AG MARKETS HIGHER... Agricultural commodities have been on a tear over the last month. Chart 1 shows the Power Shares Agricultural Fund (DBA) in a parabolic rise since mid-June. Most of that surge is coming from grain markets as the result of drought conditions in the midwest. Corn,... READ MORE
DEFENSIVE ETFS HIT NEW HIGHS... The stock market's short term outlook has improved since last Friday's latest Euro bailout. What has caught my attention, however, is that the strongest chart patterns still belong to defensive stock groups. Chart 1, for example, shows a new high by... READ MORE
DOW AND S&P 500 HIT RESISTANCE AT MID JUNE HIGHS... Link for todays video. Chart 1 shows the Dow Industrials with a pattern similar to the October-December surge, only smaller. The Dow surged in October, corrected in November with a sharp pullback and then surged again at the... READ MORE
HOMEBUILDING ETF ACHIEVES BULLISH BREAKOUT ... The latest Euro rescue package announced on Friday caused a sharp upturn in risk assets at week's end. Global stocks and commodities soared, while bonds and the dollar fell. The Euro and most other foreign currencies surged. Arthur Hill covered Friday's... READ MORE
EU AGREEMENTS PUSH SPANISH AND ITALIAN STOCKS HIGHER... Link for todays video. EU leaders delivered another grand announcement that moved markets all over the world. In short, EU leaders agreed to form a banking union in the future. They also agreed to support sovereign debt markets in Spain and Italy... READ MORE
FALLING BOND YIELDS WEIGH ON STOCKS... Bond yields continue to drop. Chart 1 shows a downtrend line defining the last downleg in the 10-Year T-Note yield that started in mid-March. After consolidating throughout most of June, the TNX may be on the verge of falling even further. The hourly bars... READ MORE
QQQ HITS ITS MOMENT-OF-TRUTH ... Link for todays video. Chart 1 shows the Nasdaq 100 ETF (QQQ) breaking below the lower trendline of a rising wedge. This break follows a failure near broken resistance and the 50-61.80% retracement zone. Rising wedges are typically bearish patterns that form as counter trend... READ MORE
STOCKS PLUNGE AHEAD OF HEALTHCARE RULING AND EU SUMMIT... Link for todays video. Technical analysts do not like to focus on the news, but there are two big events unfolding this week. While I do not know how these events will unfold, it is pretty safe to say that these... READ MORE
SETTING DOWNSIDE TARGETS FOR S&P 500 AND THE DOW... Link for todays video. The European debt crisis has certainly dominated the news over the last few months and EU problems have been blamed for weakness in US equities. While EU woes may be partly to blame, I think... READ MORE
FOREIGN STOCK ETFS GAP LOWER ... Foreign stocks are having a really bad day. Chart 1 shows EAFE iShares (EFA) gapping 4% lower. In so doing, the EFA has left a potential "island reversal" top behind. [An island reversal is formed when an up gap is followed shortly by... READ MORE
10-YEAR TREASURY YIELD REMAINS BELOW SUPPORT BREAK... Link for todays video. Noting recent weakness in the economy and disappointing employment growth, the Fed voted to extend operation twist until yearend. This means the Fed will sell treasuries with short maturities (three years or less) and buy treasuries with longer maturities... READ MORE
HIGH YIELD BOND ETF SURGES ... Action within the various bond categories show more optimism. Chart 1 shows the IBoxx High Yield Corporate Bond Fund (HYG) surging to the highest level in a month. The HYG cleared its 50-day moving average last Thursday. Since junk bonds are highly correlated to stocks,... READ MORE
TECHS LEAD HIGHER AS THE NASDAQ 100 ETF BREAKS RESISTANCE... Link for todays video. US stocks were mixed on Monday, but the technology sector showed some relative strength with good gains. Chart 1 shows the Nasdaq 100 ETF (QQQ) forming an island reversal at the beginning of June, consolidating and... READ MORE
S&P 500 ETF TURNS INDECISIVE BELOW RESISTANCE... Link for todays video. The stock market is looking ahead to next week and the potential for more stimulus. It used to be stimulus first and market response second. Now it appears that the market is getting ahead of the curve... READ MORE
FALLING BOND YIELDS WEIGH ON STOCKS... My Tuesday message showed falling commodity prices weighing on stock values. The same is true with Treasury bond yields which have fallen to record lows. Falling bond yields are symptomatic of economic weakness. Chart 1 compares the yield on the 10-Year T-Note (green bars)... READ MORE
ANALYZING THE RETURN TO RISK IN OCTOBER 2011... Link for todays video. Is the current decline a correction like August 2011 or is this the start of a bigger bear move? All bear markets start as corrections, but not all corrections lead to bear markets. Even though the April-June decline... READ MORE
EAFE ISHARES NEAR TEST OF NECKLINE... I recently wrote about the possibility that foreign stocks were tracing out "head and shoulder" tops. Chart 1 shows an updated version of that potential pattern. The pattern is marked by three prominent peaks over the last two years, with the middle... READ MORE
DIA FAILS AT BROKEN SUPPORT AGAIN... Link for todays video. A key tenet of technical analysis suggests that broken support turns into resistance. The reverse is also true as broken resistance turns into support. While it does not work all the time, it works often enough to keep in mind... READ MORE
CONSUMER DISCRETIONARY SPDR FAILS AT RESISTANCE... Link for todays video. As with August 2011, volatility invaded the stock market over the last three weeks. Chart 1 shows the Consumer Discretionary SPDR (XLY) breaking below support in mid May, failing at broken support in late May and moving sharply lower last... READ MORE
EURO RISES AND TREASURIES FALL AS MARKET TAKES ON SOME RISK... Link for todays video. Stocks are getting an oversold bounce this week as the Euro rebounds from oversold levels and treasuries correct their excesses. Chart 1 shows the Euro Currency Trust (FXE) rebounding back towards 125 the last four... READ MORE
S&P 500 FIRMS AFTER BREAKING 200-DAY MOVING AVERAGE... Link for todays video. Stocks got slammed last Friday after yet another economic report came in below expectations. Actually, a few economic reports came in below expectations last week (Chicago PMI, jobless claims, non-farm payrolls, ISM Manufacturing). This trend continued... READ MORE
STOCKS HIT BY LESS-THAN-EXPECTED JOBS GROWTH... Link for todays video. Economic reports have been coming in below expectations over the last two months and todays employment report was no exception. While I would not call the numbers outright negative, job growth was clearly less-than-expected in May and prior months were... READ MORE
BOND YIELDS AND COMMODITIES HIT NEW LOWS... Everywhere I look I see more serious warning flags for the U.S. stock market. Two of them are coming from recent breakdowns in bond yields and commodity prices. Chart 1 shows the 10-Year T-Note Yield (green line) and CRB Index (brown line)... READ MORE
S&P 500 AND RUSSELL 2000 FAIL AT BROKEN SUPPORT ... Link for todays video. Concerns in Europe spread across the Atlantic as selling pressure hit stocks on Wednesday. Todays selling pressure comes after an oversold bounce that extended to Tuesday. Chart 1 shows the S&P 500 breaking... READ MORE
SPY REMAINS BELOW SUPPORT BREAK... Link for todays video. After a shellacking the first half of May, stocks finally firmed this week and the major index ETFs moved into short-term trading ranges. This, however, is not enough to undo the technical damage done the first three weeks of May. We... READ MORE