S&P 500 EQUAL WEIGHT ETF BREAKS MARCH HIGHS... Link for todays video. Even though stocks may be short-term overbought after sharp advances this month, the bulls maintain their overall edge as many key ETF trade at or new 52-week highs. Chart 1 shows the S&P 500... READ MORE
CONSUMER DISCRETIONARY AND TECHNOLOGY SECTORS HIT NEW HIGHS... Link for todays video. Chartists can debate the sustainability of the current rally, but there is no debating the underlying strength in two key sectors. The Consumer Discretionary SPDR (XLY) and the Technology SPDR (XLK) both recorded new 52-week highs last week.... READ MORE
SURGE IN SHANGHAI COMPOSITE LIFTS MATERIALS SECTOR... Link for todays video. Thursdays rally started in Europe, continued in the US and extended to Asia on Friday. In particular, the Shanghai Composite ($SSEC) surged over 3% with its biggest one-day move since January. Chart 1 shows the index moving above the... READ MORE
EUROPEAN STOCKS SURGE ... The market's got what they wanted from the ECB president this morning. Mario Draghi announced an aggressive bond buying program that has given a huge boost to European stocks and other "risk on" assets. Chart 1 shows the Europe 350 iShars (IEV) surging... READ MORE
FEDEX AND UPS WEIGH ON DOW TRANSPORTS ... Link for todays video. FedEx (FDX) is weighing on the Dow Transports after the company lowered guidance for the first quarter. Expectations were already low and FedEx just made them even lower. Unsurprisingly, the company sited weakness in the global economy. Chart 1... READ MORE
SPY HOLDS GAINS AND EXTENDS CONSOLIDATION ... Link for todays video. Boy, it is just like a Fed day. Wait, it is a Fed day. Fed Chairman Bernanke finally gave his speech at Jackson Hole and the markets bounced like the silver ball in a pinball machine. The S&P... READ MORE
ON BALANCE VOLUME LINE NOT KEEPING PACE WITH STOCK RALLY... My Tuesday message expressed the view that if a stock correction were to start, this would be a logical spot for that to happen. That's because several market indexes are testing spring highs, which is a normal spot... READ MORE
S&P 500 SHRUGS OFF COPPER, THE VIX AND LOW VOLUME... Link for todays video. There are plenty of reasons to doubt the current advance in the US stock market. The Shanghai Composite recently hit a 52-week low, copper remains in the doldrums, the CBOE Volatility Index is at... READ MORE
U.S. DOLLAR REMAINS ON THE DEFENSIVE... The dollar continues to weaken. Chart 1 shows the PowerShares US Dollar Index Fund (UUP) slipping to a three-month low today. It's also threatening its 200-day moving average, and is nearing a test of trendline support drawn under its September, October,... READ MORE
HEALTHCARE SPDR CHALLENGES JULY HIGHS... Link for todays video. The Healthcare SPDR (XLV) is showing relative strength on the price chart with a challenge to the July highs. Chart 1 shows XLV surging above 38.75 in late July and then consolidating for the last three weeks. With another surge... READ MORE
DOW BACKS OFF RESISTANCE AND NASDAQ STALLS ... Link for todays video. After a sharp advance the past 12 weeks, stocks took a breather this week. Keep in mind that the S&P 500 advanced nine of the last twelve weeks and the index is up some 11% from its... READ MORE
OUTSIDE REVERSAL DAYS INCREASE CHANCES FOR PULLBACK... Link for todays video. Stocks reversed course during the day on Tuesday with many stocks and ETFs forming reversal days, which go by various names. In candlestick lingo, the charts were littered with bearish engulfing patterns. In bar chart lingo, there were several... READ MORE
UPTURN IN BOND YIELD AND DOWNTURN IN BOND PRICE SHOW MORE OPTIMISM... This is the same headline that started my last Market Message two Tuesdays ago (August 7). It's even more true today than it was then. A couple of weeks back, the 10-Year T-Note Yield had just... READ MORE
OVERBOUGHT DIA AND QQQ ARE VULNERABLE TO CORRECTION... Link for todays video. The major index ETFs are in medium-term uptrends, but have become short-term overbought and vulnerable to a correction or consolidation. There are two ways to work off overbought conditions: trade sideways or pullback. Sometimes we see a combination... READ MORE
S&P 100 HITS NEW HIGH ON LOW VOLUME... Link for todays video. The S&P 100 continues to lead the major indices with a break above its spring highs. Chart 1 shows $OEX surging some 12% since early June and exceeding 650 this week. Even though the... READ MORE
SPY CONSOLIDATES NEAR APRIL HIGHS... Link for todays video. Stocks stalled over the last several days, but this is not necessarily a sign of weakness. Chart 1 shows the S&P 500 ETF (SPY) moving above 140 on August 7th and then moving into a relatively tight consolidation. Ones... READ MORE
S&P 100 CHALLENGES SPRING HIGHS... Link for todays video. S&P 100 is leading the market as it challenges its prior highs. Chart 1 shows the index hitting 645, which marks resistance from the April high. Given the strength of this uptrend, I would not consider the... READ MORE
DOW AND S&P 500 NEAR SPRING HIGHS... Link for todays video. The Dow Industrials and S&P 500 continue to lead the market higher as they close in on their spring highs. Both are within 2% of their all time highs. The medium-term trends turned bullish with... READ MORE
BONDS BREAK 50-DAY AVERAGE... For the first time in four months, bond yields are rising and bond prices falling. Chart 1 shows the 10-Year T-Note YIeld (TNX) trading above its 50-day average for the first time since early April. At the same time, the 20+Year Treasury Bond iShares (TLT)... READ MORE
RUSSELL 2000 ETF SURGES OFF 200-DAY FOR SECOND TIME... Link for todays video. Stocks surged as the jobs number and ISM Services Index exceeded expectations. The Labor Department reported that the US economy added 163,000 jobs in July. This number was above the expectations for 100,000 and the... READ MORE
WORLD STOCK INDEX PEAKED IN 2011... My earlier message showed a rotation out of small cap stocks into mega-caps in the middle of 2011 which continues to this day. That suggests that investors have been growing increasingly defensive over the last year. Chart 1 provides graphic evidence that global stocks... READ MORE
SPY EXTENDS HIGH LEVEL STALL... Link for todays video. The Fed came and went, but stocks did not react much. There was a little volatility around announcement time, but stocks settled back into their narrow ranges of the last three days. In its policy statement, the Fed noted that economic... READ MORE
SPY EXTENDS UPTREND AND ESTABLISHES KEY SUPPORT... Link for todays video. It is likely to be a big event-driven week for the market. In addition to over a dozen economic reports, the Fed makes its policy statement on Tuesday and the European Central Bank (ECB) meets on Thursday. The week... READ MORE
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