S&P 500 ETF CHALLENGES 2011 HIGHS... Link for todays video. A string of positive economic-related reports lifted stocks on Friday and the S&P 500 ETF (SPY) is poised to close higher for the fifth consecutive week. Factory Orders expanded at a healthy clip, IWM Services expanded... READ MORE
SMALL-CAPS AND LARGE-TECHS LEAD YEAR-TO-DATE... Link for todays video. Before looking as small-cap performance, lets distinguish between the January barometer and the January effect. The January barometer refers to the historical tendency for January performance to set the tone for the entire year. As January goes, so goes the rest... READ MORE
CLOSELY CORRELATED WITH US MARKET ... Last Thursday's message argued for the inclusion of Canada in a foreign stock portfolio. I'm going to expand on Canada's unique role in the global intermarket picture in this message. In my view, Canada is unique for at least... READ MORE
BROKEN RESISTANCE LEVELS TURN FIRST SUPPORT FOR SPY... Link for todays video. It is no secret that stocks became overbought after big moves the last few weeks and months. While overbought conditions do not guarantee a correction, they certainly increase the odds for a correction. Chart 1 shows the S&... READ MORE
SPOT LIGHT CRUDE FORMS INVERSE HEAD-AND-SHOULDERS ... Link for todays video. Whats it going to be for crude? Even though stocks are higher and the Dollar is lower the last few weeks, crude is down and not responding very well. Chart 1 shows Spot Light Crude ($WTIC) surging along with the... READ MORE
EAFE ISHARES ... EAFE iShares (EFA) are viewed as the premier ETF for foreign developed markets. EAFE includes stocks in ten of the world's largest developed markets in Europe, Australasia, and the Far East. It's biggest weighting, however, is in Europe (57%). The United Kingdom is its... READ MORE
LARGE-CAP TECHS LEAD AS STOCKS GET OVEREXTENDED... Link for todays video. All of the major index ETFs were up on Wednesday with gains ranging from .65% for the Dow Industrials SPDR (DIA) to 1.26% for the Nasdaq 100 ETF (QQQ). Admittedly, these are relatively modest gains for such a... READ MORE
SPX ELLIOTT COUNT SUGGEST CURRENT ADVANCE IS CORRECTIVE... Link for todays video. It is time once again to open Pandoras box with some Elliott Wave analysis. First, note that there are only three rules for Elliott Wave Theory. Rule 1: Wave-2 cannot retrace more than 100% of Wave-1. Rule 2:... READ MORE
AIRLINE INDEX CHALLENGES OCTOBER HIGHS... Link for todays video. Led by railroad, trucking and air-freight stocks, the Dow Transports exceeded its October high with a surge in early January. Airlines have been lagging, but may be poised to play catch-up as the Amex Airline Index ($XAL) challenges resistance. Chart 1... READ MORE
S&P 500 AND NASDAQ CLEAR FOURTH QUARTER RESISTANCE... The U.S. stock market continues to lead the rest of the world higher. Charts 1 and 2 show the S&P 500 and Nasdaq Composite Indexes clearing their fourth quarter highs, which puts them in position to challenge... READ MORE
TECHNOLOGY AND CONSUMER DISCRETIONARY SPDRS CHALLENGE SUMMER HIGHS ... Link for todays video. Stocks were broadly higher on Wednesday with the Consumer Discretionary SPDR (XLY) and the Technology SPDR (XLK) leading the way. Chart 1 shows XLK challenging resistance in the 26.5 area. Resistance in this area turned the ETF... READ MORE
FINANCE SECTOR LEADS MARKET LOWER... Link for todays video. An earnings miss from JP Morgan weighed on the finance sector and the market early Friday. Chart 1 shows the S&P 500 ETF (SPY) dipping below 128 and filling Tuesdays gap. Even though SPY closed higher Wednesday and Thursday,... READ MORE
RISING DOLLAR IS BETTER FOR US STOCKS... There's good and bad news in the recent rally in the U.S. dollar. First the good news. The past year's dollar rebound appears to be part of a major bottoming formation that started during 2008. Starting with that... READ MORE
RETAIL SPDR CONSOLIDATES AS RETAIL SALES REPORT LOOMS... Link for todays video. With December retail sales scheduled for tomorrow, retailers are on the hot seat and the Retail SPDR (XRT) is at a make-or-break level. Chart 1 shows XRT surging above 53 with a sharp six day move that began... READ MORE
SEMIS LEAD WITH A MOVE ABOVE EARLY DECEMBER HIGH... Link for todays video. Semiconductor HOLDRS (SMH), which is now part of a Market Vectors ETF clan, is showing relative strength in 2012 with a triangle breakout and surge above the early December high. Chart 1 shows SMH surging above 32... READ MORE
WEEKLY INDICATORS REMAIN BULLISH FOR SPY... Link for todays video. The S&P 500 ETF (SPY) extended its yearend rally with a move above 127.5 this week. Chart 1 shows weekly candlesticks over the last two and a half years. Focusing on price action since July, we can... READ MORE
NASDAQ INDEXES TEST OVERHEAD RESISTANCE ... The Dow Industrials and S&P 500 indexes have already cleared overhead resistance barriers. The Nasdaq market may be next. Chart 1 shows the Nasdaq Composite Index trying to close above its 200-day moving average. That would be a positive development for it and... READ MORE
RUSSELL 2000 ETF AND S&P EQUAL-WEIGHT ETF CHALLENGE 200-DAY SMAS... Link for todays video. With the late December surge and Tuesdays gaps, the Russell 2000 ETF (IWM) and the Rydex S&P Equal Weight ETF (RSP) are both challenging their 200-day moving averages. These two ETFs are... READ MORE
DOLLAR INDEX WEAKENS FROM OCTOBER PEAK ... One of the contributing factors behind today's jump in global stocks and commodities is the drop in the U.S. Dollar. Chart 1 shows the DB Bullish Dollar ETF (UUP) gapping lower today and threatening short-term support at its December low. That... READ MORE
IWM AND MDY CHALLENGE NECKLINE RESISTANCE... Link for todays video. Going into 2012, some of the major index ETFs are at important make-or-break levels. These major index ETFs include the Dow Industrials SPDR (DIA), S&P 500 ETF (SPY), Nasdaq 100 ETF (QQQ), the Russell 2000 ETF (IWM) and... READ MORE
HOMEBUILDERS CONTINUE TO STRENGTHEN... Last Thursday's message was about a strengthening housing sector. It showed two housing-related ETFs climbing over their 200-day moving averages for the first time in several months. Those upside breakouts are holding. In fact, homebuilders are one of today's strongest groups. Chart... READ MORE
DIVIDEND ISHARES HITS THREE-YEAR HIGH ... One of the consistent themes that we've written about since the spring is the rotation toward large dividend-paying stocks. Many of those stocks are also in defensive stock groups that include healthcare, staples, and utilities. There's no sign of that trend... READ MORE
S&P 500 CLOSES BACK ABOVE 12-MONTH EMA... Link for todays video. Today I am going to take a big step back and look at the monthly charts for the major intermarket assets: stocks, bonds, the Dollar, gold and oil. Chart 1 shows the S&P 500 with... READ MORE
HOUSING ETFS START TO OUTPERFORM... For the first time in a long time, stocks tied to housing are starting to show good absolute and relative performance. The two main housing ETFs that I follow have moved back above their 200-day moving averages. In case you're thinking of nibbling... READ MORE
QQQ CONTINUES TO SHOW RELATIVE WEAKNESS... Link for todays video. An earnings miss from Oracle hit the stock and the technology sector hard on Wednesday. With a market cap of $127 billion, Oracle (ORCL) is still a technology titan that carries lots of weight within the industry. Chart 1 shows... READ MORE
SPY AND IWM RETAKE 50-DAY MOVING AVERAGES... Link for todays video. Stocks surged in early trading on Wednesday with a broad rally that lifted all sectors. The combination of oversold conditions and a bounce in the Euro triggered some pre-Christmas buying pressure, which may just be the start of the... READ MORE
FOREIGN STOCKS LEADING US LOWER... Last week I pointed out that the rising dollar was taking a bigger toll on foreign stocks than those in the U.S. That continues to be the case. Today's 2% loss pushed Emerging iShares (EEM) further below their 50-day average and closer... READ MORE
SEPARATING PRIMARY MOVEMENTS FROM SECONDARY MOVEMENTS... Link for todays video. Today I am going to focus on weekly charts for a long-term perspective. Charles Dow identified three general movements in the market: primary, secondary and random fluctuations. The primary trend is, of course, the biggest and the most important. Secondary... READ MORE
PHARMACEUTICAL HOLDERS OUTPERFORM HEALTHCARE SPDR... Arthur Hill yesterday showed market leadership by defensive stocks that include staples, healthcare, and utilities. That defensive leadership started with the market peak last spring, and has re-asserted itself again recently. I've been focusing mainly on pharmaceutical stocks in recent messages. That'... READ MORE
QQQ FILLS GAP AS IWM BREAKS 50-DAY SMA... Link for todays video. The Nasdaq 100 ETF (QQQ) led the major index ETFs lower on Wednesday and filled the big gap. Chart 1 shows QQQ forming lower highs from July to October and from early November to early December. With a... READ MORE
US HOLDS UP BETTER THAN FOREIGN DEVELOPED MARKETS ... Although it's been a rough year for all global stocks, U.S. stocks have held up better than everyone else's. Chart 1 compares the S&P 500 to the world's biggest stock markets during 2011.... READ MORE
IWM GETS CAUGHT IN MOVING AVERAGE SANDWICH ... Link for todays video. Stocks were down sharply in early trading on Monday with small-caps leading the way lower. With this move, the 200-day moving average is marking resistance for the Russell 2000 ETF (IWM). Despite todays decline, the 50-day line is still... READ MORE
DAX AND DOW BOUNCE AS EU SUMMIT WINDS DOWN... Link for todays video. European stocks were higher on Friday as the EU summit winds down. Success or failure depends on one definitions and expectations. Regardless of the outcome, stocks in the US and Europe moved higher Friday. Chart 1 shows... READ MORE
FALLING EURO WEIGHS ON STOCKS AND COMMODITIES ... The most important market of the day remains the Euro. That's because the European currency has become the proxy for how things are going in Europe. Unfortunately, the chart picture isn't that encouraging. Chart 1 shows the Euro trading... READ MORE
DIA AND IWM STALL AFTER BIG MOVES... Link for todays video. The stock market appears to be holding its breadth as the European summit and European Central Bank (ECB) policy statement loom later this week. The late November surges are holding, but resistance levels are coming into play. The Dow... READ MORE
GOLD MOVES LOWER DESPITE STRENGTH IN STOCKS... Link for todays video. For whatever reason, stocks and gold have been positively correlated since late September. It is a strange pairing, but chart 1 confirms this relationship. The first indicator window shows the Gold SPDR (GLD) in red and the S&... READ MORE
STOCK RALLY STALLS AT 200-DAY AVERAGE... This past week's impressive stock rally ran into some profit-taking on Friday just shy of 200-day moving averages. Charts 1 and 2 show the S&P 500 and the Nasdaq Composite Indexex closing near their daily lows after nearing that important... READ MORE
S&P 500 ETF BREAKS RAFF REGRESSION CHANNEL RESISTANCE... Link for todays video. Chart 1 shows the S&P 500 ETF (SPY) with a Raff Regression Channel defining the November downswing. I showed this chart with a falling flag on Wednesday and labeled last weeks dip below 118... READ MORE
CONSUMER STAPLES SPDR HITS RECORD HIGH ... Despite the renewed optimism arising from yesterday's strong market rally, defensive stocks are still showing relative strength and strong chart action. The best performers are consumer staples. Chart 1 shows the Consumer Staples Sector SPDR (XLP) trading at a new record high.... READ MORE
FINANCE SECTOR SOARS ON CENTRAL BANK ACTION... Link for todays video. Stocks soared on Wednesday as five central banks lowered interest rates on dollar swaps. China also cut its reserve requirement for banks. A dollar swap is basically an emergency dollar loan to foreign banks. The European debt crisis created... READ MORE