FALLING FLAGS REMAIN FOR DIA AND SPY... Link for todays video. Stocks got off to a weak start on Friday with the Dow Industrials SPDR (DIA) and S&P 500 ETF (SPY) moving lower in early trading. With these declines, lower highs are taking shape again this week to... READ MORE
RUSSELL 2000 ETF BOUNCES OFF SUPPORT... Link for todays video. After a sharp decline the prior five days, stocks got an oversold bounce with small-caps leading the way. Chart 1 shows the Russell 2000 ETF (IWM) getting a bounce off support from the early April low. Support in this area... READ MORE
THE MARKET'S HAD A FIVE WAVE ADVANCE... Determining Elliott Wave counts can be very subjective. One way to make it little easier is to employ a "ZigZag"overlay on the price chart. [The ZigZag is located in the same Overlays menu that includes moving averages]. The... READ MORE
FINANCE SECTOR ON VERGE OF P&F TRIPLE BOTTOM BREAKDOWN... Link for todays video. I am on the road so Monday's Market Message is coming a bit early. John Murphy featured the Finance SPDR (XLF) as it tested its 2011 lows on Friday and showed relative weakness.... READ MORE
EURO BREAKS 50-DAY LINE... Last week's sharp drop in the Euro (and rebound in the dollar) contributed to heavy selling in commodity assets and increased the odds for a stock correction. Unfortunately, the short-term picture has weakened more with the Euro falling below its 50-day average for the... READ MORE
COMMODITIES CONTINUE TO WEAKEN... Commodities are coming under renewed selling pressure after the oversold bounce of the last two days. The following charts also show that this week's rebound came on much lighter volume that last week's heavy selling. That's a strong indication that... READ MORE
QQQ AND IWM ESTABLISH IMPORTANT SHORT-TERM SUPPORT... Link for todays video. With a bounce over the last few days, the Nasdaq 100 ETF (QQQ) and Russell 2000 ETF (IWM) established important short-term levels to watching going forward. It is important to realize that major trend reversals occur in stages. A... READ MORE
JOBS REPORT GIVES SPY A BOUNCE OFF BROKEN RESISTANCE... Link for todays video. After a breakout and 52-week high for the S&P 500 ETF (SPY) last week, it was pretty much all down hill this week. SPY opened strong on Monday, but selling pressure quickly took over and... READ MORE
COMMODITIES PLUNGE... This morning's message showed a number of commodity ETFs falling below their 50-day lines and warned of a broader selloff in the making. By day's end, the CRB Index had fallen 17 points for the biggest loss in two years. Chart 1 shows the... READ MORE
EURO SELLING BOOSTS OVERSOLD DOLLAR... Arthur Hill's Monday message showed the U.S. Dollar Index in oversold territory for the first time in eighteen months. I warned on Tuesday that a dollar bounce would put even more downside pressure on commodities. Commodity selling started in silver and has... READ MORE
ENERGY SPDR FORMS EVE-ADAM DOUBLE TOP... Link for todays video. With two equal highs in April and a support test in May, the Energy SPDR (XLE) has a double top working. Chart 1 shows XLE forming an Adam and Eve Double Top. This particular pattern comes from Thomas Bulkowski, author... READ MORE
NEW SECTOR LEADERS ARE DEFENSIVE ... I've written before about the shift in market leadership away from former leaders -- like energy -- into defensive groups like staples and healthcare. We can add utilities to that defensive list as well. Chart 1 shows the "relative" performance of... READ MORE
BROKEN RESISTANCE TURNS INTO FIRST SUPPORT FOR SPY... Link for todays video. Broken support turns into resistance. This is a basic tenet of technical analysis. Chartists can reverse the rolls because broken resistance turns into support as well. With a big surge the last two weeks, the S&P... READ MORE
PROJECTING $SPX TARGETS WITH ELLIOTT WAVE COUNT ... Link for todays video. Long-term, the S&P 500 sports three five wave advances of differing degrees. The black Roman numbers show the largest degree wave on the chart 1. Notice that Wave-II was rather shallow and Wave-IV was rather sharp/deep.... READ MORE
SILVER PROVIDES NEW SUPPORT POINT... My Tuesday message expressed concern that Monday's high-volume day might have marked a short-term top for silver, and precious metals in general. Those concerns about silver being dangerously over-extended remain. However, renewed weakness in the U.S. Dollar, and Mr. Bernanke's... READ MORE
BASE METALS ETF STALLING AS SPY HITS NEW HIGH... CandleGlance charts make it easy view and compare the key intermarket areas. I realize that these charts are small and not well suited for detailed analysis. These represent another charting alternative available at StockCharts.com. Details on creating these charts can... READ MORE
STOCK INDEXES REACH THREE-YEAR HIGHS ... All three major stock indexes cleared chart resistance to resume their uptrends. As an added bonus, volume also rose on the price gains. Chart 2 shows the S&P 500 SPDRs clearing the neckline on the "inverse head and shoulders" that Arthur... READ MORE
SILVER AND SILVER STOCKS OPEN LOWER ... As a follow-up to my earlier message on the likelihood that silver is peaking, the first three charts show silver assets opening lower today. The 15-minute bars in Chart 1 show Silver iShares trading below yesterday's intra-day low at 44.53. That... READ MORE
OVERBOUGHT SILVER REACHES 1980 PEAK ... We've been enthusiastically bullish on precious metals and silver in particular. The spectacular silver rally now looks dangerously overextended. In addition, it has reached its 1980 high at $50 as shown in Chart 1. The monthly RSI line shows silver to be at... READ MORE
SPY CHALLENGES NECKLINE RESISTANCE... Link for todays video. With last weeks surge back to the February highs, the S&P 500 ETF (SPY) has traced out an inverse head-and-shoulders. These patterns can form as continuation or reversal patterns. An inverse head-and-shoulders pattern after an extended advance is viewed as... READ MORE
TRIANGLE FORMATION IS BEARISH FOR THE DOLLAR... My market message from two Thursdays ago (April 7) showed a bearish triangle forming on the monthly chart of the US Dollar Index. Chart 1 is an updated version of that chart and shows the two converging trendlines that have been forming since... READ MORE
QQQ FOLLOWS THROUGH ON BIG HAMMER... Link for todays video. The Nasdaq 100 ETF (QQQ) followed Mondays hammer with a small gain on Tuesday and a big gap on Wednesday. This massive hammer was featured in Mondays Market Message. Techs led the charge on Wednesday with QQQ jumping over 2%... READ MORE
MARKETS MOVING BACK TOWARDS RISK-OFF TRADE... Link for todays video. The risk-off trade is making a comeback. A risk-on environment favors stocks, commodities (economic growth) and the Euro (debt stability). Conversely, a risk-off environment favors Treasuries (weak economy) and the Dollar (safety). Stocks and commodities perform poorly in a risk-off... READ MORE
RELATIVE WEAKNESS IN FINANCE AND CONSUMER DISCRETIONARY PRECEDED 2007 PEAK... Link for todays video. The performance of small-caps and the four offensive sectors is important to the health of the market. Small-caps represent domestic oriented companies that are more sensitive to the economy. The offensive sectors represent four distinct parts... READ MORE
THE SECTOR ROTATION MODEL ... My Tuesday message talked about how sectors rotate near market tops. I explained that market leadership by materials and energy (which carries inflationary expectations) is often a sign of market that's in need of a correction or a consolidation. I also explained that money... READ MORE
SPY GAPS LOWER TO FORGE ISLAND REVERSAL... Link for todays video. With a pair of opposing and overlapping gaps, the S&P 500 ETF (SPY) formed an island reversal over the last few weeks. First, chart 1 shows the ETF gapping above 132 with a surge on March 30th.... READ MORE
DEFENSIVE ROTATION ... Last week's messages expounded on a number of intermarket themes, which included the "new normal" relationships among the four main asset classes (bonds, stocks, commodities, and currencies). We're seeing more of that today but in the opposite direction. Stocks and commodities are... READ MORE
SMALL-CAPS LEAD CORRECTIVE PHASE... Link for todays video. There are two ways to work off an overbought condition: pullback or consolidate. Actually, there is a third that is somewhere in between a pullback and a consolidation. Many indices and ETFs became overbought after the surge from mid March to early... READ MORE
WEST TEXAS INTERMEDIATE SURGES ABOVE 111... Link for todays video. Weakness in the Dollar and strength in the stock market continue to support higher oil prices. John Murphy has spoken at length about the inverse relationship between commodities and the Dollar. This means one goes up when the other goes... READ MORE
EUROPEAN CURRENCIES RISE ON HIGHER RATES... As expected, the European central bank raised interest rates by a quarter point today for the first time in two years. Expectations for that hike (and maybe more to come) have helped boost the Euro against the U.S. Dollar over the past few... READ MORE
CHAIKIN MONEY FLOW REMAINS NEGATIVE TO SPY... Link for todays video. The S&P 500 ETF (SPY) remains in an uptrend overall and is currently challenging the February highs. Chart 1 shows the ETF gapping above 132 and forming six indecisive candlesticks the last six days. Indecisive candlesticks have... READ MORE
GOLD HITS NEW RECORD ... Gold prices are surging to new record high today which is erasing the short-term setback of a couple of weeks ago. Chart 1 shows the Gold Trust Shares (GLD) breaking decisively through its late 2010 highs on rising volume. And, as usual, silver is leading it... READ MORE
INTERMARKET REVIEW... Over the weekend, Chip Anderson reviewed the Intermarket Picture based on the "normal" relationships that have worked for decades in the financial markets. Some of them, however, have changed in recent years (as we've pointed out in our market messages). Those intermarket changes, and... READ MORE
SEMICONDUCTOR HOLDRS BREAK CHANNEL SUPPORT... Link for todays video. The Semiconductor HOLDRS (SMH) continues to show relative weakness with a short-term support break over the last two days. Chart 1 shows SMH forming a rising channel as it retraced 62% of the prior decline. The ETF hit resistance at this... READ MORE
DOW INDUSTRIALS AND TRANSPORTS EXCEED FEBRUARY HIGHS... Link for todays video. With the surge over the last two weeks, the Dow Industrials moved back above its February high to record a new 52-week high on Friday. Chart 1 shows the mid March reversal around 11600 establishing a key reaction low... READ MORE
BOND YIELDS JUMP ... This morning's March jobs numbers reported U.S. payrolls jumping by 218,000 which was higher than estimates. In addition, the unemployment rate declined to a two-year low of 8.8%. The result is a jump in stock futures which points to a higher open... READ MORE
RUSSELL 2000 ETF EXCEEDS FEBRUARY HIGH... Link for todays video. Small-caps continue to show relative strength as the Russell 2000 ETF (IWM) became the first major index ETF to break its February high. The Dow Industrials SPDR (DIA) is next in line as it trades near its February high. The... READ MORE
SOUTH KOREA LEADS EMERGING MARKETS HIGHER... Last week's upside breakout in emerging markets is still holding. Chart 1 shows Emerging Market iShares (black line) having risen to a new three-month high. The strongest component in that group is Korea iShares (red line) which is nearing its February high.... READ MORE
BOND ETF TESTS NECKLINE BREAKOUT... Link for todays video. The 20+ year Bond ETF (TLT) surged above neckline resistance in mid March, but pulled back as stocks rallied over the last several days. The inverse head-and-shoulders breakout remains in play as broken resistance turns into the first support level to... READ MORE
SMALL-CAPS LEAD THE MARKET HIGHER... Link for todays video. Small-caps led the surge on Monday and are at it again on Friday with another show of relative strength. Chart 1 shows the Russell 2000 ETF (IWM) surging over 35% from late August to late February. This move was pretty much... READ MORE