The Dollar Index has had a good run to the upside, but is starting to show some possible signs of fatigue. That potential weakness could take the form of an actual reversal in its primary uptrend, or an intermediate counter-correction. At the same time, commodities, which often (but certainly not... READ MORE
SECTOR ROTATION MODEL .. One of the more useful ways to help determine the state of the stock market and the economy is to compare how various market sectors are performing. Certain market sectors do better at market tops, while others do better at market bottoms. Chart 1 shows the Stockcharts... READ MORE
Last time I reviewed the stock market, many of the Indexes had just experienced a bullish outside bar (see chart for the DIA). Since several of the oscillators had reached oversold readings, the idea of a rally seemed appropriate. By the same token, its important to remember that there is... READ MORE
DOW TESTS 200-DAY LINE... October has turned to be a strong month for the market, and industrials in particular. Chart 1 shows the Dow Industrials reaching a two month high and trying to close above its 200-day moving average. The Dow has gained more than 5% for the week and... READ MORE
When I am looking at a downtrend of a specific market that has been in existence for a while, I often ask myself which components might be on the verge of an upside breakout and could therefore lead it higher. Conversely, I have to ask if there are any downside... READ MORE
SHORT-TERM REBOUND CONTINUES... Stocks are ending the week on a positive note and continue to show signs of having formed a short-term bottom. The daily bars in Chart 1 show the S&P 500 building on the gains that started the previous week. Sbort-term momentum indicators like the RSI... READ MORE
Last week, I suggested that some unusually bullish outside bars, in conjunction with positive short-term momentum and a favorable seasonal going into year-end, could trigger a worthwhile rally. That does not make me wildly bullish, because I still think we are in a bear market. When my long-term indicators turn,... READ MORE
NO UPSIDE FOLLOW-THROUGH...Stocks are being sold again on Friday following Thursday's impressive upside reversal. The daily bars in Chart 1 show the S&P 500 reversing upward on Thursday after falling to another bear market low. And it did so on heavy volume. The fact that... READ MORE
Thursday's price action began bearishly with the probing of recent bear market lows. By the end of the session, the DJIA, along with several other markets, totally encompassed Tuesday's trading range and then some, in a one-day pattern known as an "outside day". To... READ MORE
In this exclusive StockCharts TV special, Larry talks about how inflation has been the driving force in the markets. Where are we now, and what is about to happen? Larry uses the Cycle Theory, Crude Oil, P/E, the Presidential Cycle and more to determine where the markets are likely... READ MORE
STOCK INDEXES GAP LOWER... Stocks are selling off sharply following this morning's September job report which came in a bit stronger than expected. That may be a case of good economic news being bad for stocks because it keeps the Fed on its path of higher interest rates.... READ MORE
Just when it seemed that oil was peaking, OPEC breathed new life into the commodity this week by threatening a sizeable production cut. That does not change the overextended nature of the longer-term indicators. Nevertheless, it does hint that oil prices and their related stocks may be on the verge... READ MORE
FALLING FOREIGN CURRENCIES... Last week's message showed the U.S. Dollar Index rising to the highest level in twenty years. That's due largely to the fact that the Fed has been hiking rates faster and higher than most foreign bankers. What's good for the... READ MORE
Polls show that the number one issue with voters is inflation, but some intermarket relationships are signaling otherwise. I am not saying that inflation is about to be wrestled to the ground, but it goes in waves, as you can see from Chart 1. Also, once prices go up, they... READ MORE
TREASURY YIELDS SOAR... An intermarket view across the various financial markets continues to present an overall bearish picture. And it starts with this year's surge in interest rates. Chart 1 shows the yield on 2-Year and 10-Year Treasury yields surging to the highest levels in more than a... READ MORE
The relationship between the stock market and money market interest rates is as old as the hills. The "hills," in this case, go back to 1900 and before. The concept rests on the idea that, at the beginning of the cycle, when the economy is falling like a... READ MORE
STOCK INDEXES NEAR TEST OF SUMMR LOW... Hotter than expected inflation numbers this week pushed interest rates sharply higher and stock prices sharply lower. The daily bars in Chart 1 show the S&P 500 falling to the lowest level in two months and nearing a likely test of... READ MORE
It is a well-established fact that the dollar and oil prices move in opposite directions, most of the time. Perhaps a more accurate way of saying the same thing is to observe that a rising dollar acts as a headwind for energy prices, while a falling one acts a tailwind... READ MORE
Larry goes back to the future in this exclusive StockCharts TV special! The stock market, he predicts, will go down a bit, before then heading UP, UP & Away! He shares the things that make him think that way, including inflation, stocks, and a view of the future. This video... READ MORE
S&P 500 ENDS THREE-WEEK DECLINE... Stocks are ending the week on a strong note after falling for the previous three weeks. An oversold condition and the presence of underlying chart support are also playing a role in this week's buying. The 9-day RSI line in the... READ MORE
This may seem like a foolish title, given that the Fed could be about to raise short-term interest rates by as much as 75 basis points in September with further, but smaller, hikes following that. However, bonds revolve around the business cycle in a chronological sequence, as do stocks and... READ MORE
The big daddy of all market trends is the secular or very long-term one, and it's about to have a big influence as to whether the June low will hold, meaning prices are about to reach new all-time highs, or if we are going to return to a... READ MORE
STOCKS SELL OFF FOLLOWING POWELL SPEECH... A modest rally attempt was turned back pretty decisively today following a speech by Fed chief Powell that sounded more hawkish than the market was expecting. Friday's heavy selling also reinforced the view expressed last Friday that the summer rally in stocks... READ MORE
Back in June, I wrote an article entitled Are Commodities Losing their Mojo?It drew attention to the fact that some long-term indicators were pointing to at least a temporarypull-back in prices. That process is already underway, but the article also pointed out that energy usually lags other industrial commodity... READ MORE
S&P 500 STALLS AT 200-DAY AVERAGE...The two month rally in stocks has run into a couple of formidable resistance lines while in an overbought condition. Last week's message showed the S&P 500 nearing a test of its 200-day moving average and a falling... READ MORE
It's a Primary Bull Market for the Dollar Chart 1 shows that the US Dollar Index is very much in a primary bull market, having violated a (dashed) secular down trendline a few months ago and, more recently, completed a 7-year rectangle formation. The green-shaded areas identify those... READ MORE
JUNE HIGHS CLEARED... Last week's message showed major stock indexes testing initial resistance at their June highs, and suggested that an upside penetration of that resistance could lead to a possible test of their 200-day moving averages. Those June highs have since been exceeded. Chart 1 shows the... READ MORE
The summer rally has enabled several indexes to push through important resistance, but, since there was a lot of backing and filling at higher levels earlier this year, there are several places where even more resistance is apparent. If you want to be bullish, for instance, take a look at... READ MORE
INTERMEDIATE TERM RALLY CONTINUES... The stock rally that started in mid-June continues to gain ground which confirms that the market has put in an intermediate term bottom. The question is how far that intermediate rally can rally within the current downtrend. Hopefully, the charts shown below will help determine where... READ MORE
The rally since mid-June has taken several indexes back to their extended breakdown trendlines, which mark one demarcation point between bull and bear. Chart 1, for instance shows that the NASDAQ completed a top in May and then followed through with further weakness. By mid-June, the Index found a bottom... READ MORE
Markets are getting ready to rock & roll to the upside! In this exclusive StockCharts TV special, Larry has a lot to show you and a lot of education to share. He digs into the three key reasons he's expecting a major rally: panic selling, important buying, and... READ MORE
STOCK INDEXES GAIN MORE GROUND... Despite a .75% rate hike by the Fed on Wednesday, and a second quarter of negative GDP growth on Thursday, stock indexes continued to gain ground. And they're in the process of testing some overhead resistance lines. Chart 1 shows the Dow Industrials... READ MORE
This week, we diverge from our normal chart talk to focus on the economy, as the word "recession" is now on virtually every one's lips, provoked by a lot of misinformation. First, there seems to be a general understanding in the media that the definition of... READ MORE
MODEST WEEKLY GAINS... Stock indexes gained some ground this week, but not enough to reverse major downtrends. And they remain below overhead resistance levels. The daily bars in Chart 1 show the Dow Industrials rising to the highest level in six weeks and clearing their 50-day moving average. While that... READ MORE
Due to its sensitivity to interest rates, housing has the greatest average lead time going into recessions than any other economic (as opposed to financial) indicator. For that reason alone, it is worth examining amid the constant talk of recession. The HMI vs. Housing Starts Earlier this week, two important... READ MORE
TEN YEAR - TWO YEAR YIELD CURVE INVERTS... Chart 1 shows the spread between the ten year and two year Treasury yields falling below the zero line which signals an inverted yield curve. That means that the shorter two-year yield is now higher than the longer maturity ten-year yield. That... READ MORE
In late April, I wrote that bond yields had run into resistance and a pause in the on-going uptrend was likely. Yields on longer-dated maturities initially moved slightly higher, but are now at approximately the same level as that April article. However, more corrective activity appears likely, as commodities (e.... READ MORE
MAJOR STOCK INDEXES GAIN ON THE WEEK... Stocks saw modest gains on the week but not enough to disturb their major downtrend. Chart 1 shows the Dow Industrials gaining .77% for the week but remaining well below overhead resistance levels and moving average lines. Chart 2 shows the S&... READ MORE
Waterfall declines leading to capitulation are easy to observe and understand when we have the benefit of hindsight. However, they are almost impossible to identify ahead of time. One characteristic often associated with such uncomfortable price moves is an unexpected weakening of economic activity, where confidence literally falls off a... READ MORE
STOCKS REMAIN UNDER PRESSURE...Stocks are ending the quarter with more selling. The weekly bars in Chart 1 show the S&P 500 down more than 3% on the week with a monthly loss of more than 8%. For the year, the S&P 500 is down 20%... READ MORE