DEFENSIVE ROTATION ... Although the stock market remains stuck in a short-term trading range, a more cautious tone has been revealed by sector rotations beneath the surface. Over the last month, for example, the two top market sectors have been utitilities and healthcare which are traditionally defensive groups. The two weakest... READ MORE
DECEMBER STARTS A LITTLE DIFFERENT... Link for todays video. December is shaping up a little different than the rest of the year. Chart 1 shows an Intermarket Perfchart from early March to the end of November. The S&P 500 ETF (SPY) is by far the best performer over... READ MORE
DOW FIRMS AT CONSOLIDATION SUPPORT... Since first moving above 10400 on November 16th, the Dow has been in consolidation mode. Chart 1 shows the senior Average crisscrossing the 10400 level at least six times in the last 17 trading days. Basically, we have a consolidation within an uptrend. With higher... READ MORE
DOLLAR RALLY PUSHES FOREIGN CURRENCIES BELOW 50-DAY LINES... Last Friday's jump in the U.S. Dollar (following a strong jobs report) pushed the Euro below its 50-day moving average. When a support line that has contained pullbacks for eight months is broken, that signals a change in a... READ MORE
BARRON'S ARTICLE GIVES BOTH GROUPS A BOOST... I've written a couple of articles over the last two weeks about the recent move into dividend paying stocks like telecom and utilities. A weekend Barron's article (Even Better Than Bonds) wrote about how relatively low bond... READ MORE
BOND YIELDS AND DOLLAR BOUNCE... Sometimes good news produces a bad effect. That's especially true when dealing with financial markets. Today's unemployment report dropped to 10% and payrolls fell by an unusually small amount. That good news was given a positive reception by most markets. By... READ MORE
RELATIVE WEAKNESS FINANCE WEIGHS... Link for todays video. Even though the major indices and sectors remain in uptrends overall, there are a few key areas of weakness that merit attention. First and foremost, the Financials SPDR (XLF) remains a drag on the overall market. Even with strength in Bank of... READ MORE
ENERGY CONTINUES TO LAG THE S&P 500... Note: There will be another posting with a video later today. November was not a good month for the Energy SPDR (XLE). Chart 1 shows the Sector SPDR Perfchart with the absolute performance for the nine sectors and the S&... READ MORE
DOW STALLS NEAR TOP OF CHANNEL... Link for todays video. The Dow Industrials stalled as the market traded with indecision on Wednesday. Chart 1 shows a clear uptrend over the last several months. A series of higher highs and higher lows formed since August. With this zigzag higher we can... READ MORE
GLOBAL PULLBACK FINDS SUPPORT AT 50-DAY LINES... As fears about Dubai reside, global stocks have regained their upside momentum. All three U.S. stock indexes found support at or above their rising 50-day moving averages as shown in the first three charts. That has removed any immediate threat to the... READ MORE
ATTEMPT TO DELAY DEBT PAYMENTS RATTLES MARKETS... An attempt by Dubai to delay debt payments for six months has rattled world markets. Most global stock markets fell on Thursday while the U.S. market was closed for the Thanksgiving holiday. That's why U.S. stock markets are dropping... READ MORE
FINANCE SECTOR REMAINS A DRAG... Link for todays video.While the S&P 500 moved higher the last two weeks, the Financials SPDR (XLF) has remained range bound and continues to underperform the broFinance sector remains a dragader market. Chart 1 shows XLF bouncing off support in early November,... READ MORE
ANOTHER DEFENSIVE PLAY... One of the main themes I've been showing over the last few weeks has been the rotation toward large-cap stocks in traditionally defensive areas, mainly consumer staples and healthcare. Yesterday, I wrote about a list of top dividend payers (from a weekend Barron's... READ MORE
EURO UPTREND SUPPORTS STOCKS AND COMMODITIES... As you know, stocks and commodities have been rising most of the year as the U.S. dollar has been dropping. Foreign currencies have also been rising. As a result, a strong positive correlation has existed between the Euro (which has the biggest impact... READ MORE
TRENDLINES AND 50% RETRACEMENTS REACHED... The next three charts show the three major U.S. stock indexes having reached formidable overhead resistance barriers. Charts 1 and 2 show the Dow Industrials and the S&P 500 having retraced 50% of their bear market declines. More importantly, both indexes are... READ MORE
RUSSELL 2000 DECLINES TO IMPORTANT SUPPORT LEVEL... Link for todays video. Small-caps are still lagging the broader market. The Russell 2000 first showed relative weakness as the first of the major index ETFs to break below its early October low. RUT again showed relative weakness in the November rally because... READ MORE
SEASONAL PATTERNS FAVOR THE BULLS ... Link for todays video. According to the Stock Traders Almanac, the best six months of the year are from November 1st to April 30th. The Almanac provides a performance table going back to 1950. Being long stock indices for these six months and switching to... READ MORE
LARGE CAPS HIT NEW HIGHS FIRST... My Friday message wrote about a new recovery high by the Dow Industrials reflecting investor preference for large cap stocks. A buying spree on Monday has pushed several large cap index to new highs as well. Charts 1 and 2 show the S&... READ MORE
SHIFT TOWARD LARGE STOCKS... One of the more obvious discrepancies of late has been between the performance of the Dow Industrials and the Russell 2000 Small Cap Index. While the Dow (blue line) has been the first of the major stock indexes to hit a new recovery high, the RUT... READ MORE
WATCHING THE GAPS... Link for todays video. The major index ETFs gapped higher and closed strong on Monday. Even though trading since the gap has been subdued, the gaps are holding and remain bullish until proven otherwise. Chart 1 shows the Nasdaq 100 ETF (QQQQ) gapping up and closing above... READ MORE
DOW CHANNELS HIGHER... Video Link (click here) The medium-term trends are clearly up for the major indices - but a few are approaching potential resistance levels after sharp advances the last two weeks. Chart 1 shows the Dow Industrials with a rising price channel over the last few months. Notice... READ MORE
HEALTHCARE SPDR HITS NEW HIGH ... With the market pausing after yesterday's strong rally, defensive stocks like consumer staples and healthcare are gaining some ground today. Of those two, healthcare is the stronger. Chart 1 shows the Healthcare SPDR (XLV) breaking out to a new 52-week high today. Also... READ MORE
KEEPING MONEY CHEAP ... The weekend decision from G-20 nations to maintain current global stimulus programs pushed the U.S. dollar sharply lower and global stocks and commodities higher. Foreign currencies surged as well. Chart 1 shows the Euro gapping higher after bouncing off its 50-day average last week. With all... READ MORE
BARRICK AND NEWMONT MINING TURN UP ... With gold hitting new record highs each day, gold stocks are starting to play catch-up. Two of the biggest are at or very close to hitting new 52-week highs. Chart 1 shows Barrick Gold closing at a new 52-week high today. The gray line... READ MORE
ECONOMIC REPORTS STOKE THE BULLS... Video Link (click here) Selling pressure hit after the Feds policy statement yesterday, but the bulls were back in business on Thursday. It appears that a drop in initial jobless claims and a sharp increase in productivity sparked the bulls. Jobless claims decreased by 20,... READ MORE
STOCKS ERASE EARLY GAINS... Video Link (click here) The Fed left rates and its policy statement unchanged. Stocks were up heading into the announcement and just after the announcement, but selling pressure drove the major indices lower in the final hour. Chart 1 shows the Major Indices Market Carpet without... READ MORE
GOLD SURGES TO NEW RECORD IN HEAVY TRADING... Gold prices surged today to the highest level in its long history. Chart 1 shows the streetTrack Gold ETF (GLD) surging the equivalent of $25 dollars to a new record high. The volume bars show that recent trading activity (including today'... READ MORE
GOLD HITS NEW RECORD HIGH... Gold prices have erupted to new record highs today. Chart 1 shows the streetTracks Gold ETF (GLD) breaking through its October highs today on rising volume. Chart 2 shows Silver iShares (SLV) bouncing off chart support at their late-September low and 50-day average. Precious metal... READ MORE
DOLLAR BOUNCE HURTS COMMODITIES ... I wrote a week ago about the U.S. Dollar Index starting to bounce from major support formed in the spring of 2008 near 22 and an oversold condition. I warned that a dollar rally could unsettle stocks and commodities. Chart 1 shows this week'... READ MORE
NO FRIDAY FOLLOW-THROUGH... Heading into Thursday, we had been warning about a downside correction in stocks and commodities (partially owing to a rebound in the oversold dollar). Thursday's stock rally muddied the water a bit. Friday's sharp price drop, however, erased all of the Thursday'... READ MORE
NYSE LEADS REBOUND... Video Link (click here) The harder the fall, the bigger the rebound. After plunging below the 50-day moving average on Wednesday, the NY Composite managed to hold above its early October low with a sharp rebound on Thursday. As chart 1 shows, the string of higher lows... READ MORE
STOCKS DECLINE ON INCREASED VOLUME... Video Link (click here) Selling pressure picked up significantly on Wednesday. All of the major indices were down over 1% with the Russell 2000 leading the way lower (-3.51%). All sectors were lower with energy, finance and materials down over 3%. Declining stocks outnumbered... READ MORE
BANK INDEX DROPS 3% ... A big drop in bank shares is pulling the financial sector lower today and the rest of the market with it. Chart 1 shows the PHLX Bank Index dropping well below its 50-day moving average. If those losses hold through the balance of the day, this... READ MORE
TRANSPORTS FAIL TEST OF SEPEMBER PEAK ... On Monday, I wrote a brief update on the Dow Theory which holds that the Dow Industrials and Transports need to both hit new highs to keep the current uptrend intact. Although the Industrials had already done so, I showed the Dow Transports still... READ MORE
SPRINGING THE BEAR TRAP... Video Link (click here) Fighting the bigger trend is a dangerous game. With a sharp sell-off in the final hour on Wednesday, the S&P 500 ETF (SPY) broke below its prior low to reverse the short-term uptrend. This support break did not last long.... READ MORE
STOCKS FAIL HOLD GAINS... Video Link (click here) Stocks opened strong with positive reactions to earnings from Morgan Stanley, US Bancorp and Yahoo!. However, these gains proved fleeting as selling pressure hit hard in the final hour of trading. Small-caps led the way lower with the Russell 2000 ETF (IWM)... READ MORE
APPLE GAINS 5% BUT REACHES RESISTANCE... Apple shares have gapped 5% higher today. Upside volume over the last two days has been exceptional. That's given a boost to the technology sector. There is one caveat, however, that you should at least be are of. Apple is testing its... READ MORE
COMMODITIES CONTINUE BULL RUN ... The dollar is dropping again and commodities are rising. Chart 1 shows the DB Commodities Tracking Index (DBC) exceeding its early August high after completing a bullish symmetrical triangle. Most commodities are joining the rally. Chart 2 shows the United States Oil Fund (USO) having also... READ MORE
DOW THEORY UPDATE ... One of our readers asked for an update on Dow Theory. Just to refresh your memory, Dow Theory holds that the Dow Industrials and Transports must both hit new highs to confirm an ongoing uptrend. Chart 1 shows the Dow Industrials having already done so. Chart 2... READ MORE
CONSUMER STAPLES SHOW SOME STRENGTH ... For the first time since March, consumer staples are starting to show some market leadership. They were the strongest group on Friday, the third strongest on the week, and second strongest of the last month (behind energy). Chart 1 shows the Consumer Staples SPDR (XLP)... READ MORE