OVERBOUGHT S&P 500 BACKS DOWN FROM 1000 BARRIER ... The week before leaving on vacation (July 28 to be exact) I wrote a market message warning that both the S&P 500 and the Nasdaq 100 had reached important overhead resistance barriers and were in overbought territory. I... READ MORE
STOCK DROP STARTS IN ASIA... A 5% drop in China's Shanghai Stock Index started a global selling spree that has spread to the U.S. Chart 1 shows China iShares (FXI) gapping down 4.4% and undercutting its 50-day average. Chart 2 shows EAFE iShares (EFA) falling more... READ MORE
FINANCIALS GAIN SOME WEIGHT... Link for todays video. After more than doubling since March, the Financials SPDR (XLF) is now the second biggest sector in the S&P 500. This was surely not the case in March when XLF was trading around 6. The finance was already an important... READ MORE
FED LEAVES RATES UNCHANGED... Link for todays video. With signs the economy is stabilizing, the FOMC voted to keep interest rates unchanged. This means the Fed Funds target rate remains 0-.25%. Moreover, the Fed suggested that rates could stay low for an extended period of time. The Fed also... READ MORE
STOCKS CONTINUE AUGUST STALL... Link for todays video. Stocks moved lower as the Fed began its two day meeting on Tuesday. The FOMC is expected to make its policy statement on Wednesday at 2:15PM, which means we may see some fireworks the next two days. The S&P... READ MORE
13-34 CROSSOVER FOR SPX... Link for todays video. A few readers inquired about the recent crossover in 13-week and 34-week exponential moving averages. John Murphy is the 13-34 specialist, but I can provide some insights until he returns. As the S&P 500 now stands (Thursday), the 13-week EMA... READ MORE
VOLATILITY CONTRACTS FOR QQQQ... Link for todays video. After a surge in mid July, the advance has slowed over the last two weeks and volatility has contracted. Chart 1 shows the Nasdaq 100 ETF (QQQQ) surging above 39 on July 23th and working its way towards 40 the last two... READ MORE
MARKET TURNS MIXED... Link for todays video. Stocks turned mixed on Tuesday. The Russell 2000 ETF (IWM) and S&P 400 MidCap Index (MDY) spent most of the day in positive territory, but the Nasdaq 100 ETF (QQQQ) spent most of the day in negative territory. In the middle,... READ MORE
ITB VERSUS XHB... On Monday, I wrote a bullish message on the homebuilding group and suggested using the SPDR S&P Homebuilding ETF (XHB) as one way to participate in the housing recovery. I pointed out, however, that the XHB has a relatively heavy weighting in a lot of... READ MORE
OVERBOUGHT CONDITIONS REMAIN... Link for todays video. The major index ETFs have remained overbought for two weeks now. Charts 1, 2 and 3 show the S&P 500 ETF (SPY), Nasdaq 100 ETF (QQQQ) and Russell 2000 ETF (IWM) with the Commodity Channel Index (CCI). John Murphy and I... READ MORE
INTERMARKET CHANGES COULD BE BEARISH FOR STOCKS ... Link for todays video. There has been a noticeable shift in the intermarket arena over the last few days. First, lets back up and look at intermarket relationships during the July rally. The S&P 500 bottomed the second week of July... READ MORE
S&P 500 NEARS 1000 RESISTANCE BARRIER ... I wrote recently that an upside breakout in the S&P 500 could push it back to the high of last November near 1000. It is now trading within 20 points (or 2%) of that potential resistance barrier. There's... READ MORE
HOMEBUILDERS RALLY... New home sales in the U.S. climbed 11% last month which is the biggest gain in eight years. Following that report, homebuilding stocks are trading higher. Judging from today's first chart, however, it appears that the market has been anticipating that good news for months.... READ MORE
MICROSOFT FALLS NEARLY 10% ON BIG VOLUME ... A nearly 10% drop in Microsoft is causing some profit-taking in the market today. Because of its huge size, Microsoft carries a lot of weight in the Nasdaq market which is leading today's profit-taking. Chart 1 shows MSFT gapping down nearly... READ MORE
STOCKS EXTEND GAINS WITH BROAD ADVANCE ... Link for todays video. Favorable reactions to earnings reports continued to propel stocks higher. The major indices were all sharply higher on Thursday with small-caps leading the way higher. It is positive to see small-caps showing relative strength. All sectors were also sharply higher... READ MORE
RESISTANCE LEVELS STILL IN PLAY... Link for todays video. Despite new reaction highs from a number technology related ETFs, other key ETFs have yet to exceed their June highs and some are meeting resistance from the June highs. Basically, ETFs trading above their June highs show relative strength, while ETFs... READ MORE
STUDY OF EARLIER SECULAR BEARS... Last Friday, I wrote that any bull market at the current time would most likely be "cyclical" as opposed to "secular". I'd like to elaborate on that distinction. Secular trends are very long term in nature and can last... READ MORE
TREASURY YIELDS HAVE BOTTOMED ... The stock market is a leading indicator of the economy. Historically, stocks usually bottom about six months before the economy. With a stock bottom having formed in March, that leaves a time target for an economic bottom by September. Rising stock prices are one of the... READ MORE
STOCKS TURN HIGHER ... It looks like you can throw out most of what I wrote last Friday. I was expecting a deeper market correction after most market indexes broke short-term head and shoulder "necklines" (and daily EMA lines turned negative). I also wrote about the possible threat from... READ MORE
TECHS CONTINUE TO LEAD ... Link for todays video. The stock market moved higher on Thursday, but participation was a bit more mixed. Eight of the nine sectors were higher with the Financials SPDR (XLF) declining on the day. Technology showed relative strength with the second biggest gain on the day.... READ MORE
SPY SURGES BACK TO JULY HIGH. ... After breaking below its May lows just seven days ago, the S&P 500 ETF (SPY) recouped its July losses with a surge over the last three days. The strength behind the move of the last three days is extraordinary (3 days, 5+... READ MORE
FINANCIAL STOCKS JUMP 6%... A buy signal on Goldman Sachs by a prominent Wall Street analyst and an upgrade on bank stocks gave a big boost to that sector and the rest of the market with it. The Financials Sector SPDR (XLF) climbed 6.4% and it did so on... READ MORE
STOCK INDEXES CONTINUE TO SLIP ... Today's report of another drop in consumer confidence is contributing to more stock selling. Charts 1 through 3 show the downward drift in all three major stock indexes. Another negative sign for the market is that former support levels that have been broken... READ MORE
SPY AND DIA BATTLE SUPPORT... Link for todays video. After sharp declines in mid June and early July, the S&P 500 ETF (SPY) and Dow Diamonds (DIA) are testing support from the May lows. Chart 1 shows SPY with a head-and-shoulders pattern extending back to May. After breaking... READ MORE
YEN GETS A BIG MOVE... Link for todays video. The Yen ETF (FXY) surged over 2% as money moved into relative safety. According to Bloomberg, the Yen advanced against its 16 biggest trading partners (other currencies). The biggest gains came against the South African Rand and the Australian Dollar, two... READ MORE
NASDAS 100 VIOLATES 50-DAY AVERAGE AS VOLATILITY RISES... I wrote yesterday that rising volatility measures for the Nasdaq (VXN) and the S&P 500 (VIX) were starting to rally which would be bearish for stocks. I also showed the Nasdaq 100 threatening to break its 50-day moving average. Chart... READ MORE
BOUNCING VIX TESTS 50-DAY MA... The CBOE Volatility (VIX) Index has been falling since March (as stocks have risen). The VIX peak in March near 53 coincided with the stock market bottom. A falling VIX is good for stocks since they trend in opposite directions. Correspondingly, a rising VIX is... READ MORE
S&P 500 HAS FULFILLED UPSIDE OBJECTIVES FOR NOW ... If you've been reading our market messages over the past couple of weeks, you know that we've called for an end to the spring rally and the start of a normal corrective process. There are several... READ MORE
EMPLOYMENT REPORT ROCKS STOCKS... Non-farm payrolls declined 467,000 for June, which was worse than expected. Stocks took the news hard with a broad based decline in early trading. The major indices were down over 2% around noon. All sector ETFs were lower with the Consumer Discretionary SPDR (XLY) leading... READ MORE
STOCKS GIVE UP EARLY GAINS... Link for todays video. Stocks surged in early trading with the major index ETFs sporting nice gains after the first hour of trading. However, there was no follow through as stocks drifted lower the rest of the day. Charts 1, 2 and 3 show 60-minute... READ MORE
S&P 500 MAY END QUARTER ON FLAT NOTE... A drop in June consumer confidence to 49.3 from May's revised reading of 54.8 has caused some nervous selling in stocks as the market ends the month, quarter, and first half of the year. It remains... READ MORE
RUSSELL RE-BALANCING CAUSES LATE VOLUME SPIKE... In yesterday's message, I showed the Dow and S&P 500 bouncing off chart support near their May lows. The ability to bounce off initial support prevented a more serious breakdown. I also suggested, however, that the late-week bounce could still... READ MORE
DOW AND S&P BOUNCE OFF MAY LOWS... During any market pullback, the first layer of support is usually a previous reaction low. That's why we chose the May low as our initial downside target for the Dow and S&P 500 indexes. Arthur Hill showed... READ MORE
DIA BOUNCES OFF SUPPORT... Chart 1 shows the Dow Diamonds (DIA) bouncing off support from the May lows with a bullish engulfing on Thursday. As DIA tested support, notice that the Commodity Channel Index (CCI) became oversold with the decline below 84. The combination of oversold conditions and support set... READ MORE
INDUSTRIALS AND TRANSPORTS TEST MAY LOWS... After a sharp decline in June, a number of key indices, ETFs and stocks are testing support from their May lows. First up, chart 1 shows the Dow Industrials with support from broken resistance around 8200. This support area was confirmed with a couple... READ MORE
S&P 500 RETESTS 200-DAY AVERAGE ... My final chart on Friday showed hourly bars for the S&P 500 SPDRs starting to back off from overhead resistance starting at 92.76 which translated into 927 for the S&P 500. I suggested that a failure at that... READ MORE
BPNYA TURNS DOWN FROM OVERBOUGHT TERRITORY ... I recently showed the NYSE Bullish Percent Index (BPNYA) having reached overbought territory over 70. the BPNYA is the percent of NYSE stocks that are in point & figure uptrends. I suggested that a drop below the May trough at 68 could signal a... READ MORE
SPY HITS RESISTANCE ON WEEKLY CHART... There is still a compelling case for a stock market correction or decline from current levels. Chart 1 show the S&P 500 ETF (SPY) surging over 40% from its March low without a correction. Even though the spring uptrend remains in place,... READ MORE
SEMIS HOLD THE UPTREND... Link for todays video. The Semiconductors HOLDRS (SMH) remains in an uptrend that has yet to reverse. Chart 1 shows SMH with Andrews Pitchfork (blue lines). The indicators icon is shown at the top of the price chart. After selecting the indicator, users then choose (click)... READ MORE
MCCLELLAN OSCILLATORS ARE NEGATIVE ... One of our readers points out that the McClellan Oscillators for the NYSE (NYMO) and the Nasdaq (NAMO) are both in negative territory and are showing negative divergence from their price indexes. The reader is right on both counts. On May 16, I pointed out the... READ MORE