T-BILLS SHOW MORE CONFIDENCE ... One of the side-effects of the market meltdown since early September has been the sharp drop in the 3-month T-bill rate. Chart 1 shows the 3-month rate falling to zero over the last month as scared investors flocked to the safety of T-bills. [T-bill rates fall... READ MORE
COMMODITES ARE LAST ASSET TO PEAK... A number of readers have asked if I thought the U.S. was in a recession or heading into one. Others have asked if I thought this recession would be worse than most. Although I'm not an economist, it is possible to... READ MORE
STOCKS HIT WITH TRIPLE WHAMMY ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor Bailout hopes gave way to economic realities as stocks were broadsided with selling pressure on Wednesday. First, the Commerce Department reported a sharp decline (1.2%) in September... READ MORE
GLOBAL STOCKS SCORE BIG GAINS ... A huge international rescue plan for banks has finally ingited a strong global stock rally. European gains average 10%. The same is true in Hong Kong. The U.S. market is just following along. This is clearly the best market day since the crisis started... READ MORE
MORE ON VOLATILITY INDEX ... There seems to be a lot of confusion regarding the unusually high readings in the VIX. This may help. The CBOE Volatility (VIX) is currently trading at 75 which is the highest level in its history. That history, however, doesn't extend back to 1987.... READ MORE
NEXT MAJOR SUPPORT ... One of our readers suggested that we get back to basics and simply point out where the next major support levels are located. To do that we have to rely on monthly price charts. In a major bear market, the best way to look for potential support... READ MORE
GLOBAL RATE CUTS FAIL TO INSPIRE... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The Fed, European Central Bank, Bank of England, Bank of Canada and other central banks cut interest rates in an effort to thwart the global financial crisis.... READ MORE
BONDS, GOLD, THE DOLLAR, AND YEN BENEFIT... First the good news. With global stocks and commodities falling sharply today, there were only a few markets that actually made money. Treasury bonds and notes rose as yields tumbled (Chart 1). The U.S. Dollar Index also gained ground as foreign currencies... READ MORE
SELLING SHOULD HAVE BEEN DONE MONTHS AGO... Over the past couple of weeks, I've suggested taking no new action in the stock market. Part of my reasoning is that we've been recommending a bearish strategy for the past year and see no reason to change that.... READ MORE
SMOOTHING OUT PRICE TRENDS ... Arthur Hill wrote yesterday how moving average trends smooth out the market's intra-day swings and help us keep our eye on the over-riding trend which is still down. One of the nice things about moving averages is that they remove emotion from the decision-making... READ MORE
TRANSPORTS FALL TO NINE-MONTH LOW... Up until this week, transportation stocks had held up much better than the rest of the market. Not anymore. Today's plunge in the Dow Transports has pushed that barometer below its July low to the lowest level since January. Its relative strength line,... READ MORE
FINANCIAL SECTOR SHOWS RELATIVE STRENGTH... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The market was mixed on Wednesday as investors waited for the Senate's vote on the bailout package. Despite overall indecisiveness, the Financials SPDR (XLF) showed strength... READ MORE
EURO PLUNGES ON EUROPEAN BAILOUTS ... I've mentioned several times that the recent rebound in the U.S. Dollar was mainly the result of falling foreign currencies, especially the Euro. Never was that more true than today. The Euro's -2.5% plunge against the dollar was the... READ MORE
BONDS, GOLD, AND DOLLAR RISE ... Even before this afternoon's announcement that Congress rejected the massive rescue plan, stock prices were trading sharply lower. That announcement made a bad day even worse and pushed stocks into one of the biggest drops in recent memory. While all market sectors and... READ MORE
MARKETS ARE HOSTAGE TO GOVERNMENT ACTION... I can't ever remember a time when financial markets were so dependent on government action. Like everyone else, I watched with great interest the Congressional negotiations being played out behind closed doors (and in front of TV cameras). The consensus view is... READ MORE
STOCKS ATTEMPT RALLY ... It was exactly a week ago that the stock market started to rally on news that a massive government rescue plan was in the works. That led to two strong updays at last week's end on huge volume. The fact that major stock indexes scored... READ MORE
STOCKS DRIFT LOWER ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The stock market lacked direction today as stocks drifted most of the day. It seems that the market is waiting on something. Hmm, what could it be? With a huge... READ MORE
MORE SUPPLY ISN'T GOOD FOR BONDS... One of the side-effects of the massive government bailout plan is that it is going to have to sell a lot of bonds to raise that money. That means the supply of Treasury bonds is going to increase. When the supply of... READ MORE
DOLLAR PULLS BACK FROM RESISTANCE... On September 12, I wrote about how an overbought U.S. dollar was up against chart resistance. Chart 1 is an updated version of that earlier chart. It shows the U.S. Dollar Index backing off from chart resistance at 80 which was the low... READ MORE
FINANCIALS SURGE ... A massive government rescue plan and a temporary ban on short selling has boosted the Financials Sector SPDR by nearly 12% (Chart 1). It's the day's strongest sector on a day when all sectors are in the black. Brokers (not shown) are up 12%... READ MORE
VIX TESTS 2008 HIGHS ... I wrote earlier in the week that a rising CBOE Volatility (VIX) Index carries both good and bad news. The bad news is that a rising VIX is associated with falling stock prices. The good news is that a high VIX reading is necessary for any... READ MORE
STOCKS GET WALLOPED AGAIN... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor Another broad sell-off took hold on Wall Street Wednesday. All major index ETFs were down sharply with the Nasdaq 100 ETF (QQQQ) losing over 5% and the S&... READ MORE
FED MAY HELP AIG... The Fed's made two important decisions. One was to leave interest rates unchanged. The other was a late Bloomberg report that the Fed is considering a "loan package" to AIG. That report may have contributed to the late market rebound. Financials were... READ MORE
COMMODITIES DROP AS YEN AND BONDS JUMP ... Most attention today was focused on the meltdown in financial stocks and big drops in global stock markets. A lot of action, however, also took place in other financial markets. Crude oil prices tumbled more than $5.00 to crack psychological support near... READ MORE
BROKERS ARE BEING HIT HARD ... A combination of unprecented weekend financial events have put global stocks under heavy pressure. Lehman filing for bankruptcy, Merrill being sold to Bank of America, and AIG scrambling to stay afloat have created a financial storm in early trading. Bonds are the only asset class... READ MORE
SHORT VERSUS LONG-TERM COMMENTARY... Some of our readers have expressed confusion about the tone of some recent messages. They feel we sound bullish one day and bearish the next. I think those readers are confusing short-term comments with our long-term view. On Monday, for example, I wrote about the strong... READ MORE
NEW LOWS OUTPACING NEW HIGHS... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The 10-day simple moving average (SMA) for Net New Highs is a good medium-term indicator to assess broad market strength or weakness. Net New Highs equal new 52-week... READ MORE
A RISING VIX IS USUALLY BAD FOR STOCKS ... On Friday August 29, I wrote a Message about the CBOE Volatility (VIX) and the CBOE Put/Call Ratio (CPC) being too low to support a market rally. As far as I can see, that situation hasn't changed. Chart 1... READ MORE
HOMEBUILDERS AND REITS HAVE STRONG DAY ... The government's weekend takeover of Fannie Mae and Freddie Mac gave a boost to global stocks today. Among the biggest gainers were those related to housing and real estate. Charts 1 and 2 show the PHLX Housing Index and the Dow Jones... READ MORE
STOCKS FIRM AFTER EMPLOYMENT REPORT... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor The Labor Department reported that 84,000 jobs were lost in the month of August. Non-Farm Payrolls have declined for eight straight months now. Incidentally, the S&... READ MORE
BROAD SELLING RATTLES WALL STREET... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor Stocks were broadly lower on Thursday. The major market indices were all down around 3% with remarkably equal declines. Usually, the Nasdaq (techs) and Russell 2000 (small-caps)... READ MORE
SEMIS GET SLAMMED... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor Semiconductor stocks led the technology sector lower with steep losses on Wednesday. Charts 1 and 2 show the Semiconductor HOLDRS (SMH) and Semiconductor PowerShares (PSI) dropping sharply over the... READ MORE
ENERGY STOCKS LEAD THE MARKET LOWER... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor A sharp decline in crude sparked broad selling pressure in energy stocks on Tuesday. The Energy SPDR (XLE) led the sectors lower by declining over 5%... READ MORE
SEPTEMBER IS USUALLY WEAKEST MONTH ... Earlier in the week I wrote that September and October were two of the most dangerous months of the year. A number of readers asked me to elaborate on that. Most seasonal patterns are taken from the Stock Trader's Almanac which contains a... READ MORE
OIL FALLS AND DOLLAR RISES ... A surprisingly strong second quarter GDP report helped the U.S. Dollar turn in another strong day. Chart 1 shows the Power Shares US Dollar Bullish ETF (UUP) closing near a new recovery high today. That continues the dollar uptrend that started a month ago.... READ MORE
STRONGER SECOND QUARTER GDP BOOST MARKET... At midday, the stock market is holding onto some impressive price gains. One of the drivers is stronger-than-expected second quarter GDP growth. Another factor is a strong performance by financials and consumer discretionary stocks. All are showing short-term chart improvement. Chart 1 shows the... READ MORE
QQQQ FINDS SUPPORT AT BROKEN RESISTANCE... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The Nasdaq 100 ETF (QQQQ) found support near its resistance break on Tuesday and bounced with a modest advance on Wednesday. Chart 1 shows the ETF surging... READ MORE
FINANCIALS AND DISCRETIONARY STOCKS ARE FALLING... Little has changed from the market messages that I posted last week. Friday's low-volume bounce was just a minor interruption in the market's deteriorating technical condition. The market is starting the new week on a decided down note, and it&... READ MORE
CRB BOUNCES OFF SPRING LOW... Last week I wrote about the Reuter/Jefferies CRB Index testing chart support at its March low near 380. So far, that support has held. The CRB Index rose nearly 15 points today for one of its biggest gains in years. Chart 1 also shows... READ MORE
CONSUMER DISCRETIONARY STOCKS FAIL IMPORTANT TEST ... Last Friday I showed the Consumer Discretionary SPDR (XLY) testing its 200-day moving average. So far, it looks like that test is failing. Chart 1 shows two unsuccessful attempts to get through the major resistance line over the past week. Charts 2 and 3... READ MORE