BOND YIELDS RISE ON INFLATION CONCERNS ... Comments from the Fed head that inflation was now his bigger concern sent bond yields sharply higher today on expectations that the Fed may start raising rates to keep inflation under control. Chart 1 shows the 10-Year T-Note Yield closing at the highest level... READ MORE
BEARISH FORCES RETAKE THE MARKET... There have been two consistent themes that myself and Arthur Hill have been stressing in recent Market Messages. One has been that the rally from mid-March is a bear market rally. The other has been that the rally has probably ended. That dual reality was... READ MORE
EURO SURGES AGAINST THE DOLLAR ... The Euro surged against the dollar yesterday on expectations for a European rate hike next month. The dollar is falling today because of the biggest jump in the U.S. unemployment rate in more than two decades (from 5% to 5.5%). Chart 1 shows... READ MORE
EURO SURGE BOOSTS COMMODITIES ... Today's report that the ECB may raise European rates next month to combat inflation pushed the Euro sharply higher today and the dollar lower. Chart 1 shows the Euro jumping 1% today and bouncing off its May low. That lit a spark under most... READ MORE
A TALE OF TWO MARKETS... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The stock market is split in many ways. Small-caps are leading large-caps and techs are leading non-techs. Put another way, large-caps are lagging small-caps and non-techs are lagging... READ MORE
BANK INDEX HITS FIVE-YEAR LOW... The market has suddenly taken a turn for the worse. I suspect part of the reason for the afternoon selling has to do with the fact that the PHLX Bank Index is on the verge of closing at a new five-year low. Chart 1 shows... READ MORE
NASDAQ FAILS AGAIN AT 200-DAY LINE... The Nasdaq has been one of the strongest parts of the market during the recent rally. Today, however, it was the weakest. And it's coming at a bad time. Chart 1 shows the Nasdaq Composite failing for the second time in two... READ MORE
HEAVILY SELLING OF OVERBOUGHT OIL... Earlier today I wrote that energy was the only commodity group that hadn't yet entered into a downside correction. Today may be the day the oil correction finally started. Chart 1 shows the United States Oil Fund (USO) closing 3% lower after trading... READ MORE
BOND YIELDS BREAKOUT TO THE UPSIDE ... On May 13 and 15, I wrote about bond yields forming an apparent "double bottom" pattern and in the process of turning higher. To confirm that view, yields had to exceed their February highs. Charts 1 shows the 10-Year Treasury Note Yield... READ MORE
BANKS WEIGH ON MARKET... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor Banks kept the stock market in check on Wednesday as the Regional Bank HOLDRS (RKH) declined over 1%. Chart 1 shows RKH meeting resistance at the 200-day moving average... READ MORE
S&P 500 BOUNCES OFF 50-DAY AVERAGE... A big drop in oil today gave the stock market a boost. A selloff in bond prices boosted bond yields and supported the dollar. That in turn contributed to profit-taking in commodities. Chart 1 shows the S&P 500 bouncing off... READ MORE
SHORT-TERM SELL SIGNALS ARE GIVEN ... The stock market is on the verge of suffering a downside weekly reversal at important resistance. After failing at its 200-day moving average, the S&P 500 has broken a two-month up trendline and is bearing down on its 50-day moving average. The daily... READ MORE
DEFENSIVE UTILITIES ATTRACT NEW MONEY... With the market showing every sign of rolling over this week, it's no surprise that three of the steadiest market sectors (outside of energy) have been consumer staples, healthcare, and utilities. Of those three, utilities have been the strongest. Chart 1 shows the... READ MORE
KEY SECTORS LEAD BROAD DECLINE... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The Dow lost over 200 points on Monday with major weakness coming from the Finance, Consumer Discretionary and Technology sectors. Finance represents the banks, brokers and insurers, which... READ MORE
DOW TRANSPORTS TEST OLD HIGH... While the Dow Industrials are backing off from their 200-day moving average after recovering about half of their October/March decline (Chart 1), the Dow Transports are testing an important resistance barrier of their own. Chart 2 shows the Dow Transports testing their July 2007... READ MORE
SANDISK DROP UNDERMINES CHIP ... A big afternoon drop in SanDisk undermined a morning rally in semiconductors. Chip selling spread to the Nasdaq and the rest of the market by the close. Chart 1 shows SanDisk falling -7.5% today on the heaviest volume in a month. By day's... READ MORE
COMMODITY COUNTRIES HIT NEW HIGHS... On Monday, I wrote about three foreign stock markets that were at or close to new record highs. Those three markets are Brazil, Canada, and Russia. What all three have in common was that they are producers and exporters of commodities. By the end of... READ MORE
ASK FOR SEASONALLY ADJUSTED GASOLINE ... It seems every central bank in the world is concerned about inflation except ours. I was struck by two conflicting headlines in today's paper. One says "British Bank Chief Expects No Relief From Inflation". The other reads "Price Data Suggests... READ MORE
TECHS LEAD AFTERNOON RETREAT ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor Spurred by a tame reading in the Consumer Price Index (CPI), stocks moved higher in early trading with techs leading the charge. However, a wave of selling pressure hit... READ MORE
BOND YIELDS ARE CLIMBING ... A few weeks ago I suggested that bond yields could be bottoming. Chart 1 shows that could still be the case. After forming a potential "double bottom" during January and March, the 10-Year T-Note yield is now testing its February high. It's... READ MORE
CANADA SHARES NEAR OLD HIGH... My earlier Market Message dealing with emerging markets showed two commodity producers -- Brazil and Russia- acting as global leaders (thanks to rising commodities). Two developed countries that also benefit from rising commodities are Australia and Canada. Chart 1 shows the Toronto Index (TSE) nearing... READ MORE
EMERGING MARKET ISHARES ARE DOING BETTER... One of our readers asked for a look at how emerging are doing. In general, the answer is okay. Chart 1 shows the MSCI Emerging Markets iShares (EEM) having recently cleared its February high and in a short-term uptrend. The solid line is a... READ MORE
MATERIALS SPDR NEARS RECORD HIGH ... Thanks to the ongoing bull market in commodities, material stocks remain in a leadership role. Today's 1.6% gain has made materials the day's strongest market sector. Chart 1 shows the Materials Sector SPDR (XLB) having recently broken above a neckline... READ MORE
FINANCE SECTOR LEADS MARKET LOWER... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor Led by weakness in technology and financials, the stock market moved sharply lower on Wednesday. All of the major indices were down well over 1% with the Dow... READ MORE
FINANCIALS AND RETAILERS IN PARTICULAR... During the recent market rally, one of the resistance lines that we've been watching especially closely is the 200-day moving average. While that long-term line is a support line during bull markets, it's usually a resistance barrier during bear market rallies.... READ MORE
OVERSOLD PRECIOUS METALS STARTING TO BOUNCE ... Precious metals are starting to bounce from an oversold condition and potential chart support. Chart 1 shows the streetTracks Gold ETF (GLD) starting to bounce off potential chart support along its November 2007 high (horizontal line). Its 9-day RSI line (bottom of chart) is... READ MORE
COMMODITY CORRECTION CONTINUES ... The combination of a rising stock market and a bouncing dollar is continuing the recent rotation out of an overbought commodity group. The streetTracks Gold Trust (GLD) hit a four-month low and appears headed toward its 200-day moving averagae (Chart 1). Most other commodities sold off as... READ MORE
FED CUTS RATES ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The Fed cut the federal funds rate and the discount rate by 0.25% each. This is the seventh cut in the federal funds rate since September. At 2%, this... READ MORE
MOST COMMODITIES ARE IN CORRECTIONS... Last Thursday I showed most of the charts shown below to make the point that, outside of energy, most other commodity markets have entered downside corrections. I attributed the reasons for that to be rising U.S. rates, a bouncing dollar, and economic slowing. Here&... READ MORE
WHERE IS 80-WEEK AVERAGE ... One of our readers asked where the 80-week moving average was located on the major market indexes. Charts 1 through 4 show where its daily version (400-day average) is located. The Dow and the NYSE Composite Indexes are right up against that major resistance line. The... READ MORE
DOLLAR STARTS TO BOUNCE ... On Tuesday, I showed that the pullback in gold started in mid-March just as bond yields (and the stock market) were starting to bounce. There are three reasons why gold is pulling back at this point. One is that money has been flowing back into stocks.... READ MORE
LONG-TERM OUTLOOK FOR THE S&P 500 ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor In yesterday's commentary, John Murphy showed how the difference between two long-term moving averages can help determine the long-term trend. I would like... READ MORE
STILL A BEAR MARKET BOUNCE... I've been surprised at the number of questions asking whether the recent stock rebound is the start of a new bull market or just a bear market rebound. In my view, this is still a bear market rebound. The only question in my... READ MORE
RUSSELL 2000 SHOWS RELATIVE WEAKNESS... One of the factors aiding the recent market rebound was a simultaneous rebound in small cap stocks. That small cap support appears to be diminishing. Chart 1 shows the Russell 2000 Small Cap Index (RUT) backing off from the top of its three-month trading range... READ MORE
DOW TRANSPORTS HIT EIGHT-MONTH HIGH ... We've pointed several times the relatively strong performance in transportation stocks. Today's 2% gain pushed the Dow Transports to the highest level since last August (Chart 1). The relative strength ratio (below chart) has been rising strongly since January. That may... READ MORE
GOOGLE SPARKS INTERNET BREAKOUT... The major market indexes are testing the top of their three-month trading range (Chart 1). Today's stock gains are being led by financial and technology stocks. A 17% jump in Google is pushing the Interactive Internet Index to a three-month high (Chart 2). Financials... READ MORE
RISING YIELDS MAY DRIVE SOME MONEY BACK TO STOCKS ... On Tuesday, I wrote about bond yields being in oversold territory and near chart support at their 2003 lows. I also showed that the 10-Year T-Note price was overbought and up against resistance at its 2003 peak. I suggested that rising... READ MORE
BROAD RALLY LIFTS WALL STREET ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor Spurred by positive news from Intel (INTC), JP Morgan (JPM) and Wells Fargo (WFC), stocks surged on Wednesday. The NY Composite and the Nasdaq were both up over... READ MORE
YES, FOOD AND ENERGY COUNT ... I think it's time that the Fed (and the economic community) stopped the charade of not counting food and energy in their inflation calculations. That's where most of the inflation is located. This morning's PPI inflation report was a... READ MORE
GENERAL ELECTRIC TUMBLES 12% ... By now you probably know that General Electric tumbled 12% on Friday on massive volume. The fact that GE is the second biggest stock in the market (and the fact that many consider it a bellwether of the U.S. economy) depressed the rest of the... READ MORE