RALLY ATTEMPT APPEARS TO BE FAILING ... Last week we wrote about the likelihood of the bear market rally running into new selling near the November lows just above 1400 in the S&P 500. That number translates into 12750 in the Dow (Chart 2). The downturn over the past... READ MORE
JANUARY BAROMETER PREDICTS BAD YEAR ... I haven't heard anyone in the media talking about the January Barometer, which is based on the view that "as January goes, so goes the year". That's probably because they only talk about it when the market has a... READ MORE
JANUARY BRINGS MONEY BACK INTO FINANCIALS... Although January was a bad month for the market, there were some sector rotations going on beneath the surface. To put things into perspective, Chart 1 plots two leaders (energy and technology) and two laggards (financial and consumer discretionary stocks) against the S&... READ MORE
FED CUTS AGAIN... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The Fed cut the Fed funds rate 0.5% to 3% this afternoon. This is the second cut in the last nine days and the sixth rate cut since August... READ MORE
WORLD MARKETS FALL TOGETHER ... Just before leaving on my trip to Europe, I expressed serious skepticism about the recent theory of global decoupling. Holders of that questionable theory were brought back to reality by the plunge in Asian and European markets the following Monday (while the U.S. market was... READ MORE
GOLD AND SILVER SURGE... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor The streetTRACKS Gold ETF (GLD) and the Silver ETF (SLV) surged this past week. On the commodity exchanges, gold broke back above $900 and silver moved back above... READ MORE
A LOOK AT THE BIGGER PICTURE... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor The S&P 500 has experienced two big trends over the last eight years. Let's look at these big trends to understand more... READ MORE
SMALL-CAPS LEAD MARKET REBOUND... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor The stock market rebounded in the afternoon with the Russell 2000 leading the major indices higher. This small-cap index gained over 3% and market volume was well above... READ MORE
FED CUTS RATES TO BOLSTER STOCKS... Today's Market Message was written by Arthur Hill. John Murphy will return next week. - Editor With stock markets around the world falling sharply on Monday, the Fed stepped in ahead of schedule by cutting both the Fed funds rate and the... READ MORE
SO MUCH FOR GLOBAL DECOUPLING ... I've expressed reservations before about the recent theory of global decoupling. The reasoning was that foreign markets would remain relatively immune to a major selloff (and possible recession) in the U.S. That view struck me as strange, especially with the close correlation... READ MORE
AUGUST LOWS ARE BROKEN ... On Tuesday, I wrote that a break of the August lows by the Dow, the S&P 500, and the Nasdaq Composite would confirm that the stock market has entered into a new bear trend. The reasoning comes down to a simple definition of a... READ MORE
COPPER WAS OLD LEADER ... A lot of questions have cropped up this week about what commodities as an asset class do in an economic downturn, and which commodities (if any) are more immune. During a recession (which often follows a stock market peak), most commodity markets do suffer pullbacks. Some... READ MORE
U.S. DOLLAR INDEX SURGES ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor Comments from the European Central Bank (ECB) sent the euro tumbling and the U.S. Dollar Index ($USD) surging on Wednesday. Yves Mersch, an ECB council member, commented... READ MORE
MORE OF THE SAME... With each passing day, the economic news keeps getting worse. Today it was terrible fourth quarter earnings by Citigroup and very weak retail spending. As a result, financial and consumer discretionary stocks were the day's biggest losers as they've been doing for... READ MORE
LAND OF THE RISING YEN ... Last August 14, I showed this same chart with a warning that the rising Japanese yen threatened the global carry trade. At the time, the yen/dollar chart was just breaking through its two-year down trendline (see circle). Since then the chart has gotten a... READ MORE
CRB HITS NEW RECORD... Commodity markets are on a roll. As evidence of that, the Reuters/Jefferies CRB Index is trading over 370 today for the first time in its history (Chart 1). That puts the commodity index well above its spring 2006 high. And the rally is broad-based with... READ MORE
DOWNSIDE WEEKLY MOMENTUM LIMITS DAILY BOUNCES... I keep emphasizing the importance of long-term indicators. That's why I wrote yesterday that I doubted that the mid-week rally attempt would get very far in the face of deteriorating weekly and monthly technical indicators. "Daily" charts give us a... READ MORE
BERNANKE BOUNCE ... The stock market continued the short-term bounce that began with yesterday's upside reversal day. The 5-minute bars in Chart 1 show two bursts of buying taking place at 12:15 and 2:15 in the S&P 500 SPDRs. The 12:15 spurt came courtesy... READ MORE
OVERSOLD TECHS FIND SOME FOOTING... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor After becoming oversold, the stock market rebounded on Wednesday with techs leading the way. As Chart 1 shows, the Nasdaq 100 ETF (QQQQ) gained over 2% and formed... READ MORE
AT&T PLUNGE STARTS SELLOFF... It's always dangerous to attribute a market selloff to one stock, especially a market that has so much working against it. Today, however, a plunge in the stock of AT&T starting around 2:30 may have started the late selloff... READ MORE
WEAKNESS IN THE DOW TRANSPORTS IS BAD SIGN ... A lot of information (both market and economic) can be found in the interaction between the three Dow Averages. The most common is the relationship between the Dow Industrials and Transports, which is referred to as Dow Theory. That theory holds that... READ MORE
S&P 500 THREATENS 400-DAY MOVING AVERAGE... During the August market drop, I wrote about the importance of the 400-day moving average as a major support line. [That line is gotten by converting the 20-month moving average to a daily line. I'll show why we use that... READ MORE
MONTHLY INDICATORS WEAKEN ... It's very easy to get caught up in daily (and even weekly) market swings. That's especially true for those of us who follow the markets on a daily basis. There's an awful lot of confusion about the state of the stock... READ MORE
STOCK MARKET WEAKNESS CONTINUES... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor Stocks pulled back on low volume after Christmas, but volume and the decline picked up steam on Wednesday. Both the Nasdaq Composite and the NY Composite fell sharply on... READ MORE
2007 SECTOR LEADERS ARE MOSTLY DEFENSIVE... One of the trends that we've commented on over the past few months has been steady outperformance by more defensive sectors in the market. Chart 1 shows that the 2007 leaders (in descending order) are Energy, Materials, Utilities, Consumer Staples, and Healthcare.... READ MORE
AN ISLAND REVERSAL FOR DIA ... Today's Market Message was written by Arthur Hill. - Editor The Dow Industrials ETF (DIA) held above its November low by forging an island reversal over the last two weeks. On Chart 1, DIA peaked on 11-Dec when the Fed issued its policy... READ MORE
SANTA CLAUS RALLY... One of the most valuable investment books that I use is the annual Stock Trader's Almanac published by Jeffrey and Yale Hirsch. The book is published each year and contains a wealth of seasonal market information. I rely on it quite heavily as do many... READ MORE
MORE FOREIGN BREAKDOWNS ... On Tuesday, I showed a list of eleven foreign stock ETFs that had fallen below their 200-day moving averages. I showed a list of four foreign ETFs challenging that long-term support line. Two of those broke down today. Charts 1 and 2 show the Australia iShares (Chart... READ MORE
IWM BATTLES SUPPORT ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor There is a big battle raging at support for the Nasdaq 100 ETF (QQQQ) and the Russell 2000 ETF (IWM). Chart 1 shows the long-term trend with weekly prices for... READ MORE
GLOBAL INDEXES SHOW WEAKNESS... One of the new ideas I keep hearing is that foreign stocks are relatively immune from an economic slowdown in the U.S. While a weaker dollar has helped keep foreign markets stronger than the U.S., I'm skeptical of the theory of "... READ MORE
INFLATION NUMBERS BOOST BOND YIELDS... A rate cut by the Fed on Tuesday, and a coordinated infusion of funds by central bankers on Wednesday, weren't enough to keep the market from falling. Part of the reason for selling late in the week was big inflation jumps in the... READ MORE
QQQQ BATTLES RESISTANCE ... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The Nasdaq 100 ETF (QQQQ) is waging a major battle around resistance at 52. The gaps and breakouts over the last few weeks are holding, but a rising wedge is... READ MORE
FED CUTS TWO RATES BY A QUARTER POINT ... The market was more than a little disappointed by the two modest rate cuts by the Fed and its accompanying statement. It lowered both the Fed fund and discount rates by a quarter of a point. Apparently, the market was hoping for... READ MORE
DOW THEORY DIVERGENCE... One of our readers asked for an update on Dow Theory, which is the oldest of technical indicators. Simply put, the Dow Theory holds that a new high by either the Dow Industrials or the Dow Transports should be confirmed by the other. When one hits a... READ MORE
HEALTHCARE IS ONE OF NEW MARKET LEADERS ... In response to a question about how I go about my daily analysis, I used the Market Summary page yesterday to show new buying in small caps, financials, and energy stocks. Today, I'm going to show how to use the Performance... READ MORE
S&P 500 BREAKS THROUGH CHART SUPPORT ... Earlier today, I wrote about the more positive tone of the market with new signs of strength in small caps and financials. By day's end, those two groups (along with homebuilders and energy) helped the S&P 500 (and... READ MORE
SMALL CAPS LEAD FOR A CHANGE... One of our readers asked how I go about making sense of so much market data on a given day. One of the places I start with is the Market Summary page. I'll use some of today's data to show... READ MORE
BIG TECHS PUSH MARKET HIGHER... Today's Market Message was written by Arthur Hill. John Murphy will return tomorrow. - Editor The Nasdaq 100 ETF (QQQQ) led the market higher on Wednesday. On Chart 1, we can see that the surge above 51 is keeping last week's... READ MORE
S&P 500 BACKS OFF FROM RESISTANCE ... Last week I wrote about two longer-range moving averages based on Bollinger band values. I showed support at the 20-month (400 day) moving average line and resistance at the 20-week (100-day) average. I stated that the S&P needed to clear... READ MORE
USING P&F CHARTS FOR LONGER-TERM SIGNALS... One of our readers asked if point & figure signals could be used for intermediate and long-term trading signals. The answer is yes. Chart 1 uses a 1% box size for the S&P 500 which I find works well for... READ MORE