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SystemTrader - In-Sample and Out-of-Sample Results for Two Momentum Systems - Measuring Performance and Drawdowns

by Arthur Hill

Revisiting Two Momentum Systems from 2017. A Simple Momentum Rotation System. Live by the Sword, Die by the Sword. A Trend-Momentum System with a Profit Target. Successful and Unsuccessful Trades. In-Sample and Out-of-Sample Performance. Drawdowns are Unavoidable. Conclusions and Takeaways. Consulting, Software and Data. Revisiting Two Momentum Systems I introduced several  Read More

FOMC Minutes Spook Traders, Equities Tumble In Final Two Hours

by Tom Bowley

Market Recap for Wednesday, February 21, 2018 Well, the U.S. stock market was humming right along..until the FOMC minutes were released at 2pm EST.  Take a look at this intraday chart on the Dow Jones and S&P 500 and I think you'll fairly quickly realize that something happened just after 2pm: I don't believe interest rate fears are spooking traders.  I think it's potential  Read More

DP Alert - ST Indicators Suggest Pullback

by Erin Swenlin

The NDX switched back to a Short-Term Trend Model BUY Signal on the DecisionPoint Scoreboards. The 5-EMA crossed above the 20-EMA which triggered the signal (the chart is below the scoreboards for your review). The purpose of the DecisionPoint Alert Update is to quickly review the day's action, internal condition, and Trend Model status of the broad market (S&P 500), the  Read More

2/21 MarketWatchers LIVE Recap - Guest, Greg Schnell - DecisionPoint Report

by Erin Swenlin

  Welcome to the recap of today's MarketWatchers LIVE show, your antidote for the CNBC/FBN lunchtime talking heads. Listen and watch a show devoted to technical analysis of the stock market with live market updates and symbols that are hot. You'll find the latest episode here. Information abounds in our Monday through Friday 12:00p - 1:30p  Read More

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Emerging From The Correction The Best And Worst Looking Sectors

by Martin Pring

General market thoughts Sectors under pressure Stronger looking sectors General market thoughts My thoughts on the recent correction is that we have likely seen the low, that more ranging action is likely, probably involving a test of that low, but that eventually US equities will see new bull market highs. Two points come to mind. First, everyone and his dog has come to the  Read More

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STRONG TECH SECTOR CONTINUES TO SUPPORT MARKET -- FINANCIALS, CYCLICALS, AND INDUSTRIALS ARE ALSO LEADING

by John Murphy

TECHNOLOGY SECTOR CONTINUES TO SUPPORT MARKET My last sentence from yesterday's message was that the stock market was unlikely to suffer any serious short-term damage as long as technology stocks kept rising. That's because technology is such a big part of the stock market. And they're rising again today. The daily bars in Chart 1 show the Technology Sector SPDR  Read More

Regional Bank ETF Rises to the Top

by Arthur Hill

Even though I am currently in the "correction" camp for the broader market, there are clearly pockets of strength in some key groups. The Software iShares (IGV), Cyber Security ETF (HACK), Internet ETF (FDN) and Networking iShares (IGN) are leading the technology rebound and all are close to new highs. In addition, the Bank SPDR (KBE) and Regional Bank SPDR (KRE) are up over 1% so far today and  Read More

Walmart Results Take A Big Bite Out Of Dow Jones, Ends Winning Streak

by Tom Bowley

Market Recap for Tuesday, February 20, 2018 Selling returned to Wall Street as its six day winning streak came to an end.  The Dow Jones was easily the biggest loser as Walmart, Inc (WMT) disappointed traders with its latest quarterly earnings report and had its worst trading day in many years, dropping more than 10%.  Here's a quick look at WMT's chart: While Tuesday's selling was  Read More

Palo Alto Networks Closes On A New High

by Greg Schnell

Palo Alto Networks (PANW) has been climbing nicely off a huge gap down on earnings in late February 2017. Unfortunately for the investor it has been a round trip back to the beginning. On Tuesday's weak overall tape where the Dow was down 250, PANW pushed up to close at a new high. That's bullish.  This year, PANW will be reporting earnings on Monday, February 26th  Read More

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SEMICONDUCTORS LEAD THE NASDAQ AND TECHNOLOGY SECTOR HIGHER TODAY -- CHIP LEADERS INCLUDE APPLIED MATERIALS, KLA-TENCOR, AND LAM RESEARCH

by John Murphy

SEMICONDUCTOR ISHARES HAVE A STRONG DAY Semiconductor stocks are the strongest part of the market today. Chart 1 shows the PHLX Semiconductor iShares (SOXX) trading more than 2% higher today and moving further above its 50-day moving average. The SOXX has also risen above its 20-day moving average (green line). The SOXX/SPX relative strength ratio  Read More

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Never Short a Dull Market or Go Long a Volatile One

by Arthur Hill

Go Long a Volatile Market? Setting Correction Targets for S&P 500. Leaders and Laggards During the Rebound. Scanning for Percent from High. Semis, Housing and Transports Lag. "Never short a dull market" is an old Wall Street saying. Even though we cannot build a strategy on a saying, there is usually some truth to be found. The stock market, as measured by the S&P 500, was quite dull  Read More

Traders Turn Defensive As Key Fibonacci Retracement Level Reached - Bearish

by Tom Bowley

Market Recap for Friday, February 16, 2018 On the surface, Friday's action didn't seem all that bad.  While there was bifurcated action, three of our four major indices did finish in positive territory.  The aggressive small cap Russell 2000 ($RUT) led the advance.  Only the NASDAQ finished in negative territory.  The benchmark S&P 500 only gained a point, but it did  Read More

The Law of Cause and Effect in Action

by Bruce Fraser

The Law of Cause and Effect is a cornerstone principle of the Wyckoff Method. Cause building on the chart precedes the Effect of a Markup or a Markdown. Wyckoffians meticulously study trading ranges on the charts for Accumulation or Distribution characteristics. Analysis of Phases (Phases A thru E) track the progression of the activities of the Composite Operator (C.O.) in their operations. In  Read More

Building a Rules-Based Trend Following Model - 5

by Greg Morris

The significant components of my Weight of the Evidence are Price Measures and Breadth Measures.  All of my Price Measures use the Nasdaq Composite Index which I have written about many times.  If using the same price, then the difference between most price indicators is to offer varying time periods; short, medium, and long.  Breadth on the other hand, can offer many different  Read More

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Some Equity Markets Showing Signs Of Long-term Vulnerability

by Martin Pring

Pinocchio argues for a test of the lows European equities are facing a big challenge Shanghai starting to look sick Pinocchio argues for a test of the lows Last week I suggested that the S&P had reached a resistance zone following its bounce from the early February panic low. You can see this from Chart 1. That led me to the conclusion that a test of those lows was a good  Read More

Recent Pullback in Commodities Is Likely Tied to Stock Correction

by John Murphy

My January 27 message wrote about a bullish breakout in commodity prices to the highest level in two years. I took that as another sign that inflation pressures were starting to build. The weekly bars in Chart 1 show that bullish breakout taking place in the Bloomberg Commodity Index (circled area). During February, however, commodity prices have sold off enough to call that upside breakout  Read More

A Model For S&P 500 Bottoms (Are We There Yet?)

by Tushar Chande

Here I explore recent key lows and bottoming patterns in the S&P 500 in order to understand how they may apply to the current market decline. Naturally, the past may give us clues, but there is always uncertainty about how the bottom will form this time.  For obvious reasons, I will ignore "V" bottoms, that often form during up-trends, since they require no further elaboration.    Read More

Big Scores Made Possible through Extreme Patience

by John Hopkins

I'm sure most traders get tired of being told to be patient when the market or a specific stock is climbing day after day. Missing out on nice rallies can be extremely frustrating. But if there ever was a time when patience paid off big time it was over the past few weeks. Before I share the results of some recent trade results with you I want to point out our formula at Earnings Beats, because  Read More

Natural Gas In February - Yes Really

by Greg Schnell

Natural Gas has been testing the $2.60 level for two weeks now. I have placed arrows around the centre of the first quarter in each of the last six years. By watching Natural Gas closely right now, there can be a great 4-6 week trading opportunity that is not correlated to the equity market indexes.  Zooming in on the daily, Natural Gas is testing the lows. I have included the Commodity  Read More

History And Fibonacci Say We Topped On Friday

by Tom Bowley

Fear ramped up with the early February selling and a capitulatory bottom (at least short-term) printed.  The Volatility Index ($VIX) doesn't hit the 40-50 zone often and, when it does, it typically coincides with a panicked selloff and bottom.  The last time we saw panicked selling (before the past few weeks) was in August 2015.  Let's take a trip down memory lane: The drop was a  Read More

Where Did All Those New Lows Come From?

by Arthur Hill

Stocks rebounded this week as the S&P 500 Equal-Weight Index ($SPXEW) recovered most of the losses from the previous week. On a closing basis, the index fell around 10% in nine days and then recovered around half of this loss with a 5.4% gain the last six days   What a ride! Despite the strong recovery, the 10% decline did some technical damage and I was surprised by the  Read More

DP Weekly Wrap: Bear Market Rally Over?

by Carl Swenlin

Last Friday the market executed a bullish intraday reversal, and this week it rallied five days straight; however, there were some problems. S&P 500 volume contracted into the rally, and Friday's candlestick was a bearish shooting star. I don't really use candlesticks much, but the shooting star is a fairly reliable sign of a short-term top. Another troublesome issue is the OBV reverse  Read More

2/16 MarketWatchers LIVE Recap - Bull/Bear Market Rules - Mailbag - Sentiment Update

by Erin Swenlin

  Welcome to the recap of today's MarketWatchers LIVE show, your antidote for the CNBC/FBN lunchtime talking heads. Listen and watch a show devoted to technical analysis of the stock market with live market updates and symbols that are hot. You'll find the latest episode here. Information abounds in our Monday through Friday 12:00p - 1:30p  Read More

Bull or Bear Market Rules?

by Erin Swenlin

Today on MarketWatchers LIVE, I did a workshop on bull and bear market rules. You'll hear many technicians discuss "bull market rules apply" or vice versa. The question is pertinent and timely right now. The jury is still out on whether we are about to enter a bear market phase but that doesn't mean that you don't want to think about 'bear market rules'. We are currently in a bull market. Based  Read More

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RECENT PULLBACK IN COMMODITIES IS LIKELY TIED TO STOCK CORRECTION -- COPPER AND OIL ARE STILL IN UPTRENDS

by John Murphy

COMMODITY PULLBACK IS TIED TO STOCKS My January 27 message wrote about a bullish breakout in commodity prices to the highest level in two years. I took that as another sign that inflation pressures were starting to build. The weekly bars in Chart 1 show that bullish breakout taking place in the Bloomberg Commodity Index (circled area). During February, however  Read More

Two Icons Reveal the Same Secret to Success

by Gatis Roze

Steve Jobs famously challenged everyone when he said, "We're here to put a dent in the universe.  Otherwise, why else be here?" I was fortunate recently to spend a couple of days in Napa Valley at the DENT 2018 conference. There's nothing like spending quality time with lots of exceptional people to get oneself re-energized and refocused  Read More

VeriSign (VRSN) Breaks Out To New Highs

by Greg Schnell

VeriSign (VRSN) is showing signs of a powerful breakout. The SCTR ranking is surging above 75. The Relative strength is making new 2-month highs and not far from its all-time highs. The price is breaking out shortly after the big pullback in the overall market suggesting more strength. There is lots to like about the chart. If it fails to hold the breakout, I'd let it go. We released  Read More

Gold Tries To Breakout 2018-02-15 Video

by Greg Schnell

Gold is trying to breakout again. We have seen this movie multiple times. The big question is the US Dollar.  The five year picture for Gold is even more interesting. What makes the gold trade more compelling is the breakout in the Yen. So that looks pretty good. More in just a little bit lower on this article. I will be on MarketWatchers Live on Wednesday February 21st to cover  Read More

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Weekly Market Review & Outlook (with Video) - Rubber Band Rebound

by Arthur Hill

Rubber Band Rebound. A Bearish Breadth Thrust. High-Low Percent Indicators Weaken. %Above Indicators Remain Bullish. Weight of the Evidence. SPX Clears 50-day as VIX Falls. Small-caps Take the Internal Lead. Scan Code for Top ROC. Tech-Related Industry Groups Lead. Notes from the Art's Charts ChartList. Rubber Band Rebound Stocks rebounded sharply this week with the S&P  Read More

Grading The Current Rally - Is It Sustainable?

by Tom Bowley

Market Recap for Thursday, February 15, 2018 Selling is inevitable during bull markets.  After each leg higher, there's typically a period of selling/consolidation.  The bulls were spoiled for several months, as the bull market advance continued nearly uninterrupted.  There really hadn't been any notable selling or consolidation since the August 2016 high.  From there, the  Read More

Painting the US equity landscape using Relative Rotation Graphs

by Julius de Kempenaer

Relative Rotation Graphs are a great tool to visualize sector rotation and that is probably where you will see them applied most. But they can be used for so many more (rotational) variations of different universes or similar universes in a different way. In this post, I will show you how we can use Relative Rotation Graphs to visualize rotation in US Equity markets based on growth, value  Read More

2/15 MarketWatchers LIVE Recap - RRG with Creator Julius de Kempenaer - Anatomy of a Trade

by Erin Swenlin

  Welcome to the recap of today's MarketWatchers LIVE show, your antidote for the CNBC/FBN lunchtime talking heads. Listen and watch a show devoted to technical analysis of the stock market with live market updates and symbols that are hot. You'll find the latest episode here. Information abounds in our Monday through Friday 12:00p - 1:30p  Read More

Gold Tests The Breakout Again

by Greg Schnell

The chart of Gold is getting interesting again. It keeps retesting this level. There are reasons to believe the breakout is at hand. I have used GLD to represent Gold here. The MACD is turning up above zero for the first time in 18 months shown on the chart. This is also the two year anniversary of the commodity low in 2016 when everything started to kick up. One of the reasons that Gold is  Read More

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Time For Some Temporary Grief In The Equity Market?

by Martin Pring

Path of recoveries from recent declines have been mixed S&P is at short-term resistance Some reliable short-term indicators not quite there yet Yen breaks out from a large base Path of recoveries from recent declines have been mixed After five straight up days since the February 9 intraday low, it's probably a good time to review how other contra trend corrections have  Read More

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Oil Bounces off Breakout Zone - Plus XES, HAL and an S&P 500 Update

by Arthur Hill

Indicators Improve as S&P 500 Follows Through. A Retest of the February Low? Monitoring the Pennant Breakout. Oil Bounces off Breakout Zone. Use Continuous Contract Long-Term. Oil & Gas Equip & Services SPDR Firms. Haliburton Returns to Breakout Zone. Indicators Improve as S&P 500 Follows Through Stocks bounced with the S&P 500 closing at its highest level  Read More

Wall Street Shakes Off Inflation Worries, Retail Slump; Rallies For 4th Straight Session

by Tom Bowley

Market Recap for Wednesday, February 14, 2018 Wall Street sure did look like it was heading for a very rough day at 8:30am EST on Wednesday.  Very poor economic news hit traders with a 1-2 punch as the consumer price index jumped 0.5% instead of the 0.3% that everyone was expecting.  On the heels of that, we saw the worst retail sales report in 11 months.  Retail sales   Read More

2/14 MarketWatchers LIVE - Charles Kirkpatrick, Author/CMT - Under the Radar

by Erin Swenlin

  Welcome to the recap of today's MarketWatchers LIVE show, your antidote for the CNBC/FBN lunchtime talking heads. Listen and watch a show devoted to technical analysis of the stock market with live market updates and symbols that are hot. You'll find the latest episode here. Information abounds in our Monday through Friday 12:00p - 1:30p  Read More

DP Alert: Bullish Indicators - Gold Surges...For Now

by Erin Swenlin

The DecisionPoint Scoreboards didn't show any improvement from last week as the neutral and sell signals remained in the short term. PMO SELL signals are not yet on the weekly charts for these indexes, but they are lining up. If we see a pullback on the recent rally, we will likely see these PMO Sell signals on the Scoreboards this Friday or next. For a look at those charts, go to the  Read More

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STOCKS RECOVER FROM HIGHER INFLATION REPORT -- NASDAQ 100 IS FIRST INDEX TO REACH 50-DAY LINE

by John Murphy

MAJOR STOCK INDEXES BOUNCE BACK FROM EARLY SELLING January's CPI report came in higher than expected and caused stocks to open lower. The headline reading of 2.1% and core reading (excluding food and energy) of 1.8% were higher than economists were expecting. After opening lower, stocks regained their footing and are now in positive territory for the day. The 10-minuteRead More

A Short-term Disconnect between VIX and SPY - Watch the Pennant

by Arthur Hill

There is another disconnect working between the VIX and SPY. The S&P 500 SPDR (SPY) opened weak with a dip below 265, but the S&P 500 Volatility Index ($VIX) also declined. This is an interesting dynamic because the VIX usually moves opposite of SPY. I am also intrigued that SPY opened weak and quickly rebounded.  Note that this disconnect could also be due to the options  Read More