Trend Check with Tushar Chande

Tushar Chande
About the author: , PhD, MBA, is the inventor behind an impressive collection of technical indicators, including the Aroon and Stochastic RSI. He has written several books, holds both a PhD in Engineering and an MBA in Finance, and has over two decades of experience trading the financial markets. Follow Tushar in this blog as he highlights his new "Trend Meter" indicator and shares his analysis of current market conditions.

Latest Posts

Trend Check with Tushar Chande

Organizing Your Trading Strategy By Trend Strength (Or, How to Make Sense of Jim Cramer's Stock Picks)

by Tushar Chande

If you watch Jim Cramer's Mad Money show on CNBC for a week, you will hear about so many stock picks (symbols) that it might drive you crazy.  He spews so many symbols, that in a month's time you will  be easily overwhelmed.  So here is a useful chart to put into perspective any stock picks you encounter in the mass media or blogs such as this one.   Chart 1:  The stocks in the S&P 500 universe are distributed along a line stretching from lower left (weakest stocks) to the upper right (strongest stocks).  Many stocks are in a neutral zone, roughly Read More 

Trend Check with Tushar Chande

How High for the Summer Rally?

by Tushar Chande

Green shoots of a summer rally appeared this week after the Dow cracked resistance at 25,000 and held the breakout.  The summer rally is often viewed as a 13% move from the lows in May/June to the highs in July/August/September.  This week the market made it about half way there (see Chart 1).   There is much resistance overhead, but the market if off to a good start towards a Summer Rally this year.   Chart 1: The historical range for the summer rally is about 13% from the May/June lows to the summer highs, and we are off to a good start. Read More 

Trend Check with Tushar Chande

My S&P 500 Year-End Forecast is More Pessimistic than Wall Street's

by Tushar Chande

Do earnings mean anything as geopolitical uncertainties move to the front burner?  Earnings and P/E ratios are what Wall Street uses for its forecasts, but will these forecasts be swamped by current events or future crises?  In December, 2017, I predicted a 2018 year-end close of 2750 on the $SPX (see Chart 1), and I expected a flat and volatile year.  After zooming higher in January, the market has come down to my forecast line (see Figure 2).  The most recent Wall Street forecasts range from 2750-3150 (see Chart 2), spanning the upper region of my year-end forecast Read More 

Trend Check with Tushar Chande

Small Caps and Technology Lead as Broad Market Builds Support

by Tushar Chande

The market's internals have improved since the double bottom and small cap and technology stocks are comfortably ahead of the large stock indexes on a YTD basis (see Figure 1).  This is bullish for the market as a whole, even as indexes pause to build support (see Figure 2).  The underlying trend picture has improved on an index basis (see Figure 3) and capitalization basis (see Figure 4).  The dollar is strong, along with Consumer Discretionary (XLY) and Technology (XLK) (see Figure 5).  Commodities and disk drive makers are the strongest industry groups (see Figure Read More 

Trend Check with Tushar Chande

Top Trending Small-Cap Stocks and ETFs

by Tushar Chande

Even as the Small-cap index rises to new highs, mid-, large- and mega-cap indexes are barely clearing their April highs.  So, I have scanned the database and identified the top trending small-cap stocks and ETFs for your review.  In an earlier post, I managed to pinpoint the major turning point within two days of a key low, and the markets have since moved higher without make new lows.  I will update below a key chart from that post so you can judge for yourself.   Chart 1: The S&P 600 Small-Cap index (middle chart, lower row) rose to new all-time highs, but the Read More 

Trend Check with Tushar Chande

Are Bulls Too Pessimistic Even as Data Break Their Way?

by Tushar Chande

All the data reported this week broke in favor of the bulls: strong earnings from Apple, the Federal Reserve remains committed to 2-3 (not four) rate hikes this year, and job creation was steady without rising wage pressures. Overall earnings, guidance and dividend data were also excellent.  Lastly, the Mnuchin Mission to China produced soothing statements suggesting more talks but no immediate crisis.  Other than stormy clouds over the nation's capital, the bulls should be empowered to seize the initiative.   Chart 1: The all-important Apple stock, with its very large Read More 

Trend Check with Tushar Chande

Market's Reluctance to Rally Raises Risks (Plus: 28 Top Financials)

by Tushar Chande

Higher open, lower close: the market's inability to rally convincingly on the back of strong earnings raises down-side risks.  Caterpillar led the way, with a massive sell-off as it failed to please analysts on their conference call.  Other mega-caps followed suit after Caterpillar's manic Tuesday.  The 10-year US Treasury yield has hit a bit of resistance just above 3%.   Since rising rates are good for Financials, a table of the strongest 29 financial stocks is shown below.   Chart 1: Caterpillar set the pattern for many key reports Read More 

Trend Check with Tushar Chande

Market Hits Resistance (Also: Did you Suffer from Portfolio Diversification Malfunction?)

by Tushar Chande

The market rose into resistance and pulled back a bit, even as the short-term trend picture improved significantly.  The reported earnings were strong, but manged to disappoint some traders.  On a different note,  I explore the performance of bonds, gold and commodities in providing diversification during this year's decline (hint: the results may surprise you).   Chart 1: The broad-based NYSE Composite rose into resistance and pulled back a bit.  There are many layers of resistance overhead,  as I have been saying in my past several posts. Read More 

Trend Check with Tushar Chande

Jittery Bulls Loosen Grip of Bears (Plus: Where the Trends Are)

by Tushar Chande

This week jittery bulls pushed through a swirl of headlines to loosen the grip bears have on this market.  There have been no new lows since my last post on the double bottom, and the bulls managed to push through the down-trend line and some overhead resistance on short-term charts (see Chart 1).   Risk-appetite, measured by the HYG ETF, has re-emerged, with the HYG rallying nicely this week.  Lastly, market volatility, so essential to the bear case, continued to drift lower.  However, the $VIX index remains above its recent lows, fed by a flurry of headlines and Read More 

Trend Check with Tushar Chande

785 Reasons to Believe in a Double Bottom

by Tushar Chande

The 785 point reversal in the Dow Jones 30 today suggests that the market has built a durable double-bottom over the past week.  Naturally, more work needs to be done, to breakout above recent resistance and above the down-trend line.  But, with today's rebound overcoming massive headline risk, with resistance holding to the expansion in the $VIX index, with economic data being firm, and earnings promising to be up double-digits all year long, the market can perhaps start focusing on actual data, instead of reacting to headlines.   Chart 1: Today's rebound was an Read More 

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