Trend Check with Tushar Chande

April Trend Check -- Sector Vectors -- Trend-Weighted Sector Portfolio -- SPX Cup Needs Handle

by Tushar Chande

Trend Checking The Market The major indexes all rallied sharply towards month end, and with that our trend-check carpet has turned  positive over the short term.  The short-term trend check carpet tells us that the broad market is now trending higher on the short term, in sync with the long-term, which increase the odds that the rally can continue. Chart 1: All of the major indexes are now trending higher over the short-term.  Market breadth increases from left to right, from 30 to over 2000 stocks.   For example Read More 

Trend Check with Tushar Chande

Market Pops, Vol Drops -Russell 2000 Outperforms -Financials Rally -9 Top Stocks In Dow 30 Industrials -12 Top Europe ETFs

by Tushar Chande

The market's rallied sharply on French election results, and confirmed the change in sentiment we had detected last Monday.  The Direxion Daily S&P 500 Bear (3x) ETF (SPXS), which reflects bearish bets on the market, crashed through the neckline of a head-and-shoulders formation we showed in that post.  This simply meant a big rally in the SPX, which was accompanied by new highs in the QQQ. More importantly, the Russell 2000 index outperformed both the senior indexes, helped by the very same Financials we identified last Monday as having displayed a positive divergence Read More 

Trend Check with Tushar Chande

Vive la Volatilite (Or, Let Them Eat Risk-Off Cookies!)

by Tushar Chande

The market chose to fret about French elections this week, because a string of recent elections have led to unexpected outcomes, even though US exposure to the French economy is quite small.  Earnings season helped risk-on sectors gain this week, and risk-off groups waned.  However, trader anxiety, doused early in the week, flared up again after the terrorist incident on Champs Elysees.  As a famous French historical figure might have tweeted today, "Let them eat risk-off cookies!" (Yes that rhymes with Biscoff cookies. More on that later.)   Chart Read More 

Trend Check with Tushar Chande

Fear Index Drops To Lower Gear

by Tushar Chande

The $VIX index closed below its prior two lows today.  It's 7-day RSI has dropped below 70.  In the past this has generally turned into an important reversal in the VIX index.  Today, key market indexes and sub-sectors, such as the NYSE composite and XLF held support and bonds (and gold) reversed.  A typical unwinding of the defensive selling ahead of the long weekend, a possibility I had suggested at the end of my previous post.  I look at a few charts to understand if the reversal could continue. $VIX Closes Below Two Previous Lows Read More 

Trend Check with Tushar Chande

A Brief History of Post-Election Rallies (Or, could the "Trump Rally" go even higher?)

by Tushar Chande

As dark clouds gather over the investment horizon this Easter weekend, the post-election rally in the US stock market (the "Trump Rally") seems to have faded just a bit.  Is the rally over? Or, can the recent history of US stock returns during the first year of a new presidential four-year term give us some useful guidance?  We explore this question, in the hope we will find an Easter egg after all, if not now, perhaps later this year. However, the really tough question this weekend is this: Should the Easter chocolate bunny be consumed feet first, or ears first? (More on that Read More 

Trend Check with Tushar Chande

Dow 30: Less Vol Now, More Vol Later? -- Trend Checking Bonds and Dollar -- Market's Path of Least Resistance

by Tushar Chande

We explore the implications of the very narrow trading range in the Dow.  Then we trend check bonds and gold.  The NLY chart caught our eye. I also annotate the market's path of least resistance.   Dow 30 Industrials: Less Vol Now, More Vol Later? The Dow 30 is showing a 5-o'clock shadow.  They have traded in such a narrow range, that the shadows of the candlesticks are growing like whiskers (see Chart 1).  Since the end of January, about 70% of the closing percentage changes have been within +/- 0.25% of the previous close.  The narrow range makes the Read More 

Trend Check with Tushar Chande

Bonds Reach Resistance -- Market Environment Weakens Ahead of Jobs Report -- Top Trending Vanguard ETFs -- Top Trending S&P 500 Stocks

by Tushar Chande

Bonds reach critical overhead resistance ahead of jobs report Market environment weakens over short- and medium-term Top-trending Vanguard ETFs rankings are consistent with strength in bonds Top-trending S&P 500 stocks are led by McDonald's (MCD)   Bonds Reach Critical Overhead Resistance Bonds have rallied into critical overhead resistance ahead of the jobs report (see Chart 1).  Oddly, the overall economy has been firm, with the third revision of 2016Q4 GDP now at 2.1 percent, and the Atlanta Fed GDPNow at 1.2 percent for the first quarter of 2017.  The Read More 

Trend Check with Tushar Chande

Engage More Closely with the Market (via the Trend Check Carpet)

by Tushar Chande

NELSON'S LAST SIGNAL TO THE FLEET AT TRAFALGAR "ENGAGE THE ENEMY MORE CLOSELY" The great naval battles of the 16th-18th century were fought with a large number of huge sailing ships all moving in a straight line, firing batteries of cannon broadside at each other at short range.  Hence, the biggest warships were called line-of-battle-ships. The commanding Admiral could only use flags to signal maneuvers to his fleet, through all the din and smoke, and hence information compression took on a whole new role (see more about Trafalgar later).  Naturally, the ship that bore the Read More 

Trend Check with Tushar Chande

The Shortest Distance Between Two Points is a Crooked Line

by Tushar Chande

"The shortest distance between two points is a crooked line." Sure, that may be out of line with Archimedes, but it is perfectly in line with how markets work.  If nothing else, that's what two decades of trading the futures markets taught me. The title just means that we typically underestimate the randomness of the markets and overestimate our ability to predict them. I am Tushar Chande and welcome to my first blog post on StockCharts.com.  I know many of you will question the wisdom of launching a new blog on April Fool's Day (trivia buffs: more on this at the bottom of the Read More