Trend Check with Tushar Chande

Risk of Reversal Rises with Parabolic Move

by Tushar Chande

The powerful January rally has turned "parabolic" across all key indexes, increasing the risk of a market reversal.  The sheer flow of investment dollars into stocks has driven the acceleration in prices, but this flow is also nearing an extreme (see BAML), increasing the risk of a reversal.  Eventually this rocket will run out of fuel and the so-called parabolic rise will lead to a correction.   Chart 1: The strong move in January has the look of an accelerating parabolic advance.  Note how the stochRSI in the lower panel has not dropped below 0.20 since early Read More 

Trend Check with Tushar Chande

5 Lessons from Trend Analysis of Vanguard ETFs (And How to Profit From Them)

by Tushar Chande

Vanguard allows us to take a keen look at a very well diversified portfolio of ETFs.  Analyzing their trend strength offers insight in to market action, and offers guidance into constructing profitable portfolios for our own purposes. Chart 1: This trend strength distribution analysis of the universe of Vanguard ETFs shows that fully 60% (mostly equity related ETFs) are trending higher strongly.  Bond and bond-related ETFs are at the right hand edge, trending lower strongly.   1. Market Trend Strength is broad and deep Read More 

Trend Check with Tushar Chande

Strongest Semiconductor Stocks (Plus: Will this Market Ever Pullback?)

by Tushar Chande

Topics: Semiconductor stocks breakout; ESIO bottoms; KSS and TCF breakout; is the Dow within hailing distance of a pullback?  The semiconductors which were hit hard in November during the rotation into Financials have rallied to new highs. I will show the strongest stocks propelling this rally.   Chart 1: The $SOX index broke out to new highs, after enduring a significant sell-off during the rotation in to Financials in November.  It's bounce has largely followed my analysis (see here and here).   $SOX Makes New Read More 

Trend Check with Tushar Chande

Strong Stocks Leading to Bear Market in Bonds and Men?

by Tushar Chande

Bill Gross announced irreverently that there is now a bear market in bonds and men.  Elsewhere, Ralph Acampora opined that this market is stronger than the 1990s stock market.  Both may be right at least on the markets: the charts certainly support their contention. Elsewhere, airlines are taking flight, and oil services are pumping profits.   Stock Market Is Very Strong I had remarked last week that the broad market is very strong (see Chart 4 of that post).  This week we Read More 

Trend Check with Tushar Chande

Which are the Strongest (and Weakest) Dow 30 Stocks?

by Tushar Chande

With the Dow closing above 25,000 for the first time ever, I take look at the components of the index and show which ones are strongest (and the ones driving the index higher).  I also look at NVDA and the $SOX index to show that the sell-off that caused the rotation out of tech and into financials has been mostly reversed within the past few days.  The broad market continues to be very strong, and I use the NY Composite chart to illustrate this point.  Lastly, I look at the key index and sector ETFs and show how they compare to the SPY ETF. Chart 1: The mythical "average" Read More