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March 2005

ChartWatchers

AIRLINES UNDER PRESSURE

by Chip Anderson

With the surge in oil prices over the last three months, the Amex Airline Index (XAL) remains under pressure. After a sharp decline in January, the index consolidated with a symmetrical triangle. The recent break below the lower trendline is certainly negative and further weakness below the February low (45) would signal a continuation of the January decline. Should the index hold support, look for a move above the early March high to signal that airlines are ready to fly again. In an interesting and telling twist, the chart for XAL looks similar to the Consumer Discretionary SPDR (XLY) Read More 

ChartWatchers

LOOKING FOR A CRB TOP

by Chip Anderson

The title of this article, Looking for a CRB Top , has been my broken record for the last year or so, but it just hasn't happened so far. I use the monthly price chart and PMO ( Price Momentum Oscillator ) to determine when long-term price reversals may be approaching. Last year it looked like a top was forming as the PMO topped twice and prices stalled in the congestion area between about 260 and 285, but this activity proved to be a consolidation that built compression for the most recent rally. This rally has been virtually straight up. It has broken through the top of the Read More 

ChartWatchers

SHORTING THE SOX

by Chip Anderson

Today we expand a bit with 2 charts; with our contention that selling short the Semiconductor Index ($SOX) and several individual names has a high probability of success in the months ahead. Looking at the $SOX, it is trading within a not yet complete' decline that began in 2000, of which the recent correction higher is complete given multiple failure' at the 200-week moving average. This absolute negative when coupled with emerging relative underperformance by the $SOX with the Nasdaq 100 ($NDX) [chart 2] indicates shares are headed lowerand for those wanting to add high beta' to Read More 

ChartWatchers

SITE NEWS:

by Chip Anderson

SHARPCHARTS2 BETA 6 - As Chip said above, we are focused on finishing up the work on SharpCharts2 as soon as possible. Check out his comments above for more details. DECISIONPOINT.COM'S NEW LOOK - OK, OK, so it's not news about StockCharts.com. Still, it is interesting and important news for web chartists. Our partner site, DecisionPoint.com, has a brand new look to it that makes it MUCH easier to navigate and find the right information that you need. DecisionPoint.com has always had the best collection of market indicators on the web. Now it has one of the best looking site out there Read More 

ChartWatchers

DON'T MIND THE BIG VOLUME

by Chip Anderson

Most of the major market averages closed in the red today, but only marginally. After trading down most of the day, the S&P 500 closed with a loss of less than a point. The S&P also held at its late February low at 1184. While the price action was relatively tame, volume was heavy. Don't pay too much attention to that however. Friday was a triple witching day which often produces heavier trading. The S&P also underwent some "rebalancing" in its stock weightings to ensure that only publicly traded shares are counted in a stock's capitalization. That means that some shares will Read More 

ChartWatchers

Hello Fellow ChartWatchers!

by Chip Anderson

Things are jumping here at StockCharts. With the upcoming release of the next version of our main charting tool, I've been way too busy to watch the market closely. Fortunately, our crack team of market commentators has been on the case and you can find their bi-weekly dispatches below. For those of you that have been sending us feedback on SharpCharts2, thanks! We've received over 400 messages from users about the most recent release - most of them very positive. People seem to love the ability to overlay anything on top of any other thing and the ability to have more than one stock on Read More 

ChartWatchers

NASDAQ VERSUS NEW YORK

by Chip Anderson

This chart shows the performance of the Nasdaq relative to the NYSE Composite. The market as a whole usually does better when the Nasdaq leads (green trendlines) and worse when the Nasdaq lags (red trendlines). Even though the NYSE Composite is performing well in the face of Nasdaq weakness, it would be doing a whole lot better with the Nasdaq leading – or at least participating. Nasdaq outperformance peaked in Nov-03 and the price relative has declined steadily for over a year. There was a trendline breakout in November 2004 (blue line), but the price relative failed to move above the Read More 

ChartWatchers

DVY: DIVIDEND-PAYING ETF

by Chip Anderson

Many ETFs (Exchange Traded Funds) pay dividends, but only one is devoted to dividend-paying stocks -- the Dow Jones Select Dividend Index Fund (DVY). As the name implies, this ETF is derived from the Dow Jones Select Dividend Index ($DJDVY), an index constructed and maintained by Dow Jones. The Index is composed of about 100 stocks and is capitalization-weighted, which means the top one-third of the stocks in the index represent 60% of the weighting. A complete list is available on ishares.com. It is subject to change on a daily basis. DVY has only been trading for about 14 Read More 

ChartWatchers

LONG TERM WEDGE PATTERN LOOMING

by Chip Anderson

The recent rally to new yearly highs hasn't materialized in all the major indices. In fact, the Nasdaq Composite has lagged rather badly; thus it is either 'poised to catch up' or it will become the leaders once the cyclical bull market ends. We dont know when that will be; but our fulcrum point for adding to technology short positions will be upon the Composite breaking below its 60-week moving average at 1998only 72 points below current levels. That said, the larger bearish wedge pattern is also looming; a breakdown to 1900 would confirm this longer-term pattern. This isn't todays Read More 

ChartWatchers

SHARPCHARTS 2 ROAD MAP

by Chip Anderson

- We are getting close to the final release of our new charting engine called SharpCharts2. But before we make SharpCharts2 the "official" charting engine on our website, we have to make sure that it is rock solid. To do that, we've been releasing better and better "Beta" versions of it to our users and asking for feedback (which has been great!). At this point, we are looking to release two more Beta versions over the course of the next month: Beta 6 - The goal of Beta 6 is to show everyone what the final User Interface (the buttons and checkboxes and dropdowns) will look like. Up Read More 

ChartWatchers

ELLIOTT WAVE UPDATE

by Chip Anderson

LOOKING FOR 62% RETRACEMENT AT 1250 With the S&P 500 having broken out of its recent trading range, and trading at the highest level in more than three years, it's time to revisit my earlier Elliott wave interpretation and came up with some possible upside price and time targets. Let's start with the monthly bars in Chart 1. As far as the technical indicators are concerned, the monthly MACD lines are still positive. The buy signal given in early 2003 is still intact. The monthly RSI line, however, is in overbought territory. That's of some concern, but doesn't prevent the market Read More 

ChartWatchers

Hello Fellow ChartWatchers!

by Chip Anderson

We are super busy preparing the new release of our SharpCharts2 charting engine (see the "Site News" section below for more details). That means I haven't been paying much attention to the market recently. Fortunately, John, Carl, Richard, and Arthur have been, so let's get right to their commentary Read More