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December 2009

ChartWatchers

ANOTHER RALLY IN $HGX FUTURE?

by Richard Rhodes

We'll be the first to admit that we are bearish on the housing market; and we are bullish on 10-year not yields that will ultimately have a negative impact upon mortgage rates and hence home sales. However, our fundamental backdrop really doesn't square well with our technical viewpoint on the Housing Index ($HGX). The question therefore is whether the liquidity driven rally of the past 9-months will reappear in $HGX. The probabilities favor it doing so just ever so slightly in our opinion. The weekly $HGX chart now shows a series of rising highs and lows of the March-09 Read More 

ChartWatchers

Natural Gas Rising, Gold Falling

by Tom Bowley

In my last article I wrote about the recent disconnect between crude oil and oil services stocks.  On a relative basis, oil services stocks had severely underperformed the S&P 500 from mid-October to early December despite crude oil prices trading flat to slightly lower.  Since that article, oil prices have begun to climb a bit, but oil services stocks have significantly outperformed the S&P 500, bringing the relationship between the $OSX and crude oil more in line.  Other commodities are interesting at this time as well. After a sharp run up in gold and VERY Read More 

ChartWatchers

2009 - THE STOCKCHARTS YEAR IN REVIEW

by Chip Anderson

Happy Holidays Fellow ChartWatchers! Here we are, once again, at the final ChartWatchers of the year - of the decade(!) in this case.  An awful lot has happened at StockCharts.com this year and I wanted to take a moment and review with you all of the changes and improvements that we've made this year and then tease you a little by hinting at what's to come. The year kicked off with the publication of a pair of articles about using ChartStyles and StyleButtons to quickly switch between different set of indicators and chart settings. Next up was the first article in our Read More 

ChartWatchers

UPTREND IS STILL INTACT

by John Murphy

A Friday stock bounce kept major stock indexes stuck in a two-month trading range. Prices also remain above their 50-day averages which keeps the intermediate uptrend intact. Prices, however, remain below long-term resistance barriers near 10,500 in the Dow, 1120 in the S&P 500, and 2200 in the Nasdaq Composite. Although not shown here, today's unusually heavy trading is due to quarterly futures and options expiration as well as some index rebalancing. It has little forecasting value. A modest pullback in the U.S. Dollar also provided some short-term relief to stocks and commodities Read More 

ChartWatchers

ANALYSIS OF THREE TIME FRAMES

by Carl Swenlin

Since this will be our last article for 2009, I thought it would be appropriate to do an analysis of the short-, medium-, and long-term charts and synthesize a broad outlook for the market. In my December 4 article I said we should expect an upside breakout, but the market has continued to consolidate in a very narrow range, still testing the long-term overhead resistance which is drawn across the declining tops beginning with the 2007 top. In the short term, we are looking at several weeks of consolidation, which is also known as a continuation pattern. This means that the most likely Read More 

ChartWatchers

The January effect starts early

by Arthur Hill

According to the Stock Trader’s Almanac, the January effect is the historical tendency of small-caps to outperform large-caps from mid December until April. Notice that this period coincides with the bullish six month cycle that extends from November to April. Historically, the strongest period of small-cap outperformance runs from mid December until end January. Judging from small-cap performance in the first half of December 2009, it appears that the January effect is starting early this year. The Perfchart below shows two small-cap indices, the Russell 2000 ($RUT) and Russell Microcap Read More 

ChartWatchers

ETF SCANS, STUFFED MAILBAGS, AND SNOWFLAKES - OH MY!

by Chip Anderson

WINTER HAS ARRIVED AT STOCKCHARTS - Snowflakes are now at the top of most of our pages. SCANNING FOR JUST ETFs - Members can now choose to run their scans against ETFs only.  Members can use the "Groups" dropdown on the Standard Scan Workbench (or the "Indices and ETFs" dropdown on the Advanced Workbench) to restrict their scan to just ETFs.  Can I get a "Hallelujah"? OUR MAILBAG IS STUFFED - Arthur Hill has been answering questions left and right in our Mailbag blog.  Be sure to check it out and learn more about why the Nasdaq breadth charts have a built-in Read More 

ChartWatchers

HOT STOCK(CHARTS) TIPS

by Chip Anderson

Hello Fellow ChartWatchers! This week, I'm taking time off from our on-going "Technical Analysis 101" series, to enlist your help.  We are in the process of compiling a list of "Tips" for using StockCharts.com and we need you to review the tips that we've come up with so far.  When this list is complete, we'll make it available to everyone on the website. Here's our current collection.  How many of these did you not know about? Members do not see advertising on their charting pages. You can give a friend a gift subscription to our site. You should Read More 

ChartWatchers

BOND YIELDS AND DOLLAR BOUNCE

by John Murphy

Sometimes good news produces a bad effect. That's especially true when dealing with financial markets. Today's unemployment report dropped to 10% and payrolls fell by an unusually small amount. That good news was given a positive reception by most markets. By day's end, however, commodities and stocks were on the defensive. The good news caused a big jump in the 10-Year T-note Yield (Chart 1) as bond prices fell sharply. The jump in bond yields (and a more positive view on the U.S. economy) pushed the dollar higher. Chart 2 shows the Power Shares Dollar Bullish ETF (UUP) surging 1.5% on Read More 

ChartWatchers

Finance sector still lagging

by Arthur Hill

The finance sector continues to underperform the overall market. While the S&P 500 and Dow are consolidating near 52-week highs, the Financials SPDR (XLF) remains well below its October high and shows relative weakness. The bottom indicator contains the price relative, which is the XLF:$SPX ratio. XLF is outperforming when the ratio rises and underperforming when the ratio falls. Notice that the ratio peaked in October and declined to its lowest levels since late July. XLF is clearly underperforming the S&P 500. Click this chart for details. On the price Read More 

ChartWatchers

EXPECTING UPSIDE BREAKOUT

by Carl Swenlin

On Thanksgiving Day Dubai announced that it would be delaying loan payments by six months. This resulted in a global selloff, in which the U.S. markets participated on the following day. There was virtually no follow through selling this week. Looking at the S&P 500 chart below, you can see that the Dubai selloff is practically invisible within the context of the trading range of the last several weeks. In fact, the market is consolidating during a time when I had expected it to be declining into the 20-Week Cycle low. Because of this I have had to reconsider my cycle assessment: It Read More 

ChartWatchers

Oil Services Ready to Run?

by Tom Bowley

When I see a relationship in the market that tends to hold true over time, it always peaks my interest when the market varies from that "norm".  That seems to be the case right now with oil services stocks.  Generally speaking, when oil prices rise, money flows to oil services stocks relative to the S&P 500.  Likewise, when oil prices are on the decline, I expect to see oil services stocks struggle.  Take a look at the following chart to see the relationship that exists between the direction of oil prices and the relative performance of oil services Read More