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March 2010

ChartWatchers

SIX THINGS ABOUT STOCKCHARTS.COM THAT YOU NEED TO KNOW

by Chip Anderson

Hello Fellow ChartWatchers! The markets continue to rise impressively with the Dow closing higher for 13 of the last 16 days.  Arthur, John and the rest of the ChartWatchers team discuss that in more detail in just a bit.  I wanted to take some time to talk about six very important things that most people don't know about our website. 1.) You Can Get Notified As Soon As New Articles Are Posted - Everytime a new article is posted on StockCharts (even this one!), we send out several notifications about via both Twitter and our RSS Feeds.  (Most articles also appear in the Read More 

ChartWatchers

DOW THEORY UPTREND IS CONFIRMED

by John Murphy

Dow Theory holds that the Dow Transports and Industrials must both hit new highs to confirm an ongoing bull market. The ability of the Dow Industrials to exceed their January high has done just that. That doesn't tell us how far the bull market will run, or for how long. It just confirms that a bull market still exists. The Dow has been a laggard for several months and is one of the last indexes to hit a new high. [The NYSE Composite also hit a new high last week]. A lot of this week's Dow strength can be attributed to upside breakouts in some key components. DOW Read More 

ChartWatchers

IS THE S&P ON SOUND-FOOTING, OR NOT?

by Richard Rhodes

The recent S&P rally to new reactionary highs has shown to be on rather slim-footing given that volume patterns are rather tepid. We don't disagree in the least, but the fact of the matter is that the advance/decline figures have been rather "good" of late and showing impressive strength in the face of this volume contraction. We've always been led to believe that volume equals conviction, but the current rally has only convinced in terms of points and percentagesnot in volume. So we must question whether the S&P is on sound-footing or not? Our initial reaction Read More 

ChartWatchers

THE POWER OF THE REVERSING CANDLE

by Tom Bowley

Candlesticks and candlestick patterns are the foundation to trading in my view.  I use them on every charting timeframe, whether it's a one minute, hourly, daily, weekly or monthly chart.  If you're a daytrader or swing trader, trading without the knowledge of reversing candlesticks is doing yourself a great disservice.  While not every uptrend or downtrend ends with a reversing candlestick, most reversing candlesticks do end a trend if a prior trend is in place.  The reversal may just be a temporary end to the trend, so you have to view these candlesticks in tandem Read More 

ChartWatchers

A TIP ON TIPS

by Carl Swenlin

TIPS are bonds that provide inflation protection. While Erin covered this subject in yesterday's blog, I wanted to cover it with a little more depth and from a somewhat different perspective. Our default "first look" charts are usually set for one year, but I personally like to step back to a three-year chart to help put recent price action in a longer-term context. I think the most prominent feature on the chart is the crash in October 2008. Before that you can see the strong advance, coinciding with people's belief that prices on everything would rise forever. Prices leveled in 2008 as Read More 

ChartWatchers

North American Currencies show strength in 2010

by Arthur Hill

The Perfchart below shows the performance trends for 10 currency ETFs in 2010. The North American and commodity currencies are strong, while the European currencies are weak. First, notice that the DB Dollar Bullish ETF (UUP), Mexican Peso ETF (FXM) and the Canadian Dollar ETF (FXC) are up. Strength in all three North American currencies bodes well for a recovery throughout the continent. In particular, Mexico and Canada benefit from a recovery in their big neighbor. The Peso is the strongest of the 10 currency ETFs this year (ole!). The Canadian Dollar and Australian Dollar ETF (FXA) Read More 

ChartWatchers

DETAILED INDUSTRIES AND SECTORS NOW ON STOCKCHARTS

by Chip Anderson

Hello Fellow ChartWatchers! We've been working hard the past couple of weeks to get better Sector and Industry classifications for the stocks in our database and today that work is finally starting to surface on the web site. One of the big problems with Sector and Industry classifications is that there is no universally accepted standard for what constitutes a sector, what constitutes an industry and which stocks belong in which category.  The other big problem was that, until recently, the only source for that information was high-priced research firms that usually frowned on our Read More 

ChartWatchers

ON HIATUS THIS WEEK

by Richard Rhodes

Richard will return for our next issue. Read More 

ChartWatchers

SECTOR ROTATION CONTINUES

by Tom Bowley

Happy Anniversary!  It was one year ago, on March 6, 2009, that the S&P 500 made that unforgettable 666 low, completing an amazing drop from above 1300 in August 2008.  That represented nearly a 50% decline in the market capitalization of 500 of the largest U.S. companies in a little more than 6 months.  We were already down more than 15% in the year before that remarkable decline.  A lot has changed over the past year, specifically the levels at which our major indices are now trading.  The old cliche that "time heals all wounds" most definitely can be Read More 

ChartWatchers

WHY I'VE AVOIDED INVERSE ETFS

by John Murphy

A number of readers have asked why I haven't said much about inverse (or bear) ETFs. The main reason is that I wasn't convinced that the recent market dip was serious enough to warrant bearish positions. So far, that view has been justified. Chart 1 shows the ProShares Ultra Short QQQs (QID) nearing a test of its January low. It's also back below its 50-day average (blue line). Inverse funds are not meant as long-term holdings. Their use is only justified when the market is in a serious downward correction or a bear trend. Some short-term profits could have been made in the QID from Read More 

ChartWatchers

THRUST/TREND BUY SIGNAL FOR S&P 500

by Carl Swenlin

Looking at the S&P 500, a new Thrust/Trend buy signal was generated on Monday, changing from a neutral stance. Specifically, the signal was generated by the PMO (Price Momentum Oscillator) and PBI (Percent Buy Index) crossing up through their EMAs. The Thrust Component signal was confirmed later this week when the upside 20/50-EMA crossover occurred. The Dow generated a buy the previous trading day, and we are now left with only the Nasdaq 100 still on neutral, needing a PBI crossover to occur. As you can see, this will most certainly happen by today's market close. Note that the Read More 

ChartWatchers

Net New Highs Expand to January Levels

by Arthur Hill

Net New Highs survived their third corrective period and surged over the last few weeks. The chart below shows Nasdaq Net New Highs surging back above +200 this week. Prior surges in October and early January hit the +200 area. Notice that there have been three corrections over the last eight months. Net New Highs dipped into negative territory in early July, late October and early February. These red areas are small as Net New Highs moved back into positive territory soon thereafter. In fact, notice that Net New Highs found support at or above -50 each time. This means we should expect a Read More