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April 2010

ChartWatchers

SOME SLIDES FROM MY "WORLD TOUR"

by Chip Anderson

For the past couple of months, I've been visiting with investments clubs around the country who have been gracious enough to invite me to talk.  So far I've talked with clubs in Portland, Pheonix and Dallas.  Calgary, Denver, and Houston are coming up with east coast cities to follow in the fall. I wanted to show you a couple of the slides I used in my Dallas presentation yesterday and give you a pointer to our handout so that you were aware of some of the things in my talk even if you haven't attended one.  (At some point, I'll try and post the complete version of the Read More 

ChartWatchers

FINANCIALS FALL HEAVILY

by John Murphy

Financial stocks are considered to be leading indicators for the rest of the market. Over the last year, the group has led the market higher. Yesterday, they led it lower. The chart below shows the Financial SPDR (XLF) falling 3.6% on huge volume. The big volume is more serious than the price drop. With the group (and the market) having rallied two months without a pullback, one certaintly seems overdue. And it may have started yesterday. If this just a short-term pullback, the XLF should find support along its January high. The green lines show that would also be a 38% retracement of the Read More 

ChartWatchers

FINANCIALS TOPPING?

by Tom Bowley

In my first article of 2010, I indicated that financials would need to lead on a relative basis in order for us to see strength in overall equity prices this year.  Until late last week, financials have performed very well on a relative basis.  Take a look visually at what I was referring to: It's quite evident that the market is going only as far as the financial sector can take it.  That leads to one very important question.  Will the technical problems that surfaced this past week be resolved quickly in the upcoming week, or is the market finally ready to pause and Read More 

ChartWatchers

CONSUMER DISCRETIONARY STOCKS PRIMED TO LEAD

by Richard Rhodes

Since the beginning of the year, the market "Generals" if you will have been the S&P Consumer Discretionary, S&P Financial and S&P Industrial sectors given they are the only sectors to have out-performed the S&P 500. However, there is only one sector that has out-performed in both 2009 and 2010 - the S&P Consumer Discretionary sector. This is obviously counter-intuitive given the enormous de-leveraging occurring in the US economy and in particular with the US consumer - although recent retail reports simply haven't proven this to be much of an issue. Be that as it may Read More 

ChartWatchers

BREAKOUT FAILS

by Carl Swenlin

STOCKS: Based upon a 3/1/2010 Thrust/Trend Model buy signal, our current intermediate-term market posture for the S&P 500 is bullish. The long-term component of the Trend Model is on a buy signal as of 8/11/2009. On Wednesday the S&P 500 broke up and out of the short-term ascending wedge pattern on expanding volume. On Thursday there was a small follow through advance on expanding volume, but short-term internals showed weakness, and it looked to me as if a pullback toward the point of breakout was likely. Instead, the breakout was a fakeout, and prices fell through support all Read More 

ChartWatchers

THE ROAD AHEAD - OUR TRANSITION TOWARDS "THE INSPECTOR"

by Chip Anderson

Hello Fellow ChartWatchers! Is the two-month old rally coming to a end now that April has arrived?  The Dow's PPO is tantalizingly close to a bearish crossover right now.  Arthur Hill sees weakness in the S&P 500 while Tom Bowley still sees opportunities.  Read their thoughts below for more details. The Road Ahead At StockCharts, we are constantly improving the website.  Recently, we've begun transitioning from using Sun's Java to power our interactive tools to using Adobe's Flash.  There are several reasons for this change: Read More 

ChartWatchers

JUMP IN CHINESE SHARES BOOSTS COMMODITIES

by John Murphy

Stocks and commodity markets rallied on Thursday on news of an expansion in manufacturing in China, which is the world's biggest user of commodities. A few weeks back I wrote that weakness in Chinese shares was one of the factors weighing on commodity markets (along with a stronger dollar). With the dollar looking overbought and vulnerable to profit-taking, attention is now turning to China. And the news there is good. Chart 1 shows the China iShares (FXI) surging 2.5% on Thursday to the highest level in three months. The FXI has also broken a five-month resistance line. That's giving a Read More 

ChartWatchers

LOOKING INTO OIL SERVICES

by Richard Rhodes

The market rally higher has taken quite a few stock groups along for the ride - most notably the Consumer Discretionary and Industrial sectors. However, we've begun to see some very small rotations out of this group, and into the Energy group. This interests us greatly, for Crude Oil prices are now hard upon the $85/barrel level and showing signs of moving still higher. This will benefit the Energy group disproportionately given the broader Energy sector has under-performed the S&P 500 by roughly -4.0% this year. This is on top of further under-performance last year of over -4.0% Read More 

ChartWatchers

INDUSTRIALS LEADING THE CHARGE

by Tom Bowley

If you're looking for sector leadership in 2010, look no further than the industrials.  While other sectors have performed admirably, especially financials and consumer discretionary, none top the 13.13% year-to-date gain that industrials are sporting.  Compare that return to the paltry 0.57% gain in technology.  Because we've been witnessing a lot of sector rotation, we'd expect to see technology have its day soon, but for now the group can't seem to catch a relative bid.  Keep in mind that as recently as one week ago, energy found itself in that exact position.  Read More 

ChartWatchers

SPY stalls at channel trendline

by Arthur Hill

The S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQQ) are trading near the upper trendline of a rising price channel that extends back to August. I drew the lower trendlines first, created a second parallel trendline and then moved it up to match the reaction highs. After a sharp advance the last 6-7 weeks, both SPY and QQQQ became overbought and hit channel resistance. The first chart shows SPY stalling near the upper trendline the last two weeks. The second chart shows QQQQ hitting the upper trendline last week. The odds of a pullback or consolidation certainly seem high with these key Read More 

ChartWatchers

MORE NORMAL EARNINGS PICTURE

by Carl Swenlin

S&P has still not finalized 2009 Q4 earnings, but 99% of companies have reported, and I want to get the most current earnings picture out there, so I have updated our database to TMT earnings as of Q4 2009. This causes the horrible Q4 2008 numbers to drop out of the equation and gives us a more realistic look at valuations. The chart below shows the S&P 500 in relation to its normal P/E range (10 to 20). The colored arrows on the right help to clarify where the cardinal points of the range are now located. While the picture has improved considerably from a year ago, the S&P Read More