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June 2010

ChartWatchers

FIXED INCOME ETFS GAIN GROUND

by John Murphy

While some money is starting to creep back into stocks, investors are still showing enthusiasm for bonds. And I'm not talking just about Treasuries. More impressive gains were seen in other bond categories like corporate bonds and TIPS. Chart 1 shows the High Yield Corporate Bond ETF (HYG) closing above its 50-day line for the first time in two months. Chart 2 shows the Investment Grade Corporate Bond ETF (LQD) breaking out of a short-term "symmetrical triangle". It did so on noticeably heavy volume as well. Chart 3 shows the TIPS Bond Fund also turning higher. To me, that suggests that Read More 

ChartWatchers

SOME OF THESE THINGS ARE NOT LIKE THE OTHERS

by Chip Anderson

Hello Fellow ChartWatchers! Now this will probably give away my age, but one of my first memories of television was from the educational children's show called "Sesame Street" and the song that they used to sing called "One of These Things is Not Like The Others".  In case you aren't familiar with this, click here to see the song performed by one of the show's biggest stars. Granted, that game is seems pretty straightforward - even for a monster! - but I find myself thinking about that song every time I use our CandleGlance feature; especially when I use it in conjunction with our Read More 

ChartWatchers

TIME FOR JUICED ETFS?

by Tom Bowley

The market is at a crossroads short-term.  We've been bouncing back and forth after that early May drubbing.   So is the rally ending or is it just starting?  Well, we can only look at the technical, sentiment and historical indicators and come up with a "highest probability" scenario.  Regardless of how you're approaching the market, you need to maintain a sense of skepticism and be prepared to acknowledge that your short-term call is incorrect.  So with so many questions unanswered, why is now the time to consider juiced ETFs?  It's simple.  We're Read More 

ChartWatchers

THE VOLUME ISSUE

by Carl Swenlin

One of the issues that has concerned many analysts is the lack of volume supporting the rally from the June lows, but looking back over the last year we can see that volume has not been at all impressive for either of the rallies beginning in July 2009 or February 2010. This is a great illustration of why we do not use a volume or breadth component in our primary timing models. In my opinion, only price movement is relevant when a decision point appears to be at hand. This does not mean that we don't use volume and breadth indicators as secondary tools to further assess what Read More 

ChartWatchers

A BREADTH THRUST FOR THE MCCLELLAN OSCILLATOR

by Arthur Hill

Before getting into this breadth thrust, let’s review the McClellan Oscillator and McClellan Summation Index. Basically, the McClellan Oscillator is the 19-day EMA of Net Advances less the 39-day EMA of Net Advances (advances less declines). Like MACD, it is a momentum oscillator for Net Advances. The McClellan Summation Index is a cumulative measure of the McClellan Oscillator. The summation index rises when the Oscillator is positive and falls when the Oscillator is negative. Click this image for details The chart above shows the Nasdaq McClellan Read More 

ChartWatchers

A REVIEW OF GLOBAL MARKETS

by Carl Swenlin

A question from a subscriber yesterday prompted me to make a quick review of global markets. I rarely look at global markets because (1) my overriding focus is on the U.S. market and (2) it is my observation that international markets and the U.S. market tend to run in the same direction. There are always exceptions to this rule, but broadly speaking global fundamentals affect nearly all markets and their charts reflect this. As I review the 20 world market charts on the DecisionPoint website, I see that (with one exception) the 20-EMA Read More 

ChartWatchers

RSI remains bearish for SPY

by Arthur Hill

The Relative Strength Index remains below 50 and bearish for the S&P 500 ETF (SPY). Bounded momentum oscillators trade within a defined range. RSI trades between zero and one hundred with fifty as the centerline. Think of this level as the 50 yard line in a football game. The bulls (offense) have the edge when RSI is above 50. The bears (defense) have the edge as long as RSI is below 50. The yellow areas show prior periods with RSI below 50, which correspond with declines. RSI met resistance near 50 during each decline (red arrows). In fact, RSI met resistance near 50 twice during the Read More 

ChartWatchers

Look out Below!

by Tom Bowley

Technically, this hasn't been brain surgery.  Our major indices broke down in early May on very heavy volume and, as technicians, we can never ignore that lethal price/volume combination.  The weakness also came on the heels of some of the most extreme complacency that I've seen.  When markets get complacent, the risks escalate.  It doesn't mean that markets crash and burn.  While the breakdown of equity only put call data wasn't provided in 1999 by the CBOE, we can still look at the total put call ratio and see that the market was extremely complacent in 1999 and Read More 

ChartWatchers

BULLISH PERCENT HANGING ON - BARELY

by Chip Anderson

Hello Fellow ChartWatchers! Back down below 10,000 we go.  This is the fifth time in the past month that the Dow has dipped below that magic number.  The past four times resulted in quick rallies back above 10K - will that happen again on Monday?   Or have the bulls run out of ammunition?  Our experts below debate that very point in this edition of our newsletter.  Be sure to read their articles and then draw your own conclusions. Here's a hint however: The NYSE Bullish Percent is still up above 40 right which indicates that the Bulls are still Read More