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August 2010

ChartWatchers

SMALL CAPS AND NASDAQ SHOW RELATIVE WEAKNESS

by John Murphy

It's usually a bad omen for the market when small caps and technology stocks are underperforming -- as they're doing at present. Chart 1 shows the Russell 2000 Small Cap Index trading closer to its July low than its July high. Its falling relative strength line also shows small-cap weakness. The same is true for the technology-dominated Nasdaq market. Chart 2 shows the Nasdaq Composite meeting resistance at its (blue) 50-day average (having never closed the overhead resistance gap formed last week). It's also dangerously close to breaking support near 2150. Its falling relative strength Read More 

ChartWatchers

S&P 500 FAIL AT CRITICAL RESISTANCE

by Tom Bowley

With a myriad of "under the surface" problems, the S&P 500 simply ran out of gas at a very inopportune time.  The bulls were on the threshold of a major breakout on the S&P 500 above its June highs near 1131.  For seven consecutive days, the S&P 500 flirted with that 1131 resistance, each time setting an intraday high somewhere between 1120 and 1130.  Unfortunately for the bulls, each time resulted in a failure.  It's not at all surprising to me.  As much as I'd love to see the market breakout in a big way to the upside, there were simply too many Read More 

ChartWatchers

US DOLLAR RALLIES

by Carl Swenlin

Looking at a weekly chart of the U.S. Dollar Index we can see that it entered a steep correction off the June top when it encountered long-term resistance from a declining tops line reaching back to 2006. During the correction a rising trend line drawn from the December 2009 low was violated, and it seemed likely that the index would decline all the way back to the long-term rising trend line drawn across the 2008 and 2009 lows. That may still happen, but currently a snapback rally has begun. When a line of support is violated, shortly after the Read More 

ChartWatchers

P&F BATTLE LINES DRAWN FOR QQQQ

by Arthur Hill

The Point & Figure chart for QQQQ shows clear support and resistance lines for 2010. The ETF advanced for 9-10 months with a long column of X’s in 2009 and then embarked on a consolidation in 2010. Notice that the X’s started in March 2009 and continued until December. The numbers 4 through 9 represent April to September. The letters A,B and C represent October, November and December. After the ABC, we start with January 2010 by marking a red 1 on the chart. The current P&F signal is bearish. A triangle formed from January to June and the ETF broke triangle support in Read More 

ChartWatchers

BEST... STOCKCHARTS.COM... SPECIAL... EVER!!

by Chip Anderson

Hello Fellow ChartWatchers! It's that time of year again: Now through the end of August, StockCharts.com is running it's "End-of-Summer-Almost-Fall" special and this is a very special special indeed.  Here's the deal: Subscribe to any of our services for six months and we will give  you one addtional month  for free! Subscribe to any of our services for one year and we will give you  THREE(!) additional months   for free! Read More 

ChartWatchers

Making Cents in a Wacky Market

by Tom Bowley

Yep, you read the headline correctly.  I want to personally congratulate you if you're able to successfully trade this market.  Because it ain't easy.  Friday was yet another example.  Not only did the report fall well short of expectations on the July jobs, the revision to June was another 100,000 of jobs lost.  In a market that seemed ripe for a pullback, at a minimum, and possibly something much worse, the bulls didn't flinch.  Sure, there was early selling on Friday, but by day's end the sellers were gone and the bulls once again established control of Read More 

ChartWatchers

GRAB BAG: TWITTER, PUBLIC CHARTLISTS, IMPROVING PERFORMANCE

by Chip Anderson

Hello Fellow ChartWatchers! The market is trying to rise but bearish news keeps beating it down.  One of my favorite market indicators - the McClellan Summation Index - rose decisively above the 400 level at the end of July indicating that it was time to start looking for entry points again.  This week however a number of economic reports have kept the stock market in check.  While opinions are mixed on what next week will bring, I'm still encouraged by the fact that the Summation Index has continued its upward movement.  (Click here for a live version of Read More 

ChartWatchers

STOCK INDEXES IN P&F UPTRENDS

by John Murphy

One of the things I like best about poing & figure charts is their simplicity. Their strongest feature is that buy and sell signals are easier to spot than on bar or candlestick charts. A p&f chart shows alternating columns of X's and O's. The X columns represent rising prices and the O columns falling prices. A buy signal takes place when the latest X column exceeds a previous X column. A sell signal occurs when the last O column falls below a previous O column. Trendlines are drawn at 45 degree angles from previous tops and bottoms. A buy signal is stronger if prices are trading Read More 

ChartWatchers

S&P 500 bullish....for the time being

by Richard Rhodes

The rally off the July low is ongoing, and appears resilient in the face of very negative sentiment. While we want to be bearish based on a plethora of macro fundamentals, the technical viewpoint remains rather bullish for the time being. However, as we all understand - it could change quickly. But having said this, there are defensive points that are clear and unequivocal in our mind that if violated - then the "risk-off" trade or bear market is back in vogue. To review, the S&P 500 bottomed in July with perhaps the best internal breadth figures we've seen in quite sometime. And, no Read More 

ChartWatchers

McClellan Oscillator Is Positive

by Carl Swenlin

The McClellan Oscillator chart could be voted one of the most likely charts to cause the glazing over of multitudes of eyeballs; however, with a little effort you can understand it and appreciate the wealth of information it conveys. Take a moment and read and let the following paragraph sink in. The McClellan Oscillator (displayed just below the S&P 500 chart) is the difference between the 5% and 10% Indexes, which are a 19-EMA and 39-EMA of daily advances minus declines. (They are in the bottom panel of the chart below.) The Oscillator reflects the short-term Read More 

ChartWatchers

Risk-on versus Risk-off with intermarket PerfCharts

by Arthur Hill

The intermarket picture shows a preference for the risk-on trade over the last five weeks. The next two PerfCharts show five intermarket ETFs over two distinct timeframes. The first extends from late April until late June, which is when stocks declined sharply. The second extends from early July to early August, which is when stocks advanced sharply. A sharp decline in stocks reflects risk aversion or the risk-off trade. Weakness in stocks extended to oil, which has been positively correlated to the stock market all year. The risk-off trade also involves a flight to safety. Notice that Read More