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March 2012

ChartWatchers

OFF TO THE RACES WITH PUBLIC CHARTLISTS v2.0

by Chip Anderson

Hello Fellow ChartWatchers! The new version of our Public ChartList area is now officially released and ready for your use.  The Public ChartList area has been a real "hidden gem" of our website for years where any StockCharts member (with an Extra account) can publish their own chart analysis for everyone to enjoy.  This new version adds a nice collection of new features for both Public ChartList readers and Public ChartList authors. FOR THE READERS: A New, More Reliable Ranking System - The old vote-based system has been completely replaced with a new Read More 

ChartWatchers

OVER 800 S.C.A.N. ARTICLES AND COUNTING, "SAME SCALE" PRICE OVERLAY

by Chip Anderson

OVER 800 ARTICLES AND COUNTING!  The StockCharts Answer Network (s.c.a.n.) passed another milestone last week with its 800th question getting answered.  If you haven't visited it yet, s.c.a.n. is a free user-to-user question-and-answer area where you can get your questions about using StockCharts.com answered quickly by other experienced StockCharts.com users.  But don't just visit s.c.a.n. when you have a problem, keeping up with the answers to questions that other people ask can be even more rewarding.  Each week another couple of gems pops out of the discussions Read More 

ChartWatchers

GOLD BREAKS 200-DAY LINE - GOLD MINERS TEST SUPPORT

by John Murphy

A couple of weeks ago (February 28) I wrote a positive article on precious metal assets. The entire group has taken a big hit since then. Two contributing factors have been more positive comments from the Fed, which imply little or no more quantitative easing. That pushed U.S. bond yields sharply higher earlier this week and gave a big boost to the U.S. dollar. Stocks also rallied sharply. That combination pushed gold prices sharply lower, and gold miners along with it. Chart 1 shows the Gold SPDR (GLD) tumbling to a two month low on rising volume. It has also fallen below its 200-day Read More 

ChartWatchers

S&P 500 RALLY GETTING RISKIER BY THE WEEK

by Richard Rhodes

The S&P 500 rally continues unabated, although it has shown some signs of wear and tear given the less-than-hoped for volume patterns as well as advance/decline patterns. However, it is clear that this type of market condition does not preclude prices from moving higher and forming major negative divergences over time. Presently, we should note that the 160-week moving average has bottomed, which suggests the rally has further upside left in it, with any and all corrections - at this point - seemingly nothing more than garden variety corrections. However, note that prices Read More 

ChartWatchers

COMMON MACD MISCONCEPTIONS

by Tom Bowley

In my last article, I featured a weekly NASDAQ chart and pointed out that the MACD was coming up off the centerline and pointing higher.  I indicated this was a very bullish signal for the intermediate- to longer-term and supported my belief that equity prices would continue to rise in 2012 - at least until technical indicators begin to change.  I received several responses to that particular chart, with readers correctly pointing out that there was a long-term negative divergence present on the chart.I won't argue with the fact there was a negative divergence - by Read More 

ChartWatchers

APPLE ENTERS DANGER PHASE

by Carl Swenlin

Apple is a great company, and AAPL has been a great stock since early-2009. From that point to the end of 2011 it rose +300% in an orderly, relentless advance. The angle of the rising trend line was conservative and sustainable. Unfortunately, since the beginning of this year AAPL has begun a vertical ascent, which is not strictly a paraboic, but the result of which will almost certainly be the same -- a price collapse. Vertical price moves signal that a bubble mentality has taken over the market (the market in AAPL, not necessarily the entire stock market), and bubbles almost always Read More 

ChartWatchers

Materials SPDR Continues to Show Relative Weakness

by Arthur Hill

While the S&P 500 and Dow moved to new highs last week, the Materials SPDR (XLB) fell short of its February highs and continues to underperform. Also note that the Technology SPDR (XLK) and Consumer Discretional SPDR moved to new 52-week highs last week. Along with the Finance SPDR (XLF), these three are the clear market leaders right now. The chart below shows XLB breaking below its mid February low and then surging back above the support break with a seven day rally. The pink trendlines define this seven day advance, which could be a rising flag or wedge. A move below 36.5 would Read More 

ChartWatchers

INTERMARKET CHART SHOWS INFLATION / DEFLATION

by Chip Anderson

Hello Fellow ChartWatchers! In my last article, I went over two key Intermarket relationships - the one between the US Dollar and Commodities and the one between Commodities and the US Stock Market.   (Keep in mind that John Murphy and Arthur Hill describe new Intermarket developments every day in the Market Message area of the website.)  This time I wanted to go into some more detail about that second relationship - the one between commodity prices and the US Stock market. Last time I showed how there is a very strong positive relationship between stocks and Read More 

ChartWatchers

DOLLAR INDEX BOUNCES OFF 200-DAY LINE

by John Murphy

An impressive upside reversal day on Wednesday enabled the Power Shares US Dollar Index (UUP) to bounce off its 200-day moving average as shown in Chart 1 (see arrow). That dollar turnaround was apparently the result of Mr. Bernanke omitting any mention of QE3 in his testimony before Congress that day. That's dollar friendly since infusions of more money into the system resulting from Fed bond purchases weakens the dollar. At the same time, the European Central Bank (ECB) spent more than expected on the second round of its Long-Term Financing Operation (LTRO). LTRO involves three-year Read More 

ChartWatchers

BANKING ON A STRONG 2012

by Tom Bowley

In earlier articles, I wrote about key upcoming resistance on banks and the "January Effect".  Very strong performance in January suggests that equities will continue to rally throughout 2012.  If the recent performance in the banking industry is any indication, consider it confirmation.If you study history, you'll find that the stock market performs very well when banks are leaders.  Since the mid-December low, the S&P 500 has risen 13.91%, while banks have led the advance, gaining 24.80%.  This is a complete turnaround from 2011.  The S&P 500 finished Read More 

ChartWatchers

RYDEX ASSET LEVELS ARE BEARISH

by Carl Swenlin

At Decision Point we keep a close watch on asset levels in the Rydex mutual fund group as a way of evaluating investor sentiment. An important result of these efforts is the Rydex Asset Ratio, which is calculated by dividing assets in the Bear plus Money Market Funds by the assets in the Bull Funds. On the chart below we can see that the Ratio has reached the highest level in 10 years, which shows an unusually high level of bullishness on the part of Rydex investors. Based on previous Ratio tops shown, we can assume that prices are likely to correct or consolidate at the very least Read More 

ChartWatchers

Small-caps Continue to Lag as Russell 2000 Breaks February Lows

by Arthur Hill

Relative weakness in small-caps remains a concern for the broader market. Smaller companies are less diversified and have less exposure abroad, which makes them more vulnerable to changes in the domestic economy. As such, small companies are like the canaries in the economic coal mine. They are the first to benefit from an upturn in the economy, but also the first to suffer from a slow down. Chartist, therefore, should keep an eye on small-cap performance for clues on the economy. The chart above shows the performance of the Russell 2000 ($RUT) relative to the S&P 100 ($OEX) using Read More