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January 2013

ChartWatchers

January's Technical Market Review - Looking Bullish So Far

by Chip Anderson

Hello Fellow ChartWatchers! So far, 2013 is proving to be very interesting with bullishness dominating the stock market so far.  Since the start of the year, most of the major US market averages are up over 4% with the Russell 2000 (+5.12%) leading the way. Looking at the market capitalization PerfChart, we see that everything is positive with the S&P 400 Mid-Caps (+5.24%) posting the largest gain. On the S&P Sector side of things, everything is up however technology and utility stocks are significantly lagging the other sectors. Read More 

ChartWatchers

GOLD BULLISH PERCENT INDEX STILL IN DOWNTREND

by John Murphy

Whenever we look at gold, it's a good idea to check on the trend of gold miners. The orange bars in Chart 1 show the Market Vectors Gold Miners ETF (GDX) still in a downtrend, but trying to stabilize. The first thing the GDX needs to do to improve its short-term trend is to clear initial resistance near 47.50 (orange line). It also needs to see stronger chart action in individual gold mining stocks. The black line plots the Gold Miners Bullish Percent Index ($BPGDM), which measures the percent of gold miners in point & figure uptrends. That line has been in a downtrend since October Read More 

ChartWatchers

Currency Wars!

by Greg Schnell

Back in November I blogged about the currencies and the events around them. Recently in Early January, 4 of the currencies in the Dollar Index were testing the trend line for the dollar cross.  Today, 3 of 4 of those currencies broke down this week, and the Euro is losing strength.  Keep watching as currency changes can help time market breakdowns. The Euro makes up 56% of the dollar basket, so until it breaks, this bull train continues.First of all here is the British pound. It fell dramatically this week. $XBP  It lost the 50 DMA, the trend line, and the 200 DMA all Read More 

ChartWatchers

The Best Sector for 2013

by Tom Bowley

Technicals do change and I reserve the right to change my opinion as price action evolves, but the energy sector looks like THE ONE for 2013.  I remain bullish the stock market overall so I expect most sectors will perform well in 2013.  Keep in mind that money rotates from sector to sector to sector and last year's leaders tend to pass the torch in subsequent years. First, let's recap 2012 performance.  Of the six "aggressive" sectors (financials, technology, consumer discretionary, industrials, energy and materials), energy was the only sector with a return below Read More 

ChartWatchers

A Close-Up on AAPL

by Richard Rhodes

Next week, the markets will be focused upon the incoming earnings reports; and in particular - Apple's (APPL) earnings after Wednesday's close. Over the past several months, AAPL has declined rather sharply off its highs around $700 down to its current trade at $500; which is due in large part to an increase in competitiveness of other product manufacturers such as Samsung - and a report out that AAPL is downsizing its number of component orders. Presumably, this means less iPhones and other gadgets. Our interest in this stems from the technical viewpoint, which in our opinion is Read More 

ChartWatchers

Equal-Weighted Beating Cap-Weighted Again

by Carl Swenlin

I have long been a cheerleader for equal-weighted indexes versus cap-weighted ones, and now seems like a good time to demonstrate why. In a cap-weighted index stocks influence the price of the index based upon their market capitalization (price time number of shares). For example the top 50 stocks in the S&P 500 Index represent about 70% of the index value, with the remaining 450 stocks providing only 30%. With an equal-weighted index all stocks carry the same weight -- all the horses are pulling the wagon. Decision Point follows a number of equal-weight indexes, with the chart below Read More 

ChartWatchers

It’s Big Wedge Versus Little Wedge for XLK

by Arthur Hill

The Technology SPDR (XLK) has been lagging the broader market for some time now, but the trend since mid November remains up and a bullish continuation pattern is taking shape this month. Weighed down by its top components, XLK has been lagging the S&P 500 ETF since September. Relative weakness continued in January as the price relative fell further the last 2-3 weeks and recorded a 52-week low. Relative weakness in this key sector SPDR is negative, but the trend since mid November remains up. The blue trend lines show a rising wedge taking shape the last two months. ven though rising Read More 

ChartWatchers

GOLD - BOTTOM FISHING OR LOST WRECKAGE

by Greg Schnell

Gold has become pretty unloved. That in itself is usually bullish. This week we look at why it might be time to renew your interest in Gold and the miners.First of all, Lets look at the Gold Miners. Here is a link to the live chart. Gold Miners Index. Lets start at the $BPGDM. First of all, the Bullish percent index is very close to the level it normally reverses at which is denoted by the green line. The index has 29 stocks in it, so each stock is more than 3% influence. It would only require 2 stocks to change the index below the line. So, getting into bullish territory. In Read More 

ChartWatchers

NEW FREE EDUCATIONAL VIDEO SERIES AT STOCKCHARTS

by Chip Anderson

Hello Fellow ChartWatchers! Happy 2013!  I'd thought we'd start the year off with a bang by announcing a major new section of our website - the StockCharts Videos Archive.  We've been working hard creating new educational videos that can help anyone understand how to use our charting tools better.   Many of the new videos are hosted by Arthur Hill, our senior technical analyst.  We also have video excerpts from our recent ChartCon conferences.  And best of all, these are all free! Click here to see our new Videos Archive page Enjoy! - Chip Read More 

ChartWatchers

RECORD HIGH BY SMALL CAP STOCKS IS A POSITIVE SIGN FOR THE MARKET

by John Murphy

One of the most impressive technical developments of Wednesday's stock surge was the ability of the Russell 2000 Small Cap Index (RUT) to reach a record high. [The S&P 500 Midcap Index did the same]. The chart shows the RUT closing above previous highs reached during 2011 and 2012. Although not shown here, the RUT also cleared its 2007 peak. The blue line is a ratio of the RUT divided by the S&P 500. The ratio peaked in spring 2011 which began the correction/consolidation period that's existed since then. The ratio reached a new three-month high yesterday and broke its 18-month Read More 

ChartWatchers

THE LOW IS AHEAD

by Richard Rhodes

January 2013 has rolled in, with the "fiscal cliff" solved for the moment; and now there are concerns "QE-4" will end sooner rather than laterand perhaps below 2013 ends. Collectively, the passing of the fiscal cliff and the new QE-4 concerns pushed 10-year note yields higher; however, given "QE-4" has begun, and the growing concerns over raising the US debt ceiling - all should contribute to pushing 10-year yields lowerin all probability to new lows below 1.394%. This is our opinion; and it is our opinion this should be the "final move", and prep the landscape for a generational Read More 

ChartWatchers

FOUR-YEAR CYCLE LOW WILL BE LATE

by Carl Swenlin

Calculating from the Four-Year Cycle low in 2009, the next cycle low is due in two months, but unless there is a major crash, that projection will not be realized. In fact, we can't even say that there has been a cycle crest yet, although, given the proximity of current prices to the tops in 2000 and 2007, it is likely that a long-term top will be put in soon. Obviously, the Four-Year Cycle does not repeat at exact intervals -- the last one lasted almost six years from trough to trough -- and it appears that the current cycle is going to be extra long. A "normal" downside for the cycle Read More 

ChartWatchers

GAUGING THE JANUARY EFFECT

by Tom Bowley

Happy New Year!!!  Here's to good health and good fortune in 2013!   Now is the time when market pundits give their predictions for the stock market for the upcoming year.  While it might be entertaining to try to figure out where the S&P 500 might finish in 2013, one of the best predictors of yearly stock market performance lies within January performance.  You wouldn't think that how the market performs in January could have a strong influence on what will happen the next 11 months, but history says it makes a HUGE difference.   Let's Read More 

ChartWatchers

Gold Miners ETF Tests Support near Fibonacci Cluster

by Arthur Hill

It was a volatile week for gold and gold miners, but the Gold Miners ETF (GDX) remains at an interesting juncture that warrants attention. After surging above 47 to start the New Year, the Fed minutes on Wednesday put some doubts on the future of quantitative easing. Keep in mind that the Fed announced its latest quantitative easing program in mid September and suggested then that it would be open ended. Even though the Fed minutes got the blame for this week's plunge back below 46, I am not so sure of this connection because gold and the Gold Miners ETF (GDX) have been moving lower since Read More