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June 2013

ChartWatchers

Emerging Market iShares Plunge

by John Murphy

The biggest threat to the global stock rally is coming from emerging markets. The weekly bars in the chart below show Emerging Market iShares (EEM) falling to the lowest level in nine months. It has also broken a support line extending back to the fourth quarter of 2011. Emerging market bonds and currencies have also fallen sharply. My June 1 message explained that rising U.S. Treasury yields undercut demand for emerging markets by reducing the appeal of higher-yielding foreign assets. I also expressed concern that weakness in global markets might cause some profit-taking in the Read More 

ChartWatchers

US Dollar Bear Market

by Richard Rhodes

The US Dollar has declined rather sharply over the past 2-weeks, which given the scope of the decline - has likely pushed it into a bear market. The reasons for this could be myriad; or simply that the Fed will continue upon the bond-buying campaign far longer than the consensus believes. Now, this doesn't mean they will not taper, but perhaps the new Fed Chairman will extend this campaign through 2014which means that the market is pricing the appointment of Vice Chair Yellen as the Fed Chairwoman. Regardless, the technical picture is breaking down. The decline has violated the Read More 

ChartWatchers

Is this a VIX Top and a Market Bottom?

by Tom Bowley

Volatility plays a role in any market environment, but I always look to key areas of resistance on the VIX to help identify tradable bottoms on the S&P 500.  In my last article on June 1st, I suggested that the 18-19 resistance on the VIX could prove to be key.  Thus far, it has been.  The VIX has hit this resistance level with the S&P 500 also sitting almost squarely on trendline, price and moving average support.  If the S&P 500 were to lose these support levels, we could see the VIX push up to the 22-23 area, a much bigger level in my view. Read More 

ChartWatchers

Long-Term Look at the Nikkei

by Carl Swenlin

The Tokyo Nikkei Average has been in another free-fall since the top in May, falling -22%. Before we get to the long-term chart, let's look at the one-year daily bar chart. The average rose +82% in just six months in a parabolic move that was doomed from the start. They almost always are. When a parabolic move breaks, as it did in May, the speed of the decline can be catastrophic. The downside expectation is for prices to return to the level of the basing pattern that preceded it. In this case between 8300 to 9100. That is not a prediction, just the level we at which we might expect to Read More 

ChartWatchers

S&P 500 Remains with a Flag that Refuses to Fly

by Arthur Hill

The S&P 500 got a two day bounce last week and a nice surge on Thursday, but fell back Friday as it met resistance at 1650, which is now the short-term level to beat. Overall, notice that the index formed a falling flag type correction the last four weeks. After a sharp advance from mid April to mid May, the index was overbought and ripe for a rest. The falling flag provided this rest and alleviated oversold conditions with a modest pullback. Notice how broken resistance in the 1600 area turned into support. he flag is still falling and has yet to be confirmed as a bullish Read More 

ChartWatchers

Now You Can Customize GalleryView Charts - This Might Just Change Everything!

by Chip Anderson

Hello Fellow ChartWatchers! GalleryView has been a often overlooked gem here at StockCharts going all the way back to the beginning of the website.  Today we're pleased to announce an important new feature for GalleryView but first, I wanted to go over exactly what GalleryView is and how it can be used. GalleryView takes any ticker symbol and shows you four, fixed-format charts for that symbol on one page.  The first chart shows you five days of 10-minute candles.  The next chart shows you several months of daily candles followed by a chart with a couple of years of Read More 

ChartWatchers

"Hindenburg Omen" Triggered after Friday's Big Market Reversal

by Chip Anderson

Hello Fellow ChartWatchers! It happened in mid-April and it happend again on the last day of May.  The ominous sounding "Hindenburg Omen" signal has been given.  Here's the chart: StockCharts members can click here for a live version of this chart. Here's the definition from our ChartSchool Glossary page: "Hindenburg Omen: Created by James Miekka, the Hindenburg Omen warns of potential weakness in the stock market. There are three criteria to activate the omen. First, NYSE new highs and new lows must both be more than 2.8% Read More 

ChartWatchers

Bullish Percent Indexes Stretched to Both Extremes

by Greg Schnell

Some of the most powerful,informative gauges of sentiment towards the market are the Bullish Percent Indexes.If you are not familiar with them, you can read about them here by clicking on this link. Bullish Percent IndexesRecently, some of the Bullish Percent Indexes reached extremes that have not been reached before.The chart below shows the Major Indexes BP readings. Click here for a link. $BPSPX  These charts are daily to see if there are any pinnacle readings, rather than weekly closes. The $SPX set a new record being above 90%. The $SPX has never been higher. More than 450 Read More 

ChartWatchers

Emerging Market Stocks Fall Hard During May

by John Murphy

The main story of the past week has been the upside breakout in U.S. Treasury bond yields to the highest level in thirteen months, and the corresponding drop in bond prices. The jump in bond yields during the month of May contributed to heavy selling of dividend paying stocks -- mainly telecom, utilities, and REITS. The ripple effects of the jump in U.S. bond yields extends to foreign markets as well-- emerging markets in particular. Chart 1 shows Emerging Market iShares (EEM) dropping sharply during May (-3.8%). The biggest emerging market losers during 2013 have been countries tied to Read More 

ChartWatchers

Slowing Momentum Could Pose a Threat to this Rally

by Tom Bowley

That's the bad news.  The good news is that momentum issues are more of a short-term nature than a long-term one.  Still, as traders, we need to respect them just the same. First, let's take a look at the benchmark S&P 500 index on a weekly basis (think BIG picture): The MACD couldn't be much stronger.  As S&P 500 prices have risen to new heights, so too has the weekly MACD.  That suggests that the longer-term rally hasn't ended, so keep this in mind during any short-term periods that are more bearish and frustrating.  The short-term may Read More 

ChartWatchers

US Dollar Index Tests Breakout ahead of Big Economic Week

by Arthur Hill

The US Dollar Index ($USD) is in a long-term uptrend, but the index pulled back this week to test the most recent breakout. A strong breakout should hold, while a weak breakout would fold. This is am important test for the greenback as we head into a big economic reporting week. The chart below shows the index basing from October to February and then breaking out with a strong move above 81.50 in late February. Broken resistance turned into support as the index fell back to the 81.50 area in early May. This fall back formed a falling flag/channel and the index then broke resistance with a Read More