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September 2013

ChartWatchers

The Mighty Mo - Momentum

by Chip Anderson

Hello Fellow ChartWatchers! We've just complete a terrific visit to the New York area where we held our two day SCU seminars and where I was able to squeeze in a visit to the Long Island Stock Traders Meetup Group.  During my presentation to the Long Island group, I needed to show them exactly how the MACD indicator works.  As one of the most popular technical indicators, understanding the MACD is something that everyone should know.  The typical answer is something like "Well, it shows a stock's momentum."  OK, that's fine, but what exactly is "Momentum"? Read More 

ChartWatchers

Bernanke Throws Wall Street A Curveball

by Tom Bowley

Federal Reserve Chairman Ben Bernanke has had several mandates since the financial crisis began several years ago.  One was to keep interest rates extraordinarily low for an extended period of time.  Check.  Another was to make the Fed more transparent.  This one was humming along just fine.until Wednesday's Fed announcement.  Bernanke shocked the financial world by delaying the tapering of asset purchases.  Instead, the Fed Chairman left the current $85 billion monthly asset purchase plan intact.  Investors reacted as if they had received another Read More 

ChartWatchers

Rate Sensitive Stocks Surge on Bond Rally

by John Murphy

The Fed surprised everyone yesterday by deciding not to start its widely anticipated tapering of bond purchases. Although that decision was a surprise, market reactions weren't. In fact, each market did pretty much was one would expect. Bond yields tumbled and bond prices soared. Stocks surged around the world. The dollar plunged along with bond yields which pushed gold and other commodities higher. Foreign stocks surged, especially in emerging markets, which had been hit especially hard by rising U.S. bond yields and a stronger dollar (more on that later). Within market sectors Read More 

ChartWatchers

"Rel-to-52" Shows Fading Participation

by Carl Swenlin

When looking at a chart that shows new 52-week highs and lows, have you ever wondered what is happening with all the other stocks in the index? Where are they in relation to their 52-week high-low range? DecisionPoint.com's "Rel-to-52" index provides that answer.  DecisionPoint.com tracks each stock in the S&P 500 Index and determines the location of its current price in relation to its 52-week high and 52-week low. We express this relationship using a scale of zero (at the 52-week low) to 100 (at the 52-week high). For example, a stock in the middle of its 52-week range would Read More 

ChartWatchers

Metals & Mining SPDR Backs off Resistance with Sharp Decline

by Arthur Hill

After bottoming in late June and advancing some 15%, the Metals & Mining SPDR (XME) hit resistance in the 39 area with a pop-and-drop this week. The chart below shows XME surging above 39 on the FOMC statement day and then giving most of it back with a decline below 38 on Thursday-Friday. Despite this pop-and-drop, the ETF remains in an uptrend since late June. The trend line and last week’s low mark first support just below 37, while the August lows mark key support just below 36. Watch these levels for breaks that could signal a reversal of the three month uptrend. Read More 

ChartWatchers

Bond Yield Reaches New Two-Year High

by John Murphy

The weekly bars in Chart 1 show the 10-Year Treasury Note Yield ($TNX) reaching a new two-year high today and very close to breaching the psychologally important 3% barrier for the first time since early 2011. The TNX has also cleared a five-year resistance line extending back to 2007 (see circle). That leaves little doubt that bond yields are headed higher, and bond prices lower. Chartwise, the next potential upside targets are 3.22% (which is a minor peak formed during summer 2011) and 3.74% (which is a more prominent peak formed in early 2011). I've expressed the view that rising bond Read More 

ChartWatchers

The $TSX Tries To Breakout Again

by Greg Schnell

The $TSX has tried to move above the 12900 level a few times this year. We are approaching it again.Here is the live link to the $TSX Chart. The unfortunate part about this $TSX chart is it looks extremely similar to this link of the  year 2000 chart of the $SPX relative to previous highs.The June low is the only thing that makes this look worse than the $SPX 2000 chart. A series of tests at the highs with multiple tests of the 40 WMA below before failing. However there are some strong positives. This one year view has a couple of major positives going on. For Read More 

ChartWatchers

Financials Suggesting This Bull Market Is FAR From Over

by Tom Bowley

The past 5-6 weeks have not been overly kind to the bulls.  In fact, since topping at 1709.67 at the close on August 2nd, the S&P 500 has lost more than 50 points or roughly 3%.  Many are calling for the end of the four and a half year bull marketfor the umpteenth time.  Eventually, just like a broken clock, they'll get it right.  I don't believe we're there yet and the relative performance of financials is backing me up.  I'll get back to this in just a minute.  But first. Those who follow my column every couple weeks know that I'm a huge fan of Read More 

ChartWatchers

Home Construction iShares Bounces, but Remains Short of Breakout

by Arthur Hill

Treasury yields fell after Friday’s jobs report and interest rate sensitive stocks got a bounce as utilities, REITs and homebuilders moved higher. My focus is on the Home Construction iShares (ITB) because this group is important to the consumer discretionary sector and housing is key to the overall economy. The first chart shows ITB in a downtrend since late May. The ETF broke neckline support from a head-and-shoulders pattern and remains below broken support, which turns into resistance. Downside, however, has been limited since a big bullish engulfing pattern formed in mid August Read More 

ChartWatchers

Bond Yield Very Overbought

by Carl Swenlin

We have been observing how, in spite of the Fed's efforts, bond yields have been persistently rising, but now they have become very overbought. On the weekly bar chart, we can see how a reverse head and shoulders pattern is in progress and yield is headed toward a minimum upside objective of about 42.5. However, we also notice that the PMO (Price Momentum Oscillator) has reached its highest level since 2009, and that it has begun to decelerate. If the weekly PMO tops, yield will probably top as well. To put it into better perspective we have to look at a really Read More 

ChartWatchers

I Didn't Know StockCharts Could Do That!

by Chip Anderson

Hello Fellow ChartWatchers! Things are heating up in the markets now that we are past the Labor Day holiday and people are returning from their vacations.  Currently the market averages appear to be driven largely by news (Syria, G20, etc.) but that should change soon as the Fed clarifies its intentions for the remainder of the year.  Be sure to check out the articles below for more thoughts on where things might be headed from John Murphy, Arthur Hill, Greg Schnell, Richard Rhodes and Tom Bowley. "I Didn't Know StockCharts Could Do That!"  We get this all the Read More