ChartWatchers Newsletter logo

March 2014

ChartWatchers

$COPPER Tries To Rebound

by Greg Schnell

Dr. $COPPER made a big pullback below support. In the last day it surged above resistance. This may have more to bounce. Two major resource indicators turned up recently. The first I have been watching for a while, the Aussie Dollar. Excellent positive divergence and a break above the 40 WMA. Look at the Brazilian Stock Market. The $BVSP has nice positive divergence on the double bottom pattern. Both of these charts, worlds apart have Read More 

ChartWatchers

Numerous Negative PMO Divergences On Rydex Funds

by Erin Swenlin

I noticed a number of PMO negative divergences appearing on the Rydex Funds while clicking through the assets and cashflow charts in the DecisionPoint Rydex ChartPack. Not only are there negative divergences, many of these funds are still showing a large amount of assets and cashflow into them.  Take a look at the following: You can see how these divergences led to declines once the selling began, Biotechnology is an excellent example. Cashflow into the funds is tailing off, but assets remain high. In the case of Read More 

ChartWatchers

Volume Ratios Turn Bearish

by Carl Swenlin

In his book "Winning on Wall Street", the late Marty Zweig showed us the value of volume ratios. A ratio of 9:1 or greater of up/down volume is considered to be very bullish and 9:1 down/up volume is considered to be very bearish.  We certainly met the bearish threshold today. In the short history shown on the chart, we can see that it is a mixed bag. Quite often the ratio spike actually pegs an important bottom, but other times it occurs earlier in a decline. (To see a live version of this chart click here.) Considering that prices are due for a Read More 

ChartWatchers

March Madness Underway

by Tom Bowley

Nope, I'm not referring to college basketball.  Instead, it's this wacky stock market.  In my last article, I discussed several reasons why the 2014 advance is on shaky ground.  Since then, we've seen increased volatility and lots of whipsaw action.  Earlier in March, our major indices pushed to fresh 2014 and/or all-time highs and briefly even suggested money was rotating back into more aggressive areas of the market.  For instance, I had questioned the lack of leadership of banks ($BKX) just a couple weeks ago.  Well, that changed in early March and banks Read More 

ChartWatchers

U.S. Stocks Have a Bad Week

by John Murphy

My Wednesday message warned that the Dow Industrials could run into profit-taking near its January highs, and that weekly indicators for the S&P 500 were giving "negative divergences" which also warned of a market pullback. Combined with increased tensions in the Ukraine and increased concerns about problems in the Chinese economy, it was no surprise then to see the markets fall sharply later in the week. And some short-term technical damage was done. Chart 1 shows the Dow Industrials falling below its 50-day average (on rising volume). At the same time, the 14-day RSI line (above Read More 

ChartWatchers

Using StockCharts' "Golden Line"

by Chip Anderson

Hello Fellow ChartWatchers! There's been a sea-change in the markets with the recent uncertainty about Russia and the Ukraine.  Almost instantly the bullishness on the Sector Rotation charts turned into bearish concern with defensive sectors like Utilities taking off.  John Murphy, Art Hill and the rest of our great commentators have a lot more to say about these changes so scroll down if you want to see their take on things. This week, I, on the other hand, wanted to talk about a part of our Home page that almost everyone overlooks.  During our SCU seminars, we spend a Read More 

ChartWatchers

Will This Market Continue To Fall?

by Greg Schnell

This week, the market moved down every day. Wednesday spent the entire day below Tuesday's close except for the last few minutes. That does make a short term trend, again a short term trend. By closing Friday without rebounding,  it would appear that investors didn't want to jump in and push the market higher on a Friday close. I have three charts that tell me the market is setting up to be more defensive. Is it next week? We don't know, but we do know money is shifting in defensive areas. My first chart is the XLU. The SCTR has now pushed up above 70. It started back in January Read More 

ChartWatchers

Treasury Bond ETFs Surge off Golden Crosses

by Arthur Hill

Stocks and bonds have been inversely correlated for most of the last four years, which means they tend to move in opposite directions. This inverse correlation showed up in January as stocks swooned and Treasuries surged. February was mixed because stocks surged and Treasuries traded flat. The inverse correlation reasserted itself this week as stocks dipped and Treasuries surged. I am particularly interested in this weeks surge because the 7-10 YR T-Bond ETF (IEF) and 20+ YR T-Bond ETF (TLT) held their golden crosses. A golden cross occurs when the 50-day moving average moves above the Read More 

ChartWatchers

I Didn't Know StockCharts.com Did That! v.2.0

by Chip Anderson

Hello Fellow ChartWatchers! Last year, I had an article dedicated to things that many people didn't know about StockCharts.com.  The list was based on our customer support questions and the feedback we get from our live seminars.  I thought now would be a good time to revisit and update that list. Our Twitter Feed - we are still faithfully tweeting out alerts whenever interesting technical events happen.  Yesterday, we had some doozies: Technical Alert: S&P 500 sets new all-time high at 9:46am $SPX http://t.co/kYAeEpoPie #sccalerts #stockcharts Read More 

ChartWatchers

Schlumberger and Halliburton Lead Oil Service Rally

by John Murphy

The two biggest stocks in the OIH also happen to be two of the strongest. The weekly bars in Chart 4 show Schlumberger (SLB) nearing a test of its fourth quarter high near 94. A close above that level would put the oil service leader at the highest level in six years. The SLB/SPX relative ratio (above chart) is also starting to rise for the first time since 2011 (when crude oil started to weaken). Halliburton (the second biggest OIH stock) has an even stronger pattern. Chart 5 shows Halliburton (HAL) ending February at a new record high after clearing previous peaks formed during 2013 and Read More 

ChartWatchers

Pardon The Interruption

by Tom Bowley

Make no mistake about it, I prefer to be bullish.  History supports this notion because the stock market has always tended to move higher more than it moves lower.  Dating back to 1950, the S&P 500 has moved higher over 53% of trading days.  Did you know that the S&P 500 has finished lower only 6 of the past 32 calendar years?  Three of those down years were consecutive years from 2000 through 2002.  Of the other 29 years since 1981, only 3 were lower.  There's an undeniable bias to the upside in equities over the long-term, so you really have to pick Read More 

ChartWatchers

Decision Time For The Euro

by Greg Schnell

The Euro made a startling move higher on Friday. Rather than get into the daily perspective, I wanted to take a minute to look at the long term view of both the Euro and the Dollar Index. The $XEU is the Euro /  US Dollar cross, whereas the $USD is the Dollar Index which reflects a basket of currencies. The Euro is the largest chunk of the Dollar Index, but the remaining currencies make up 42.2%. Here is the view since the Inception of the Euro. Two real big picture concepts on the upper chart. The Euro has spent the vast majority of the chart below the red line. I have placed the Read More 

ChartWatchers

Analyzing the Recent Rise in Investor Sentiment using the DP Chart Gallery

by Carl Swenlin

The bulls had been dropping out of the ring during the recent correction, but they're baaaaack.  The DecisionPoint Chart Gallery has a section devoted to sentiment. There is the Investor's Intelligence Survey chart with not only the percentage of bulls and bears, but also a bull-bear ratio. And there is the DecisionPoint Rydex Asset Ratio chart. Both illustrate that bullish sentiment is rising Investor's Intelligence surveys over a hundred independent market newsletters and assesses each author's current stance on the market: bullish, bearish or correction. The results are below in Read More 

ChartWatchers

Finance Sector Lags as Consumer Discretionary Catches Up

by Arthur Hill

The market can be divided into nine sectors using the S&P Sector SPDRs and the Rydex Equal-weight Sector ETFs. These sectors can be subsequently divided into three groups: offensive, defensive and other. Technology, finance, consumer discretionary and industrials make up the offensive group, which is key to a healthy bull market. Healthcare, consumer staples and utilities make up the defensive group, which typically outperforms when the market is in risk-off mode. The energy and materials sectors represent the "other" group. In a bull market, which we are in, I am most concerned with Read More