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August 2014

ChartWatchers

Europe is Helping Drive the Treasury Yields Lower

by John Murphy

The yield on the 10-Year Treasury Note fell to 2.34% this week which is the lowest level in fourteen months. Heavy buying of Treasury bonds in an apparent flight to safety was a big reason for the yield plunge. A bigger reason may have signs of economic weakness overseas, mainly in Europe and Japan. Japan's economy had a very bad second quarter, which kept pressure on its central bank to keep monetary policy very loose. Japan's 10-Year yield is the lowest in the developed world at .50%. Bad economic news also came from Europe's three biggest economies. France GDP growth is stagnant, while Read More 

ChartWatchers

The Banks (KBE) and (KRE)- Riverside Trade Or Cliffside Trade?

by Greg Schnell

The SPDR Regional Bank Tracking ETF (KRE)  is at a significant tradable decision point. So is the SPDR Bank ETF (KBE). While banks are not associated with the growth part of the market, they usually smell trouble before most of the other industry groups. On a chart, we consider the last bar of information the most important because its tradable. The rest is just history! Good history but it is the shoulda-woulda-coulda part of the chart. Digging in on the two SPDR Bank ETF's is timely this week because its a potential trade. First the Regional Banking Read More 

ChartWatchers

Things Overheard at ChartCon 2014

by Chip Anderson

Hello Fellow ChartWatchers! First off, thanks again to everyone that attended ChartCon 2014 last weekend in Seattle.  From my perspective the conference was a huge success with lots of great speakers, great presentations, great discussions, great food, and great weather.  For those of you that weren't able to attend I have some good news - we were able to video tape this year's conference and we are in the process of reviewing and editing that footage right now.  Our goal is to make it available either online or via DVD in the coming months.  Stay tuned! Read More 

ChartWatchers

What to Watch on the Gold Breakout

by Arthur Hill

Gold broke out with a surge in early August, but stalled the last eight days and failed to follow through. Despite lack of follow through, the breakout is holding and has yet to be proven other wise. Let's see what it would take to prove this bullish signal wrong. The chart below shows the Gold SPDR (GLD) breaking out of the big wedge in mid June and holding this breakout with the bounce off 123 in early August. The ETF then broke out of the little wedge and the breakout line turns first support in the 124.5 area. At this point, I think a close below 124 would negate the little wedge Read More 

ChartWatchers

Getting a Quick Daily Market Overview

by Carl Swenlin

After Erin's presentation at ChartCon 2014 many attendees responded positively to learning about the DP Daily Update, which is located in the DP Reports Blog (available to StockCharts EXTRA and above subscribers). The purpose of the DP Daily Update is to quickly review the day's action, internal condition, and Trend Model status of the broad market (S&P 500), the nine SPDR Sectors, the U.S. Dollar, Gold, Crude Oil, and Bonds. To ensure that using this daily reference will be quick and painless, we are as brief as possible, and often we let a chart speak for itself. While individuals Read More 

ChartWatchers

Price Support Holds After Momentum Slows

by Tom Bowley

The NASDAQ has been powering forward off the mid-April lows and one big reason has been the semiconductor industry.  The Philadelphia Semiconductor index ($SOX) rose 15% in just a seven week period from May 15th through July 3rd.  From there, a severe long-term negative divergence printed and that suggested that the move to the upside - and the momentum - was slowing.  In my opinion, these negative divergences are among the most significant technical indications of an impending top and, if nothing else, should suggest that risks are increasing on the long side.  Check Read More 

ChartWatchers

ChartCon 2014 Starts on Friday!

by Chip Anderson

Hello Fellow ChartWatchers! ChartCon week is finally here!  Here's a visual representation of what that means for me currently: That's a picture of me currently - overworked and overwhelmed and without any of my hair! I'll be honest - pulling together all of the loose ends that go into holding a successful conference is a ton of work.  Fortuntately I have several great people helping me out (THANKS!). Even so, I am too swamped to write a proper article this week.  Fortunately John and Art and Greg and Erin and Tom have all Read More 

ChartWatchers

VIX Jumps to Four-Month High

by John Murphy

As usually happens when stocks weaken, the CBOE Volatility (VIX) Index jumped sharply this week to the highest level since April. The VIX (also called the "fear gauge") has climbed 47% since the start of July. That means that traders are buying "option" insurance against a possible downturn in stocks. The red bars in Chart 10 show that the recent upturn in the VIX is the biggest since January. That's consistent with a short-term correction. A move above its spring highs, however, (18.22 and 17.85) would be more cause for concern. Generally speaking, VIX closes much above 20 often signal a Read More 

ChartWatchers

Homebuilders Lead Bear Attack on S&P 500

by Tom Bowley

Warning signs have piled up for months, but there have been few breakdowns to confirm all of these bearish signals.  That changed last week as volume surged leading to breakdowns across many of our major indices, sectors and industry groups.  One obvious problem was the S&P 500's inability to protect its 50 day SMA.  Check out this 6 month chart: If you look back, you'll see that the S&P 500 surrendered its 50 day SMA in January and April, only to recover and extend its current bull market.  But there is a difference this time.  Many intermarket Read More 

ChartWatchers

Indicators Oversold and Reaching Extremes

by Erin Swenlin

We've been watching our DecisionPoint indicators very closely over the past week as they have moved into neutral and now oversold territory. All three time frames are technically bearish as the indicators continue to fall without bottoming. Carl had written about a minor selling climax in the DecisionPoint blog about a week ago. Thursday we got a major climaxes on our ultra-short-term and short-term indicators. Looking at the chart below from the DecisionPoint Chart Gallery, you can see that Thursday price broke down out of the ultra-short-term bearish rising wedge Read More 

ChartWatchers

Nasdaq 100 and S&P 500 AD Lines Trigger Signals

by Arthur Hill

While the S&P 500 and Nasdaq 100 moved to new highs in late July, their respective AD Lines did not follow suit and formed small bearish divergences. The lower highs in the AD Lines indicate that breadth did not keep up with the underlying indices, which suggests narrowing participation.  The first chart shows the S&P 500 AD Line ($SPXADP) forming a slightly lower high last week and breaking below the mid July low with a sharp decline. The indicator window shows the S&P 500 breaking below its July lows as well. This means both the AD Line and the index are in short-term Read More 

ChartWatchers

Is Grease A Commodity? The $CRB Starts To Slide

by Greg Schnell

The Commodity Research Bureau Index ($CRB) has had a very volatile year. Just when the trend looked to be accelerating, it rolled over. Lately, the US Dollar ($USD) started to accelerate on July 1 as pointed to by the long green arrow. The $CRB rolled over since then as denoted by the red arrow. We also saw the Russell 2000 ($RUT) top on the same day. Now, when we look at the Energy SPDR (XLE) and  Materials SPDR(XLB) it looks like they were just breaking down in the last few days based on Chart 2.  Read More