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December 2014

ChartWatchers

US Stocks End Week on a Strong Note

by John Murphy

A combination of factors pushed U.S. (and global) stocks sharply higher during the second half of the week. One big factor was the Wednesday Fed statement that it would be "patient" in raising rates next year. Another was a bounce in a very oversold oil market late in the week which gave a big boost to energy shares (which make up 8% of the S&P 500). Energy shares rose 9.5% and were by far the week's strongest sector. Material stocks (led by copper and aluminum) came in second with a weekly gain of nearly 5%. All other sectors gained on the week as well. Chart 1 shows the S&P 500 Read More 

ChartWatchers

Business Support Services Index Breaks Out After Long Base

by Tom Bowley

Stock market action played out the past two weeks almost perfectly according to historical plan.  In my last article, I discussed the bearish tendencies of equities from December 7th through December 15th and the S&P 500 promptly lost 85 points, or more than 4% during this period in 2014.  But the historical faucet seems to turn from arctic cold to blistering hot overnight as December 16th is the trigger point for the bulls from an historical perspective.  Right on cue over the past four trading sessions, the S&P 500 regained nearly every point that it had lost Read More 

ChartWatchers

Creating a Workflow ChartList

by Erin Swenlin

With the release of several DecisionPoint ChartPacks (to learn more about them and how to install them click here), many users have expressed that they are overwhelmed by the quantity of quality indicator charts. This is not news to me, we had the same feedback from new users to the DecisionPoint.com website. The great news is that you can customize what you see on StockCharts.com, whereas on DecisionPoint.com you had to figure out the links and create a workflow from a static menu. You were limited to using browser bookmarks and favorites to save your charts and because of this, there was Read More 

ChartWatchers

Trend Line Breaks - The Difference In The Display Makes The Timing Critical

by Greg Schnell

Technicians are a serious bunch. When we get a trend line break to the upside or downside, it is very critical for us. It is our trigger. However, the way the data is displayed is very important as well. Here is a chart of 4 related subjects on a performance chart which shows the movement in % terms. They rise and fall together over time but the percentage change is different. A one-to-one fit? No.  The components are the Emerging Markets ETF (EEM), the Emerging Markets Currency ETF (CEW), Brent Crude Oil ($BRENT) and the Hang Seng Index for Hong Kong ($HSI).  They have Read More 

ChartWatchers

Why a StockCharts.com Membership is More Valuable in 2014 Than It Has Ever Been

by Chip Anderson

Hello Fellow ChartWatchers! Stocks rose this past week with the large-, mid-, and small-cap S&P indexes all finishing up around 3.2%.  For the year, the S&P 500 is up over 12%, the mid-caps are up 7.98% and the small-caps are up only 3%; however those numbers are misleading because, over the past 3 months we've see a surge in strength from the small caps.  Since October 1st, small-cap stocks have outperformed mid-cap stocks by 2.2% and large-cap stocks by 3.0%.  And, as Arthur Hill pointed out in yesterday's Market Message articles (which members can see here) Read More 

ChartWatchers

Two Nasdaq 100 Stocks With RS and Bullish Price Action

by Arthur Hill

Chartists can improve their odds by looking for stocks that show relative strength and bullish price action. It is a two-pronged approach that has stood the test of time. I use relative strength to narrow the field and then look for charts with bullish signals. The first image shows a Relative Rotation Graph (RRG) with the top ten stocks in the Nasdaq 100 ETF (QQQ) and QQQ as the benchmark. Together, these ten stocks account for almost 50% of QQQ and can be considered the main drivers of the ETF. Interpreting the RRG chart is simple. Stocks in the green are leading and stocks in the red Read More 

ChartWatchers

German DAX Closes at Record High, US Dollar Index Hits Eight-Year High

by John Murphy

German stocks sold off Thursday after the ECB delayed further monetary easing until the first quarter. Later reports that more monetary stimulus might come as early as January helped boost European stocks which rallied sharply on Friday. Chart 1 shows the German DAX Composite Index jumping 2.4% on Friday to reach a new record. Other eurozone stock markets jumped as well. France rose 2.2%, Spain gained 2.6%, and Italy 3.4%. Friday's strong jobs report in the U.S. may have also improved market sentiment in global markets. The only laggards were oil producers like Brazil, Canada, and Russia Read More 

ChartWatchers

Small Caps Ready to Make a December Run?

by Tom Bowley

As a student of stock market history, I'm often astonished by historical facts about market performance.  December is generally a very solid month for equities and no index benefits more from this seasonal bullishness than the Russell 2000.  Since 1987, the Russell 2000 has risen 24 of 27 years during the month of December, sporting a robust 42.45% annualized return.  It is BY FAR the best month of the year for small caps with the second best month - April - lagging way behind with an annualized return of 19.42%. Of the 3 negative Decembers on the Russell 2000, there was a Read More 

ChartWatchers

How to Take Advantage of StockCharts.com's Holiday Specials!

by Chip Anderson

Hello Fellow ChartWatchers! Well, it is December now and the stock market is STILL in record territory!  The rally that started way back in October 2011 continues to roll on, seemingly without a care in the world.  Skip on down to the articles that follow mine for more information and commentary about that whilst I explain how you can get the most out of our current Holiday Special.  This advice applies to both current members and non-members. The What, The When, The Why, and The How of our Holiday Special The What: From now until Read More 

ChartWatchers

Big Banks And Big Brokers Blow Through Resistance

by Greg Schnell

Friday saw an outstanding jobs number that was 25-50% higher than the expectations. The immediate take on that was the Federal Reserve would have to raise interest rates sooner than the expectations. All that meant that there would be an interest spread for the banks to start working with and all of the big banks and brokers broke through their respective ceilings. Here is the weekly for three of the big banks. Two of these three closed last week below these horizontal resistance areas. Wells Fargo was marginally higher. Here is the daily of the same three Read More 

ChartWatchers

Small-caps Underperform Despite December Seasonal Pattern

by Arthur Hill

There are two bullish seasonal patterns at work right now. First, stocks have shown a strong tendency to advance in December. Second, small-caps have shown a strong tendency to outperform large-caps in December. Over the last twenty years, the S&P 500 has risen 75% of the time and the average gain was 1.60%. The Russell 2000 has risen 90% of the time and the average gain was 3.5%. Yes, you read right. Don't take my word for it, check out our seasonality charts below. This is a pretty staggering statistic that gives the Russell 2000 a bullish bias heading into yearend. Furthermore Read More 

ChartWatchers

Gold Miners: How Low Can They Go?

by Erin Swenlin

I wrote a blog article some time back that questioned whether the Gold Miners stocks had finally hit rock bottom. I concluded that it was a good set-up for a bottom but there was still plenty of room for decline before they hit all-time lows. The stocks in the Gold Mining Industry Index, $DJUSPM may have hit their bottom, but our indicators in three time frames warn us of trying to catch a falling knife. The Market Carpet for the Gold Mining Industry shows just how devastating the last 60 days have been.  Let's Read More