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January 2015

ChartWatchers

Will The Superbowl Start The Rally?

by Greg Schnell

One of the nicest patterns in the technical world is a gradual firming in consolidation with an upside breakout. The hardest part about the pattern is that it wears you out while you wait for the breakout. Each time it starts to break out only to retreat back inside the pattern is very frustrating. Here is an example of what we would like to see happen. I'll take a minute to review the price action.  The breakout on the first chart at $81.44 left you in a house of pain. The breakout at $81.55 was equally frustrating but the pullback had a big gap down in it as well Read More 

ChartWatchers

Trend Model Neutral Signals for SPX, DOW, OEX and NYSE

by Erin Swenlin

We have been watching the SPX closely in anticipation of an Intermediate-Term Trend Model Neutral signal. It is extraordinarily close to reaching that 20/50-EMA crossover as are many of the other indexes. The DOW, OEX and NYSE are the first to generate Neutral signals as the 20-EMA crossed below the 50-EMA. The model will not generate a SELL signal unless the 50-EMA is below the 200-EMA at the time of the 20/50-EMA crossover. Let's first look at the indexes that have already generated Neutral signals. The SPX generated a Trend Model Neutral signal Read More 

ChartWatchers

Is Europe Getting Ready To Run?

by Greg Schnell

There are big expectations for Mario Draghi this week. He is supposed to announce some form of QE. There are a lot of interesting European charts but let's start with the Euro ($XEU). This week, the Euro took out the 2006 low. One of the major things to notice is that the MACD is at the third lowest momentum level in the history of the Euro. While that by itself does not make the low imminent, history would suggest we are near the lows unless we have a complete financial breakdown like the Global Financial Crisis.  The daily chart of the Euro is interesting. For those Read More 

ChartWatchers

Key Tests Approaching in Technology

by Tom Bowley

The nearly six year bull market lives on, but the bulls have been taking several body blows of late.  Whether this bull market continues could depend on a couple of key industry groups within the technology space. First, let's take a look at computer hardware ($DJUSCR).  This is the place that  Apple (AAPL) calls home.  This index topped in late November and has been mired in a bullish wedge the past couple months.  On Friday, the DJUSCR hit price support at a time when its 60 minute MACD is just beginning to turn higher.  Take a look at the daily chart of Read More 

ChartWatchers

S&P 500 Does Battle with a Big Round Number

by Arthur Hill

Even though big round numbers should not have any technical significance, it is hard to argue with the magnetic pull of 2000 on the S&P 500. The index first neared 2000 when it broke above 1975 in July. After a pullback to the 1900 area in early August, the index made another run at 2000 and even crossed this level a few times in September. Alas, the index fell back again in October with a deep plunge below 1850, but came roaring back in November and finally got through 2000. Just as it seemed the 2000 area was going to be relegated to the past, the index fell back below 2000 in mid Read More 

ChartWatchers

How to Attend a Live StockCharts.com Webinar

by Chip Anderson

Hello Fellow ChartWatchers! TGIF!  Today's big turnaround saved us from an otherwise dreadful week as the Dow bounced off of support around 17260, the low at the beginning of the year.  Our standard chart of the Dow shows the situation the best I think: (Click the chart for a live version) Take a second, look at that chart and see if you can spot any significant technical signals.  Once you are done, read on to see what I spotted and then see if you agree. In the near term, the Dow just tested the 17262 low from the start of the month.  If it Read More 

ChartWatchers

Looking Forward to 2015

by Chip Anderson

Hello Fellow ChartWatchers! Happy 2015!  All signs point to 2015 being a very interesting year for the stock market.  The long-term rally that we've had since the lows of 2009 can't continue forever, can it?  Regardless of your opinion on that question, remember that StockCharts.com gives you the perfect perch for monitoring the strength of the market as we head into this crucial 5th year of the rally.  Your can use our long-term charts, our comparison graphs, our market commentators or, ideally, a combination of all of those things to stay on top of exactly what is Read More 

ChartWatchers

Industrial Machinery Index Seems Poised for 2015 Rally

by Tom Bowley

It's easy to follow the crowd and buy what keeps going higher.  But generally larger gains can be found in healthy areas of the market where we've seen months of consolidation, awaiting that next breakout.  As an example, it wasn't that long ago that home construction stocks ($DJUSHB) looked like a broken group.  Take a look at the DJUSHB chart as of early October: As our major indices struggled back in October, it was fairly clear to see that home construction stocks were not exactly desirable from a technical perspective - at least not based on this year-to-date Read More 

ChartWatchers

Deflationary Forces Should Hold Treasury Yield Down

by John Murphy

One of the biggest concerns for 2015 is the prospect for higher interest rates in the U.S. While it's true that the Fed may start to hike rates later in the year, that doesn't mean that bond yields will rise very much. The Fed controls short-term rates, while bond yields are determined by economic strength, inflation expectations, and foreign markets. The chart below shows two deflationary forces that should keep U.S. bond yields under control this year. The plunge in the CRB Index during 2014 suggests that any threat from commodity inflation is nowhere in sight. [The fact that the U.S Read More 

ChartWatchers

Russell 2000 Survives Bollinger Band Head Fake

by Arthur Hill

A month ago in ChartWatchers I wrote about the bullish seasonal pattern for small-caps and featured a big flag pattern on the chart for the Russell 2000 ETF. Trading turned volatile in mid December, but the bullish seasonal pattern held up and the Santa Claus rally ultimately materialized. The Russell 2000 gained 2.68% in December and outperformed the S&P LargeCap 100, which lost .86%. So what now? First, let's review the price action in the Russell 2000 over the last few weeks. The index consolidated from early November to early December and the Bollinger Bands narrowed as volatility Read More 

ChartWatchers

Is Gold The Golden New Years Ticket?

by Greg Schnell

Last year, the bond market surprised us by making its low on December 31 and it went on to rally all year. Gold and the gold miners made a tradeable low December 2013 and rallied for a few months. So I though I would dive into the gold charts today to see if this might happen again. One thing we want to see happen is Gold Miners (GDX) outperform Gold (GLD) . Here is the ratio chart. If it is turning up, the gold miners are starting to outperform the metal. That is usually a precursor to at least a good rally. When this moves above the 50 DMA its a good place to pay attention Read More 

ChartWatchers

The DecisionPoint Trend Model Picture for 2015

by Erin Swenlin

Now that 2014 has drawn to a close, analysts are reviewing history and hoping to prognosticate about 2015. I'd like to review some of the DecisionPoint Trend Model charts for not just the S&P 500 (SPY), but also for the dollar, gold, oil, commodities and bonds. We can see what the current long- and intermediate-term Trend Model signals are going into 2015.  The intermediate-term Trend Model signal has been on a BUY since the 20-EMA crossed above the 50-EMA in October. We cannot see the long-term Trend Model's last signal change on this chart, but as long as the Read More