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November 2015

ChartWatchers

Taking Full Advantage of ChartLists

by Chip Anderson

Hello Fellow ChartWatchers! The markets had a very good week last week and are trying to climb above lots of built-up resistance from earlier in the year.  On the Dow chart, that means that the index struggles each time it nears 18,000 - something it is doing once again.  Many of our commentators are skeptical however Tom Bowley is definitely NOT in that camp.  Skip on down to the articles in the rest of this issue to see why. Taking Full Advantage of ChartLists There are really three key reasons to become a StockCharts member: Read More 

ChartWatchers

S&P 500 Regains Its 200-Day Average

by John Murphy

S&P 500 REGAINS ITS 200-DAY AVERAGE -- EQUAL WEIGHTED VERSION LAGS This time last week, the S&P 500 Index had fallen back below its 200-day average and was testing chart support at its September peak at 2020 (and its 50-day moving average). It survived that test and regained its 200-day line this week. In so doing, its 3.27% gain was the biggest of the year. Large caps, however, which dominate the cap-weighted SPX, are still leading the market higher. The bottom chart shows the Guggenheim S&P Equal Weight ETF (RSP) still trading below its 200-day line. Since all stocks in Read More 

ChartWatchers

Four Reasons The Market Is Heading Higher

by Tom Bowley

On the surface, the rout that took place in August has been completely reversed and, three months later, it's like nothing ever happened, right?  Wrong.  What has happened is that the S&P 500 rose from August 19th's close of 2079.61 to Thursday, November 19th's close of 2081.24 - less than two points - but the rotation underneath is the real story.  After the scare off the August lows and subsequent rally, the big question is..is the rally about to end or are we on the brink of another significant rise in U.S. equities?  I believe it's the latter and here's why: Read More 

ChartWatchers

Where Did Momentum Go? Nowhere.

by Erin Swenlin

The most recent bounce/rally was impressive, pushing prices toward overhead resistance at the November high or even to all-time highs. The problem is that during that rally, the Price Momentum Oscillator (PMO) didn't react. It did turn negative momentum to "positive" but barely. Take a look at the charts of the four major indexes that we track in the DecisionPoint Chart Gallery, in all of them momentum has been completely flat during this bounce. This suggests internal weakness. Additionally with the OEX and SPX, volume has not been with the rally either. Read More 

ChartWatchers

Strong Earnings = Strong Performance

by John Hopkins

At EarningsBeats.com we focus squarely on stocks that beat earnings expectations and also have strong charts. We do this as we have found that companies who report strong numbers get a lot of attention which makes sense given the single most important attribute investors look for in a company is a strong bottom line. For example, Heartland Payment Systems (HPY) recently reported their numbers and beat both earnings and revenue expectations. And as you can see below, shareholders were rewarded with a very nice move to the upside with the stock just hitting an all time high: Read More 

ChartWatchers

Some Apparel Retailers Start To Pop

by Greg Schnell

Heading into Christmas, Apparel Retailing has been a pretty difficult industry group for those who were optimistic on it. This week saw a few apparel retailers start to surge. On Friday specifically, a few things changed that might give the group some power finishing out the year.   First of all, Ross Stores (ROST) surged from being one of the middling stocks in the group to being one of the leaders. It has had earnings gaps in the past during a big uptrend and Friday was another gap up on earnings. The last earnings report was a gap down, but that was really the exception Read More 

ChartWatchers

The Two Weeks that Weren't

by Arthur Hill

The S&P 500 SPDR (SPY) acted just like a roller coaster the last two weeks. It took traders for a wild ride and then dropped them off right where they started - a little frazzled no doubt. SPY opened near 209 on Monday, November 9th, and then plunged to close near 202.5 the following Friday. The ETF formed a long filled candlestick (black) that reflected a week of strong selling pressure. SPY started the following week with an open just below the prior close, but quickly found its footing and surged back toward the open of November 9th. We now have a long hollow candlestick (white) Read More 

ChartWatchers

Another Painful Reminder - Hold Stocks into Earnings at Your own Peril

by John Hopkins

Earnings season has been in high gear the past few weeks with thousands of companies reporting their numbers. So far the results have been mixed but maybe better than most expected with the S&P now back to within striking range of its all time high. One of the things we preach all the time at EarningsBeats.com is to avoid holding stocks into earnings reports. Why? Because you never, ever know how the market might react to a company's report. If you want to see a prime example of the risk of holding a stock into its earnings report, look no further than Buffalo Wild Wings (BWLD) who Read More 

ChartWatchers

Stock End the Week Mixed, But Still In Uptrend

by John Murphy

Friday's jobs report caused some minor profit-taking in major stock indexes, but not enough to alter the current uptrend. The chart below shows the S&P 500 dropping slightly Wednesday through Friday (but closing up for the week). I've pointed out that stocks are up against chart resistance along their summer highs and in a short-term overbought condition. That could lead to some backing and filling like we saw this week, but nothing too serious. The longer range trend remains positive. Initial chart support for the SPX is at 2060 which coincides with its rising 200-day moving Read More 

ChartWatchers

The Stock Trader's Almanac for 2016 is Here!

by Chip Anderson

Hello Fellow ChartWatchers! We're pretty busy today re-vamping our network security systems so I only have time for a quick post with two important points: 1.) The Dow has shot up a ton recently and is ready for a pull-back. The MACD line shows faltering momentum - specifically, the MACD histogram is declining towards a bearish signal-line crossover.  In addition, the Dow is now in a huge zone of overhead resistance which is evident from the two big "Volume-by-Price" histogram bars sticking out from the left side of the chart. Read More 

ChartWatchers

Is Asia Ready To Pop To The Upside?

by Greg Schnell

China (ASHR) has been a roller coaster for investors in the system. After making a meteoric rise of 150% in one year, the prices dropped by 48% and have now risen 31%. Today marks a very interesting place on the charts.  The zoom panel on the right shows the Relative Strength in purple breaking out to 2-month highs. Fresh breakouts to three-month highs were very bullish on the chart below and is usually a good thing to keep track of. The MACD has given us a positive cross and this is trying to accelerate with 2 positive histograms on the MACD (look in the zoom panel for the Read More 

ChartWatchers

Banks Rise On Surge In Yields

by Tom Bowley

The employment report showed that 271,000 jobs were added in October, above even the highest estimate and that sent traders flocking out of treasuries.  But what was bad news for treasuries was great news for banks.  Higher treasury yields generally lead to higher net interest margins for banks.  Technically, the Dow Jones U.S. Bank Index ($DJUSBK) was already showing very bullish signs so the strong jobs report simply added to it.  On Friday, financials led all sector performance with banks, investment services and life insurance companies leading the charge.  The Read More 

ChartWatchers

Using Correlations to Quantify the Effect of Rising Rates

by Arthur Hill

Chartists can use the Correlation Coefficient to understand the relationship between Treasury yields and certain groups, such as banks, utilities and REITs. The chart below shows the 10-year Treasury Yield ($UST10Y) in the main window and seven correlations in the indicator windows. I am using weekly data, a 13-week Correlation Coefficient and a 26-week EMA for further smoothing. This extra smoothing is because I am simply trying to determine the general tendency. This is clearly not a trading vehicle, but rather an observation to be considered along with the price chart for each ETF Read More 

ChartWatchers

Bear Markets Turning Into Bull Markets

by Erin Swenlin

Let me preface this article by defining bull and bear markets according to DecisionPoint. DecisionPoint considers 50/200-EMA crossovers the distinguishing factor between a bull market and bear market. These crossovers are what determine the Long-Term Trend Model signals. We have two of the major indexes covered in the DP Chart Gallery (non-members only have access to SPX) in "bull markets". The Nasdaq 100 never actually had the negative 50/200-EMA crossover so it has remained in a bull market even through the August correction. I thought it would be interesting to see Read More