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June 2016

ChartWatchers

Ch-ch-ch-ch-Changes

by Chip Anderson

Hello Fellow ChartWatchers! Lots of changes in the wind these days both in the stock market and at StockCharts.com.  Here's my 2 minute review of everything coming up over the next couple of months: Big Volume Spike on Friday Fridays are typically slow days for the market and Fridays in June often have very light volume.  Not so yesterday!  Pretty much all of the major market indexes had significantly higher volume on Friday compared to previous days.  Here's a daily chart of the Dow showing that: Dow Bouncing Off of Bottom Read More 

ChartWatchers

Cincinnati Bell (CBB) Revisited

by Erin Swenlin

I wrote an article on Cincinnati Bell (CBB) at the end of May. I stated back then that a move to $4.00 was likely. The Price Momentum Oscillator (PMO) had bottomed but had yet to deliver a BUY signal. Since then CBB has gone through a few changes. The most important being a decisive (> 3%) breakout ABOVE $4.00. Granted Friday's crazy rally helped CBB with the decisive breakout. Apparently Barron's had indicated it was a good BUY. Looking at this daily chart, I would have to agree with the bullishness that Barron's has bestowed on CBB. The PMO triggered a BUY signal in neutral Read More 

ChartWatchers

Only A Few Biotechs Are Performing Well

by Greg Schnell

In a world of aging populations, the biotechs offer a promise of improving our quality of life. For the last year, biotechs have moved convincingly lower. However, there always seem to be some that have their own inertia. Below are three charts of optimism in the biotech space currently. Using the SCTR, it can guide us to stocks with some of the best price action. The top SCTR ranking is Galena Biopharma (GALE). After a two-year downtrend, the stock is finally starting to make new 52 week highs. Some serious volume entered the stock 3 weeks ago, and the momentum is positive for the stock Read More 

ChartWatchers

European Markets Bounce on Friday but Remain in Downtrends

by John Murphy

All eyes are on the British Brexit vote this coming Thursday (June 23) on whether to stay in the European Union or leave. Latest polls show the "leave" vote in the lead. A relief bounce on Friday in Britain and Europe was encouraging, but not enough to turn their trends back up again. Chart 1 shows the British Pound gaining 1% on Friday after an upside reversal day on Thursday. Its trend since late May, however, is still down. It would have to clear its 50-day average to improve it short-term trend. Chart 2 shows a similar pattern in the London Times Financial Index (FTSE). The FTSE Read More 

ChartWatchers

Can Earnings Save the Market?

by John Hopkins

Last week was rough on stocks as fear engulfed the market. All of the major indexes remain below key technical levels with the NASDAQ in particular very weak. And the fear was evident as the VIX rose sharply, hitting levels not seen since February of this year when the market was trying to find its footing. Causes for the recent weakness range from Brexit to confusing messages from the Fed to troubles around the globe. Whatever the real reason(s) traders are reluctant to commit capital to stocks. This got me to thinking that one way to turn things around would be a solid showing in Read More 

ChartWatchers

Finance and Utilities Part Ways as Rates Surge

by Arthur Hill

A sharp decline in Treasury yields is lifting the Utilities SPDR (XLU) and weighing on the Finance SPDR (XLF). First, let's look at the correlations to better understand the relationships. The chart shows the 10-yr Treasury yield in the top window and the Correlation Coefficients in the lower windows. The Correlation Coefficient ($UST10Y,XLF) is clearly positive and the Correlation Coefficient ($UST10Y,XLU) is mostly negative. This means XLF tends to move in the same direction as the 10-yr Yield and XLU tends to move in the opposite direction. On the price Read More 

ChartWatchers

Summary of Recent Scanning Webinars

by Chip Anderson

Hello Fellow ChartWatchers! The markets continue to move sideways with declining volume - both in the long-term view and in the short-term view.  Since April, the Dow has been content to drift aimlessly between 17,500 and 18,000.  Similarly, the S&P 500 is vacillating between roughly 2050 and 2100.  Weekly volume for both indexes declined significantly over the month of May.  As I mentioned in last week's webinar, this is not a good environment for trend-followers and you need to be wary of signals from trend-based approaches right now. Read More 

ChartWatchers

Weakest Jobs Report in Five Years Surprises Everyone

by John Murphy

Friday's job report of only 38,000 jobs created in May was the weakest in more than five years. And it pretty much shocked everyone. Some of the market reactions, however, were reasonably predictable. Interest rate yields tumbled along the entire yield curve. Chart 1 shows the 10-Year Treasury Yield (TNX) plunging 10 basis points and closing near the lowest level since February. Naturally, that pushed bond prices sharply higher. Chart 2 shows the 20+ Year Treasury Bond iShares (TLT) surging to a four-month high. The reason for that sharp reaction was that the weak job report pretty much Read More 

ChartWatchers

Technology Leading With The Help Of Semiconductors

by Tom Bowley

Over the past month, the Dow Jones U.S. Semiconductor Index ($DJUSSC) has risen more than 8% and helped to strengthen the technology sector (XLK) relative to the S&P 500.  The XLK has been very strong on a relative basis since the middle of 2013 and just recently that relative strength reappeared.  Check out the longer-term absolute performance of the XLK and how it's performed relative to the S&P 500: From the price low in the summer of 2011, the XLK has been performing very well.  But it didn't began outperforming the S&P 500 until July 2013 and that relative Read More 

ChartWatchers

When Bad News is...Bad News

by John Hopkins

The stock market can be quite mystifying. Depending on the mood of the market, good news can be interpreted as bad news, bad news can be seen as good news and every once in a while good news and bad news are seen just as described. It's one of those things that can throw traders for a loop and add to the challenges of trading. This Friday we saw a very weak jobs report which on one hand could be seen as good news since it now keeps the Fed from raising interest rates in June and possibly July. But, based upon the market reaction, you can see that traders were disappointed in the weak jobs Read More 

ChartWatchers

Employment Miss Triggers Breakout in the Utilities SPDR

by Arthur Hill

Even though the Utilities SPDR (XLU) has been underperforming SPY since February, it sports the strongest chart of the nine sector SPDRs. How can that be? XLU is the only sector to hit a 52-week high this week. The sector cannot be that weak when it is trading at a 52-week high. The weekly chart below shows XLU breaking out in January and surging over 20%. After becoming a bit overbought in March, the ETF formed a triangle consolidation in April-May and then broke out with a surge last week.  Utilities are benefitting from the plunge in the 10-YR Read More 

ChartWatchers

Short-Term Indicators Bearish But Intermediate-Term Indicators Bullish

by Erin Swenlin

The S&P 500 hit overhead resistance at the April high and has stalled. If you look at the 10-minute bar chart for the past 10 days, you can see that price has been consolidating for over a week and has failed to overcome resistance. As this consolidation started, our short-term indicators turned bearish. A climactic buying initiation impulse arrived on the ultra-short-term (hours to days timeframe) indicator chart. I define buying initiation impulses as high positive spikes that arrive during a decline. After that, climactic readings continued but they began to Read More 

ChartWatchers

The Discounters Go To The Top Performers Listing

by Greg Schnell

Walmart, Dollar General, and Dollar Tree are all in the top performance rankings currently. Let's look at the charts. Starting with Dollar Tree (DLTR), We can see it just gapped to new highs after consolidating for a year, and this jump was well above the previous resistance shown with the blue line. The volume was strong on the breakout and the MACD has just turned up. Dollar Tree is in the Specialty Retailers. The next is Dollar General (DG). It continues to climb, quarter after quarter. Walmart (WMT) is another low price Read More