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August 2016

ChartWatchers

Where is Everybody? Low Volume Continues to Plague the Markets

by Chip Anderson

Hello Fellow ChartWatchers! Where is everybody?  Things look pretty darn good on the weekly index charts: Stocks are at or near new all-time highs. The Tech sector is showing signs of life. Energy stocks are roaring up the SCTR rankings The "New Highs-New Lows Line" is moving higher (and still has room to grow) Lots of well-known stocks are in well-established uptrends Etc., etc., etc. So why is weekly volume so, so, so anemic?  New Highs are usually greeted with volume spikes.  Last week it was like all the Read More 

ChartWatchers

Rising Crude Oil Prices May Start Putting Upward Pressure on Bond Yields

by John Murphy

In more normal times, the direction of commodity prices, and oil in particular, had an impact of the direction of bond yields. That because oil is viewed as an early barometer of inflationary trends. A falling oil price (along with other commodities) was disinflationary which boosted bond prices and lowered bond yields. Rising oil had the opposite effect -- falling bond prices and rising yields. Rising oil prices often prompted the Fed to raise rates to combat the threat of inflation. That's not necessarily the case now, but some semblance of those old relationships may still hold. Chart 1 Read More 

ChartWatchers

With Earnings Season Over, What's Next?

by John Hopkins

The latest earnings season has come and gone. Now what? It's a good question, especially with the market in stall mode, with the S&P barely budging in over a month. This stagnation comes after investors seemed to have applauded the majority of earnings reports telling me that the strong numbers had already been anticipated. The good news for the bulls in this month long consolidation, which included a new record high on all of the major indexes, also included a few tests of the 20 day moving average on the S&P which held twice. On the other hand, the bears will argue that the Read More 

ChartWatchers

Rebound In Crude Oil Prices Trigger Big Gains In Energy

by Tom Bowley

The bottoming formation in crude oil ($WTIC) continues to take shape and the beneficiary clearly has been the energy ETF (XLE).  Since dipping below $40 per barrel to begin August, the WTIC has rallied more than 20% in the past three weeks and is now nearing $50 per barrel.  A break above $50-$52 per barrel would be technically significant as it would confirm a bottoming (and quite symmetrical) reverse head & shoulder pattern with a measurement above $70 per barrel.  Check out the pattern: The pattern does require a breakout for confirmation, but the Read More 

ChartWatchers

Three Natural Gas Plays Flaring Up

by Greg Schnell

Long considered the ugly end of the energy business, the Natural Gas business is slowly starting to return. For those following the Commodities Countdown and Canadian Technician webinars, this will not be new. Three charts this week have really started to break away and look like a solid area for the 4th quarter. Encana (ECA) has really been moving and looks set to continue. This is as nice as it gets technically. Here is Devon Energy (DVN). This is a beautiful move so far. The SCTR continues to be a good clue. Lastly, here is Cheniere Energy (LNG). This is just Read More 

ChartWatchers

The Squeeze Play is on for the Gold and T-Bond ETFs

by Arthur Hill

The Gold SPDR (GLD) and the 20+ YR T-Bond ETF (TLT) are two of the best performing asset class ETFs this year and both remain in clear uptrends. GLD is up over 26% year-to-date and TLT is up around 16%. One would not expect bonds and gold to be leading at the same time. The indicator window shows the 65-day Correlation Coefficient (GLD,TLT) to confirm the positive relationship. Notice that gold and bonds have been positively correlated for most of the last ten months (since mid October). A positive correlation means they have tended to move in the same direction. It is strange to see this Read More 

ChartWatchers

NDX New PMO SELL Signal

by Erin Swenlin

The DecisionPoint Scoreboards have been quiet since the beginning of the month when we saw the OEX, SPX and Dow all switch to short-term Price Momentum Oscillator (PMO) SELL signals. The NDX which has been enjoying a steep rally, has stalled. In so doing, momentum switched negative and hence the new PMO SELL signal. The steep rising trend channel was compromised this week as price drifted slowly outside. I don't consider it a "breakdown" because price did "drift" through the rising bottoms trendline rather than a drop lower. Even though price is consolidating Read More 

ChartWatchers

Nasdaq Nears Record - Microsoft is Already There

by John Murphy

The Nasdaq Composite Index is on the verge of joining the Dow and S&P 500 in record territory. The first chart below shows the $COMPQ trading at the highest level in a year, and on the verge of clearing last July intra-day peak at 5232. The Nasdaq 100 (which includes the 100 largest non-financial stocks in the Nasdaq market) has already hit a new record, as has Technology SPDR (XLK). The Nasdaq and the technology sector are being led higher by big tech stocks that include Amazon.com, Alphabet (GOOGL), Cisco (CSCO), Facebook (FB) and Intel (INTC). The Nasdaq's biggest stock -- Read More 

ChartWatchers

Earnings Power Market Higher

by John Hopkins

The market has seen both the Dow and S&P hit record highs recently and now the NASDAQ wants to join the party. In fact the NASDAQ got to within just a few points of its all time high Friday, fueled by a very positive response to earnings in the tech sector, going to show that when everything is said and done the one things investors really care about is the bottom line. It hasn't hurt that Central banks across the globe have moved into economic stimulus mode, the latest being Japan and this past week the BOE which lowered rates and signaled further help could be coming down the road Read More 

ChartWatchers

Some Retail Stocks Stand Out

by Greg Schnell

Some of the retail stocks are performing well, but it is a mixed bag. TJX (TJX) continues to hit new highs, but last year's big winner L Brands (LB) is one of the worst. So from the church of what is working lately, we turn to the SCTR's to help rank the Consumer Cyclicals group. In general, the whole retail industry is still lagging. Very few are leading in terms of price performance, but some are working ok. TJX Co. (TJX) is one of the best retailers right now. We can see the price is breaking to new highs. The SCTR shows the stock price appreciation is stronger than 63% of large cap Read More 

ChartWatchers

On Conferences (and Why Ours is Better!)

by Chip Anderson

Hello Fellow ChartWatchers! So as I write this, I’m crammed into seat 18F on the red-eye back to Seattle.  I can barely type on my laptop thanks to the wonderful people all around me.  It’s not their fault, but I’m about to ask the flight attendant if I can crawl out on the wing so I can get this article written.  According to the flight tracker, things do not look promising: The good news is that I learned about several new technologies that will help us improve our website but - man - attending tech conferences can be a big, expensive pain! Read More 

ChartWatchers

Gaps and Flag Breakouts Dominate Finance Sector

by Arthur Hill

Before looking at some patterns and breakouts, let's first review the basic of the flag pattern. Flags are continuation patterns that depend on the prior move for a directional bias. Flags are bullish continuation patterns when the prior move was up and bearish continuation patterns when the prior move was down. A bullish flag can be flat or have a downward slope, while bearish flags can be flat or have an upward slope.  A variety of bullish flags formed in the finance sector over the last few weeks and big gaps on Friday triggered breakouts. First Read More