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February 2017

ChartWatchers

75 Point Boxes On The $SPX

by Greg Schnell

The $SPX has had a nice ladder effect going on recently. Much like the origins of technical analysis found in the early days, the market tends to move forward in ranges. These areas have been quite obvious recently. The range been support levels appears to be about 75 points on the $SPX. Here is a copy of the chart I showed on The Commodities Countdown Webinar 2017-02-16. While all the world is focused on the tremendous bull run, there is a pick up in the defensive sector charts and they have started to join the rally. While this is not bearish at all, it Read More 

ChartWatchers

Swenlin Trading Oscillators Very Bearish

by Erin Swenlin

The market has been experiencing an almost vertical rally over the past few weeks, but it has cooled over the past two days. The steep rising trend pushed our short-term Swenlin Trading Oscillators (STOs) into highly overbought territory. With Thursday and Friday's cooling off period, they have peaked. This is a very bearish configuration. I've highlighted overbought extremes for the STOs in blue on the SPX chart below. You can see how the readings shot higher during the rally and have topped. I've drawn vertical lines showing that most of these overbought peaks do Read More 

ChartWatchers

Retail Stocks Remain Very Attractive And Here Are A Few To Consider

by Tom Bowley

About a month ago, I wrote a ChartWatchers article detailing the bullish historical tendencies of retailers during the months of February, March and April.  In particular, apparel retailers ($DJUSRA) have shown tremendous bullishness during the months of February, March and April.  In addition, the DJUSRA was approaching a key price support level.  As it turns out, that price support held and stocks in this group are beginning to trend higher as they typically do this time of year.  First, let's check out the updated chart: The XRT remains a great way to Read More 

ChartWatchers

Healthcare SPDR Turns Up, Biotechs and Pharmaceutical ETFS Show Improvement

by John Murphy

In case you haven't noticed, the Health Care SPDR (XLV) has taken a bullish turn. Chart 1 shows the XLV breaking out of a bullish "ascending triangle" that I described in my February 4 message. At the same time, the XLV/SPX ratio (top of chart) appears to be bottoming. And while biotech and pharmaceutical stocks have improved, healthcare leadership is still coming from other places. That earlier message showed three healthcare ETFs that are leading the healthcare sector higher. Two of those three have since hit new records. The two parts of the healthcare sector that get the most Read More 

ChartWatchers

Trading Stocks in a Stretched Market

by John Hopkins

I made my case to EarningsBeats members this past Wednesday just before we started to see a bit of selling. Here are the highlights: 1-The VIX is up by almost 9% today as it tests its 50 day moving average from the downside even though the market is higher. This is troubling to me as I am seeing fear picking up in spite of today's buying. 2-All of the major indexes are extremely overbought. The NASDAQ has stochastics close to 100 and a RSI nearing 80. The Dow and S&P are close to those numbers. All represent sell signals. 3-The equity only put/call ratio is at its lowest level since Read More 

ChartWatchers

Rethinking Support and Resistance for Indexes and ETFs

by Arthur Hill

Just like potato salad in the fridge, support and resistance levels for the S&P 500 have a shelf life and become stale over time. The value of the S&P 500 is based on the price of its individual component stocks. Support and resistance levels for the index loose their importance over time because component stocks and weightings change on a regular basis. The further the look back period, the bigger the transformation in this key index. The S&P 500 in 2017 is not the same as the S&P 500 in 2010, and certainly not the same as the S&P 500 in 1999. Chartists Read More 

ChartWatchers

Using Support, Resistance And Trendlines To Better Your Trading

by Tom Bowley

Exercising patience and discipline to enter trades at appropriate reward vs. risk levels is obviously very important to any trader's success, but planning trades before they set up is just as important.  Let me give you a few examples.  First, let's take a look at Cullen Frost Bankers (CFR): Trendlines are only as strong as the number of price points that are connected.  You can always connect two price points and highlight a trendline.  But those cannot be relied upon to hold as support.  As you test a trendline more and more times, that trendline becomes very Read More 

ChartWatchers

Dow and S&P 500 End Week On a Strong Note

by John Murphy

What started off as a soft week for stocks ended on a strong note. Friday's gain was enough to keep stock indexes basically flat for the entire week. But there was some improvement on the charts. The daily bars in Chart 1 show the Dow Industrials jumping 186 points (0.94%) on Friday. That was more than enough to keep it well above its 50-day average and chart support along its January low. Also encouraging was its 14-day RSI line (above chart) bouncing off the 50 level for the second time since mid-January. That's usually a sign of market that's consolidating rather than correcting. The Read More 

ChartWatchers

New Highs Expand in the Healthcare Sector

by Arthur Hill

New highs are a sign of underlying strength and chartists can measure this indicator using High-Low Percent. In particular, I like to rank the nine sectors by High-Low Percent or a moving average of High-Low Percent. Note that High-Low Percent equals new highs less new lows divided by total issues. Chartists looking for the weekly leaders in High-Low Percent can look at the 5-day SMA. The table below shows the technology, healthcare and industrials sectors with readings above +6%. As a percentage of component stocks, these three sectors saw the most new highs last week. Consumer Read More 

ChartWatchers

Stocks Relative to Their 52-Week High-Low - SPX v. NDX

by Erin Swenlin

Today during my DecisionPoint Report webinar, I pulled the intermediate-term indicator chart of SPX Stocks Relative to Their 52-Week Hi-Lo to show my viewers the divergences that are all over this chart. After I finished the webinar and reviewed the chart again, I decided it would be great to see what the same chart for the NDX looked like. It's a tale of two very different indexes right now. What is present in both charts are divergences and confirmations that are quite reliable. The red arrows on the SPX chart below represent negative/bearish divergences. You can see how price tops are Read More 

ChartWatchers

BioTechs Are In The Starters Blocks. Will The Run Start Soon?

by Greg Schnell

The Biotech arena has been a "House Of Pain" for investors while the companies continue to deliver all sorts of pain remedies to people worldwide. But the pattern shaping up on the Biotech ETF's suggests they are one to watch closely. Even the recent tough talking banter couldn't push the Biotechs down. This is the SPDR Biotech ETF (XBI). Looking at two other Biotech ETF's they also look good. All of these are trying to break big downtrends and if they do, this is an excellent place to get onboard an area of the market with huge upside potential Read More 

ChartWatchers

No Chasing Allowed

by John Hopkins

At EarningsBeats we are steadfast in avoiding being involved in stocks into a company's earning's report because one can never tell how the market will respond to a company's numbers. Case in point is Amazon who reported their numbers last week. Just look at the chart below and you will see that the stock was poised to break out the day earnings were reported which was February 2. However when the market opened for business the next day the stock fell sharply. On the other end of the spectrum Apple reported blowout earnings and was rewarded handsomely as you can see below. But if you Read More