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March 2017

ChartWatchers

Monthly PMO BUY Signal for Nasdaq 100

by Erin Swenlin

Patience was rewarded today as the Long-Term Price Momentum Oscillator (PMO) confirmed a BUY signal that had been pending most of the month. We don't log new monthly PMO signals until the chart goes "final" on the last trading day of the month. Similarly, we don't log new weekly PMO signals until the chart goes final on the last trading day of the week. Try not to get too confused. The Trend Model signals on the top row of the Scoreboards are all found on the daily chart, so they are logged as soon as the EMA crossover occurs. Short-Term Trend Model (STTM) Read More 

ChartWatchers

Finding New Highs and Measuring Trend Strength with Stochastics

by Arthur Hill

The Stochastic Oscillator is best known as a momentum indicator, but a careful look at the formula reveals that it can also be used to measure trend strength. As noted in a previous article on MACD, it is imperative that chartists fully understand an indicator to get the most out of it. The Stochastic Oscillator is a simple indicator that is really easy to understand. This article will start with a basic explanation and a few formula examples to explain the mechanics of the indicator. I will then show how it can be used to measure trend direction and strength over different Read More 

ChartWatchers

Apparel Retailers Printing Bullish Inverse Head & Shoulders Pattern

by Tom Bowley

Over the past year, the Dow Jones U.S. Apparel Retailers Index ($DJUSRA) has been one of only four industry groups in the consumer discretionary space that has posted a loss.  And over the past three months the DJUSRA is the worst performing area of consumer discretionary.  But keep in mind that March is the best calendar month of the year for apparel retail stocks historically and April is solid as well.  From a longer-term perspective, there's a bullish upsloping inverse head & shoulders pattern in play so I'm not ready to write off this group.  Check Read More 

ChartWatchers

All-World Index Hits New Record

by John Murphy

Chart 1 shows the FTSE All-World Stock Index ($FAW) trading at a new record high. The FAW includes stocks from 47 developed and emerging markets. It just recently cleared its 2015 high which resumed its major uptrend. That's a positive sign because it shows that the stock market rally is global in scope. The FAW, however, is heavily influenced by the U.S. market which is also at record highs. A better way to judge the performance of foreign stocks it to look at global stock indexes that don't include the U.S. Foreign stocks are on the rise as well. Chart 2 shows the Vanguard FTSE Read More 

ChartWatchers

Reward to Risk Calculation a Must

by John Hopkins

As part of our service at EarningsBeats.com we send trade alerts to our members on stocks that beat earnings expectations. But before we notify members of any trade candidates we look closely at the "Reward to Risk' ratio as we want to make sure it is favorable before we pull the trigger. The basic concept is this. We only want to get involved in trades that have much more upside than downside potential. At a bare minimum it needs to be 2 to 1 but 3 to 1 and greater is even better. As an example, we issued a trade alert to members last week on ARNC. We had two entry levels, both that Read More 

ChartWatchers

Kickin' It Up Globally

by Greg Schnell

In my Chartwatchers article for March 4th, I was focused on some Country Indexes like Germany's $DAX and India's $BSE. The commentary revolved around watching these markets for potential breakouts. You can follow this link to check it out. 5 Foreign Markets Are At Must Watch Levels. There was a big push in overseas markets on the back of the Fed meeting and the following day. Rather than show the foreign markets, it might be better to point to some ETF's that are investable here. The iShares Germany ETF (EWG) is pushing higher this week and looks to be breaking out of Read More 

ChartWatchers

Ignoring Signals is the First Step to Taking Signals - How Well do you Know MACD?

by Arthur Hill

 Two Indicators in One Indicators generate lots of signals and many of these signals are just noise. It is imperative that chartists understand how their indicators work and exactly what these indicators are saying. Understanding the ins and outs of an indicator will help chartists determine which signals to take seriously and which signals to ignore. Today we will look at MACD, one of the most popular momentum indicators.  MACD, which stands for moving average convergence divergence, measures the convergence and divergence of two exponential moving Read More 

ChartWatchers

PMO Scan from 3-17-2017 DP Webinar - Spotlight on KapStone Paper (KS)

by Erin Swenlin

I am asked constantly about how to use the Price Momentum Oscillator (PMO) and Trend Models in a scan. These two ingredients combine into a great tandem for the scan engine. I'll give you a reprint of the scan and analyze a chart I found in it today. First, here is the scan with explanations commented in for you: // Determine the universe you want to scan: [type = stock] AND [Daily SMA(20,Daily Volume) > 50000] and [country = US] // PMO has been rising for three days: AND[today's PMO Read More 

ChartWatchers

Two-Year Treasury Yield Reaches Seven-Year High, Dollar Turns Up

by John Murphy

Chart 1 shows the 2-Year Treasury yield climbing above 1.30% on Thursday, for the first time in seven years. That shorter term yield is more sensitive to the potential for a rate hike than longer-range maturities. That suggests that fixed income traders are taking expectations for a March rate hike by the Fed more seriously. Fed fund futures Wednesday placed the odds for a March hike near 66%. That suggests that bond yields in general are probably headed higher as well. That's also giving a big boost to the U.S. dollar. Chart 2 shows the U.S. Dollar Index ETF (UUP) climbing to the highest Read More 

ChartWatchers

5 Foreign Markets Are At Must Watch Levels

by Greg Schnell

The USA has been a bit of an island in terms of the global markets. It continues to push above previous all-time-highs and usually leads global markets higher. This week is an interesting week as Germany, India, Canada, and Australia are all trying to break through to new highs. Notice the spike in the German market on the last high in 2015. It rolled over the next week and it has taken two years to get back there. India in the lower panel is trying to close at new 52-week highs. India is about a 1100 points from all time highs. I like to follow Read More 

ChartWatchers

Treasury Yields Rising As Home Construction Breaks To 10 Year High

by Tom Bowley

The FOMC will be meeting to discuss a potential rate hike in less than two weeks.  A hike would continue the hawkish tone that began when the FOMC increased interest rates in December 2015 for the first time in nine years.  It was about six months later that the 10 year treasury yield ($TNX) began its ascent after first printing a double bottom.  Check out this 10 year weekly chart: The TNX bottomed with relatively equal lows just beneath 1.40% in 2012 and 2016.  I believe the rate hike in 2015 signaled the end of descending treasury yields and that we're now in Read More 

ChartWatchers

Actual Price Action versus Relative Price Action

by Arthur Hill

The price relative tells us how a stock is performing relative to a market benchmark, such as the S&P 500. Even though this relative performance indicator is good for measuring relative momentum, it does not always tell the entire story. A stock can show weakness in relative momentum, but still have a bullish chart and a bullish setup worth taking. Let’s investigate further.  Chartists can measure relative performance by plotting a ratio of two symbols. This ratio plot is also known as the price relative or the relative strength comparative. The BA:SPY ratio shows us how Boeing Read More 

ChartWatchers

Chart Spotlight: Exxon-Mobil (XOM) Reveals Possibilities

by Erin Swenlin

During the DecisionPoint Report webinars I've added a "chart spotlight". For those of you who were members of the original DecisionPoint website, you probably remember Carl's "Chart Spotlight" on Fridays. Viewers and readers offer up some symbol suggestions via Twitter (@_DecisionPoint) and I determine, based on the chart, whether there is useful information to glean using our trusty Price Momentum Oscillator (PMO) and Trend Models. Last Wednesday a viewer suggested I look at Exxon-Mobil (XOM). It was a great suggestion! Lots of information to be gained looking at the daily and weekly Read More 

ChartWatchers

Patience in an Overbought Market

by John Hopkins

The rise in the major indexes since the election has been stunning. The S&P alone is up over 15% in just over 3 months. That would be a terrific year by any measure. The Dow was up 18% since the election at its all time high on Wednesday, And the NASDAQ was up 17% during the same period when it hit its all time high on Wednesday. In looking at the Dow I am seeing things that I haven't seen since 1987, 2000 and 2007. In other words, overbought technicals that come along rarely. Just look at the chart below and you will see that at its high last week the Dow had stochastics of close to Read More