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May 2017

ChartWatchers

Foreign Markets Retest The Highs

by Greg Schnell

With the big swing this week, some of the foreign markets are retesting breakouts. Below are just a few markets to watch in the next few weeks. Australia ($AORD) failed to hold the breakout to new highs and has now lost the 10 WMA. While losing the 10 WMA is not that big of a deal, the size of the downward stroke right after trying to break through previous highs suggests not a lot of support for the breakout. The 40 WMA is just below and the first test of the Moving Average is usually a bounce. The lower channel is around 5400 with the 40 WMA about halfway in the channel. Read More 

ChartWatchers

Rising European Currencies Are Pushing the Dollar Lower

by John Murphy

While stocks were rebounding last week, the dollar wasn't. Chart 1 shows the Power Shares Dollar Index ETF (UUP) falling again Friday to the lowest level since November. It may seem surprising to see the dollar continuing to drop with bond yields bouncing along with stocks. The dollar drop, however, may have more to do with improving European currencies. Chart 2 shows the Euro surging to the highest level since last October. Improving economic conditions in the eurozone (as reflected in strong stock prices), as well as an uptick in inflation, are supporting that currency. The Euro has the Read More 

ChartWatchers

Broad REIT ETFs Hit Interesting Junctures, but Hotel and Retail REITs Weigh

by Arthur Hill

The REIT iShares (IYR) and the Vanguard REIT ETF (VNQ) are at interesting junctures because they corrected within an uptrend. Even though both are at potential reversal zones, chartists should be careful because retail REITs and hotel REITs are weak spots within the REIT universe. The chart below shows IYR with an uptrend since November and a recent pullback to the rising 200-day EMA in May. The ETF held just above this EMA and firmed the last two weeks. It got a bounce on Thursday-Friday and a breakout at 79 would reverse the April-May pullback. The Read More 

ChartWatchers

Bearish Signals Continue to Mount

by Erin Swenlin

It was a rough finish to the week and it has shaken up the DecisionPoint Scoreboards. Additionally, the Intermediate-Term Trend Model (ITTM) generated a Neutral signal on the equal-weight Financials ETF (RYF) and a weekly Price Momentum Oscillator (PMO) SELL signal popped on the equal-weight Consumer Discretionary ETF (RCD). Believe it or not, these Scoreboards were completely green on May 11th (except the Dow IT PMO SELL). We began seeing signs of deterioration even before this week's short-term correction when the IT PMO signals on the SPX and OEX triggered a SELL signal on Read More 

ChartWatchers

When in Doubt, Sit it Out

by John Hopkins

Anyone who trades the market on a regular basis knows how important it is to use whatever tools are available to make important decisions. This includes using charts to determine the strength/weakness of a specific stock, sector or index, zeroing in on key price and technical support/resistance levels and getting a handle on the overall mood of the market. For me one of the key indicators I use to help me make decisions is the VIX, what many know as the market fear meter. To give you some historical perspective, the all time low on the VIX was near 9.40 in December, 2006, while the all Read More 

ChartWatchers

Are We Topping? Watch These Two Industry Groups

by Tom Bowley

We saw the first significant selling pressure in months last week, especially on Wednesday.  Financials (XLF) led the rout to the downside, but the sector did bounce back later in the week and, in the process, held key neckline price support within two key industry groups - banks ($DJUSBK) and life insurance companies ($DJUSIL).  Both of these groups do well in a rising interest rate environment so it'll be important to watch the 10 year treasury yield ($TNX) as well to see if the TNX can hold onto key yield support levels.  Here are the DJUSBK, DJUSIL and TNX, all Read More 

ChartWatchers

Financials Underperform After The Fed Meeting

by Greg Schnell

It seems that nothing is ever easy in the market, but following price action is really important as we know. Following the November 1-2, 2016 Federal Reserve meeting, Banks (Financials in general) went ballistic as it looked very probable that the Fed would raise rates at the December meeting. Coinciding with that was the election of President Donald Trump a week later. It is important to note that the rally in Financials started before the election and ended on the next Fed meeting December 14th shown in the chart below. The December Fed meeting, the January Fed meeting and the Read More 

ChartWatchers

Whipsaw Intermediate-Term PMO BUY Signals on SPX and OEX

by Erin Swenlin

 I had already figured out what I would write about in today's ChartWatchers article, but that was put on hold when I received a Technical Alert in my email box telling me that we had IT Price Momentum Oscillator (PMO) signal changes on both the S&P 500 and S&P 100.  These signals are generated on the weekly charts.  Now, looking at the DP Scoreboards below, there is a clear story being told. Major markets are bullish in all three timeframes. Of course, the Dow has the a "red arrow" SELL signal left. Let's see how the IT PMO BUY signals came about and look at Read More 

ChartWatchers

Create McClellan Oscillators for the Nine Sector SPDRs and the Gold Miners

by Arthur Hill

The McClellan Oscillator is a breadth indicator that Chartists can use to enhance their analysis of an index. StockCharts carries the McClellan Oscillator for dozens of broad market indexes, but not for the S&P sectors. There is no need to fret because StockCharts users can create the McClellan Oscillator using the AD Percent indicators and MACD. You can read more about the McClellan Oscillator in our ChartSchool.  We first need a base symbol, which can be AD Percent or AD Volume Percent. As an example, AD Percent equals advances less declines divided by total Read More 

ChartWatchers

Sector Rankings and Weightings Are Still Market Positive

by John Murphy

SECTOR LEADERSHIP One of the problems facing the current stock market is that some sectors have been rising, while others have suffered large losses. Since the start of the year, for example, technology has gained nearly 14% versus a 6.7% gain for the S&P 500. Energy stocks, however, have plunged -10% this year. Industrial metal miners have lost -6% as have telecom stocks. Obviously there's a tug of war going on within the market as a whole. The question is which side is winning. To determine that, it's not just enough to count how many sectors are rising (8) and how many are Read More 

ChartWatchers

Earnings Season Favors the Bulls

by John Hopkins

Recent headlines have focused on tax reform, health care reform, partisan bickering, the president's first 100 days. But in the background many companies have been coming up big when reporting earnings which is why the market has been so strong of late. While the bears have been hoping for a big pullback the bulls have gone about their business with the NASDAQ hitting an all time high while the Dow and S&P, though lagging, have remained within easy striking range of their respective all time highs. With strong earnings come high reward to risk trading opportunities as long as you are Read More