ChartWatchers Newsletter logo

December 2017

ChartWatchers

NASDAQ and Microsoft Hit New Records, Russell 2000 Ishares Bounce

by John Murphy

The Nasdaq finally joined the Dow and S&P 500 in record territory on Friday. Chart 1 shows the PowerShares QQQ exceeding its November peak at week's end, and in heavy trading. The QQQ is based on the Nasdaq 100 index which includes the 100 largest non-financial stocks. Most of them are in technology. One of the biggest contributors to that gain was Microsoft. Chart 2 shows Microsoft (MSFT) gaining more than 2% on Friday to reach a new record. It did so on the heaviest trading in two months. It's always encouraging to see all of the major stock indexes hitting new highs together. One Read More 

ChartWatchers

The Best Traders Have This One Common Trait And They Never Waver

by John Hopkins

This may sound way too easy, but successful traders manage risk.  They don't care about losing money on trades that don't work.  They exit those trades and put their capital to work in a better trade.  Many trading services will try to WOW you with a splashy headline like "50 winning trades in a row"!  While that would certainly be a recipe for trading success, it's simply not realistic and we all know it.  Ask anyone who's actively traded in the equities market and they'll tell you that you have to expect losing trades.  They happen to everyone.  The Read More 

ChartWatchers

Tis The Season To Look For Fresh Breakouts

by Greg Schnell

Some winners from this fall included the auto sector in September. They might not all rally, but it is nice when a whole industry group surges together. The Chartwatchers article on December 2nd, 2017 had metal miners highlighted and I continue to think that group of stocks looks to be building strength into 2018. More on that towards the bottom of this article. As year-end approaches, I like to look for stocks that were not on the radar in 2017 but as the end of the year arrives they find investor love. Recently some of the hated retail stocks have surged significantly Read More 

ChartWatchers

Here Are Five Solid Small Cap Trades And A Powerful ChartList For 2018

by Tom Bowley

Happy holidays!  I want to wish everyone a joyous holiday season and here's to a happy, healthy and prosperous 2018!  Thank you so much for all your support of StockCharts.com in 2017! To better understand the reasoning for the stocks selected below, you first need to understand that the December 16th through December 31st period has been unbelievably bullish for the small cap Russell 2000 since its inception in 1987.  Here are the Russell 2000's annualized returns for each calendar day from December 16th through December 31st over the past three decades: Read More 

ChartWatchers

Overbought - And Built to Stay That Way

by Arthur Hill

Overbought and oversold are funny terms. Well, actually, they are not that funny when you really think about it. Overbought is often overused in an uptrend and oversold is over used in a downtrend. Let's focus on overbought because that seems to be the term du jour right now. First, overbought is a sign of strength because strong buying pressure is required to push momentum oscillators into overbought territory. Second, we often see multiple "overbought" readings in a strong uptrend, and these readings can extend for weeks or even months. I could go on, but I think Greg Morris summed up Read More 

ChartWatchers

Is Santa Claus Really Coming to Town for Small Caps?

by Erin Swenlin

I haven't talked Small Caps in quite awhile and I think there are some interesting points that need to be made--good and bad. First, the technicals on the S&P 600 are not looking good at all. However, Tom Bowley, my co-host on MarketWatchers LIVE and fellow blogger showed us the seasonality of the small caps is very bullish for the end of December. So the question isWill Santa Claus deliver a rally in the small caps? My indicators are making the case that we won't see Santa for IJR (SP600 ETF) or he'll be running late. The daily chart looks Read More 

ChartWatchers

Here's The Only ChartList You'll Ever Need And The Five Keys To Trading Success

by John Hopkins

'Tis the season and I'd first like to wish everyone a happy holiday season.  To health, happiness and prosperity! Feel free to sing along. "We've made our (Chart)List  we've checked it twice but we won't buy stocks  at any ole price market makers will bring the price down" That's the tune we hum every day at EarningsBeats.com and it's how we post our impressive results day in and day out.  Here are the five principles that we live by: 1.  Do Your Homework Ok, well we'll do the homework for you.  It starts with Read More 

ChartWatchers

Energy Shares Are Bouncing on Optimism Over OPEC Agreement

by John Murphy

Energy shares are finally showing some bounce. The daily bars in the chart below shows the Energy Sector SPDR (XLE) climbing above its 50-day average today. The XLE is bouncing off chart support along its late October low and its 200-day moving average. Those are logical chart points for the XLE to start moving higher. [The 50-day average remains higher than its 200-day line which is also a positive sign]. The gray area (which plots a ratio of the XLE divided by the S&P 500) has been slipping over the last two months. But it's rising today with energy being one of the day's strongest Read More 

ChartWatchers

Here Are Two Stocks To Consider In December...And One To Avoid

by Tom Bowley

I love to combine bullish seasonality with strong or strengthening technical conditions.  As we move into December, it's important to realize that there has been no better month for the S&P 500 since 1950 than December, which has produced annualized returns of +19.51%.  Also, December has resulted in rising S&P 500 prices 50 of the last 67 years, easily the best such month of the year.  So we know that history is on our side to look for long trades. So which individual stocks also perform well in December and beyond?  Well, I examined all 500 Read More 

ChartWatchers

Metals - The Calm Before The Storm

by Greg Schnell

One of key principals of a global bull market is the major moves in the sectors as the market expands. As we head into 2018, there are a significant number of charts that suggest we could be on the platform for a significant move in commodities. The Commodities Countdown blog tries to show some of the major themes, including oil off the July lows. One of the major setups now is the metals. The chart of the steel ETF has been consolidating for months. Copper has had a great run this year, and with the love of electric vehicles (EV), looks set for many great years ahead. Along with copper Read More 

ChartWatchers

Financials and Industrials Lead New High Expansion

by Arthur Hill

Chartists can plot High-Low Percent for the nine sectors to identify areas of strength within the stock market. The chart below shows the High-Low Percent ranked by this week's highest value. The finance, industrials and consumer discretionary sectors stand out this week because their High-Low Percent indicators hit the highest levels of the year. High-Low Percent for the finance and industrials exceeded +50%. Assuming virtually no new lows this week, this suggests that more than 50% of the stocks in these sectors hit new highs. XLY High-Low% ($XLYHLP) exceeded 20% the last three days and Read More 

ChartWatchers

Energy ETFs Triggering Bullish Signals

by Erin Swenlin

The energy sector has been on a bit of a rollercoaster the three months, moving from deep lows in August to a new trading range of large percentage highs and lows. I'm starting to see signs that the trading range is going to be history as price now is butting up against overhead resistance at the top of the trading range. On XLE, the Energy SPDR, we had a hint that the rally that started at the beginning of September would continue on. The 20-EMA crossed above the 50-EMA which triggered an IT Trend Model BUY Signal. Back in October an all-important LT Trend Model BUY signal appeared Read More