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About this blog: is our free newsletter for individuals interested in technical trading and chart analysis. It is sent out twice a month via email. This blog contains early-access, preview versions of the articles that later appear in the official newsletter.

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ChartWatchers

The Financials Sentiment Indicators Suggest This Might Need More Time

by Greg Schnell

It looks like another tough month for the markets as year-end approaches. The index swings are getting increasingly aggressive and it feels like nearly every sector is getting yanked around. While there are lots of reasons to be bullish based on some of the "oversold" sentiment indicators, other reasons suggest a more worrisome stance. In the chart below, the top panel shows the KBE Bank ETF, which has sold off by 25%. The dip isn't quite as big (in percentage terms) as the big dips of 2011 (42%) and 2016 (28%) were.  Looking at the Financials Bullish Read More 

ChartWatchers

PMO Analysis - Wrong Direction and Not Oversold Enough

by Erin Swenlin

The Price Momentum Oscillator (PMO) is a great measure of acceleration/deceleration of price for individual entities. Combining each component's PMO readings within an index is especially advantageous in allowing us to understand how overbought or oversold it is in three timeframes. Although readings are oversold, they are still declining. This suggests that prices within the SPX, OEX and NDX are vulnerable to more downside price action. Let's review each of the panes below price. The first is the short-term indicator, which measures whether a PMO is rising. For reference, you Read More 

ChartWatchers

Want To Know The Difference Between A Correction And A Bear Market?

by Tom Bowley

Not a whole lot. I guess there are three primary differences.  First, there's the percentage drop as corrections are generally considered to see a drop of less than 20%, while bear markets tend to see declines well in excess of 20%.  Second, a bear market tends to last longer than a correction as the latter is nothing more than a basing period (that can still be extremely emotional) during a bull market.  Corrections are actually quite constructive for a longer-term rally.  Finally, there's a much stronger likelihood of an economic recession during a bear Read More 

ChartWatchers

The Yield Curve And The Business Cycle

by Julius de Kempenaer

The "Yield Curve" is a term often used in finance and refers to the relationship between (government) bonds with various maturities. The "Normal" relationship between the yield on various maturities is that the longer you lend money to someone. In this case the US government, the more "yield" you require. Similar to your mortgage, a fixed rate for five years is cheaper than a fixed rate for ten years or longer.  There are a few ways to look at yield curve relationships. 10-yr Minus 2-yr Yield Read More 

ChartWatchers

Consider This New Year's Stock Market Resolution And Change Your Financial Future

by John Hopkins

First, I'd like to wish everyone a Merry Christmas and a Happy New Year!   2018 has been a wild ride with volatility returning to extreme levels.  Unfortunately, 2019 looks like it will get even worse.  I believe we're in a bear market and, at EarningsBeats.com, we've already made preparations for it. A bear market doesn't have to mean losses in your portfolio.  You have options.  Sitting in cash increases your buying power when an ultimate bottom forms.  Trust me, being in cash while the stock market falls is the second best thing to making money!  We Read More 

ChartWatchers

Support Levels in Downtrends? Fuggedaboutit!

by Arthur Hill

As obvious as it seems, lower lows and lower highs are the order of the day in a downtrend. Thus, prices are expected to break prior lows and continue lower when the trend is down. Taking this downtrend concept one step further, one could also assume that support levels within downtrends are highly questionable and offer false hope. After all, lower lows are the norm, not the exception. Our first job as chartists is to identify the bigger trend at work. Once trend direction is established, we can then direct our focus and set our trading bias. I try to focus on resistance, bearish setups Read More 

ChartWatchers

Russell 2000 Small Cap Index and the Dow Transports Fall to 52-Week Lows

by John Murphy

Editor's Note: This article was originally published in John Murphy's Market Message on Friday, December 14th at 2:32pm ET. Two of the earliest warning signs since October that the stock market was in trouble was the fact that economically-sensitive stock groups like small caps and transports were leading the market lower. And they're doing that again today. Chart 4 shows the Russell 2000 Small Cap Index undercutting its February intra-day low today to put it at a new 52-week low. Chart 5 shows the Dow Transports doing the same. Weakness in those two groups is a negative warning sign for Read More 

ChartWatchers

Combining Strong Technicals And Fundamentals To Wildly Outperform The S&P 500

by Tom Bowley

Everybody wants the secret formula.  You know, the one where you never lose money.  Well, I haven't found THAT one yet, but trading companies that have recently beaten Wall Street revenue and EPS estimates is a fairly solid runner-up strategy.  A company that produces results in excess of analysts' expectations often has a management team trusted by Wall Street.  Before I discuss the best of the best, let me remind you of an article I wrote in my Trading Places blog on July 27, 2018.  It was titled "Key S&P 500 Support To Watch And Why I Wouldn't TOUCH Read More 

ChartWatchers

Healthcare Sector Bullish in All Three Timeframes

by Erin Swenlin

In my Thursday article in the DecisionPoint blog, I discussed the new PMO BUY signals on the DP Scoreboards, finishing off the article with a chart of the Healthcare Sector ETF (XLV) after I received a new Intermediate-Term Trend Model BUY signal (a positive 20/50-EMA crossover on the daily chart). I decided to research further because today's daily chart for XLV looked particularly bullish. I thus wasn't completely surprised to see healthy (pun not intended) weekly and monthly charts. This reminds me very much of the set-ups I've written about in past articles on the Natural Gas Read More 

ChartWatchers

Multiple Big Name Pharma Stocks Help Remedy The Pain

by Greg Schnell

Pharmaceutical stocks were a standout in November. The big global names had an exceptional month. While they are categorized as defensive stocks, these heavyweights have very powerful biotechnology investments. The pharmaceutical stocks listed below all hit new highs within November. While the $SPX was up about 2% for the month, all of lifting to get positive for the month happened over the last three to five days. The stocks listed below have way more exciting charts than the $SPX! The biggest loser on this list is Amarin but one look at the chart tells an entirely Read More 

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