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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 Gold Rush Is Likely Over

by Tom Bowley

Gold ($GOLD) performs its best in a falling U.S. Dollar ($USD) environment.  There is a solid inverse relationship between the direction of GOLD and the direction of the USD that has existed for decades.  The following chart illustrates this relationship from 2001 to 2010: "Gold thrives when the dollar dives."  Now let's move on to current reality.  The U.S. Dollar has been in an uptrend since 2011 and I'd let the chart tell us when this uptrend is over.  One major factor in the dollar direction is the relationship between our treasury yields and Read More 

ChartWatchers

Materials (XLB) Are Failing To Break Resistance And Lose Relative Strength

by Julius de Kempenaer

The Materials sector, XLB, is testing overhead resistance around $56. This is the level where lows have been formed in 2017 and 2018 as well as two important highs at the end of 2018. For the time being, the attempt to break is failing, and this is visible on both the daily and the weekly charts. The relative strength for XLB against SPY is in a solid downtrend since the start of 2018, and without a break higher on the price chart, it is hard to see how this can improve at short notice. A Relative Rotation Graph can help to put things into perspective and Read More 

ChartWatchers

S&P 500 Clears the 200-day. Should we Take the Bait?

by Arthur Hill

We are all well aware of the S&P 500 and the 200-day moving average, but how well does this moving average work for broad market timing? Pretty well, it turns out, but only on the long side. I put the 200-day moving average to the test for the S&P 500 and other indexes in "On Trend" on February 21st (Youtube link here). In a nutshell, I found that closes above/below the 200-day work well overall, but a second moving average is needed to smooth closing prices and reduce whipsaws. While there is no such thing as the perfect setting, I settled on the 20-day SMA and 200-day SMA combo Read More 

ChartWatchers

Major Stock Indexes Continue to Test Overhead Resistance Near Their November Highs

by John Murphy

Editor's Note: This article was originally published in John Murphy's Market Message on Friday, March 1st at 11:55am ET. After having one of the strongest starts to a new year in history, major stock indexes find themselves testing yet another potential overhead resistance barrier. And they're doing so while in an over-extended technical condition. But they've been looking over-extended for most of the past month. Chart 1 shows the Dow Industrials testing their early November intra-day high at 26,300 (first red circle). A decisive close above that previous peak would clear the way for a Read More 

ChartWatchers

Mid- and Small-Cap Relative Performance Matters! Don't Miss These Crossovers!

by Erin Swenlin

While comparing the relative performance of the OEX, IJH and IWM to the SPX, I found an attention flag. The market is very overbought, with momentum indicators rolling over in overbought territory. The same thing goes for all the sectors. A CandleGlance of the sector SPDRs and SPX are all in agreement concerning the PMOs decelerating and rounding into tops. The CandleGlance below strongly suggests a market top. Bright spots? Technology and Utilities have PMOs that are still somewhat rising. Below is the chart you need to Read More 

ChartWatchers

A Treasure Chest Awaits You

by John Hopkins

SO MANY stocks that recently reported earnings beat expectations and gapped up sharply on very strong volume after their results were released. Those stocks include OLED, TTD, W and PANW, among others. In fact, take a look at the chart below on TTD, which reported its earnings before the bell on February 22, and you'll get a snapshot of what a lot of stocks that beat expectations looked like. Just take a look at that powerful gap up on massive volume, which occurred when traders heard about the company's numbers; it climbed 33% from the prior day's close to the high of the Read More 

ChartWatchers

Energy Is Up To Bat

by Greg Schnell

One of the hurdles to being a great market analyst is understanding the shifting sands of the stock market without an end point. In a baseball game, momentum may swing to and fro, but the game has an ending, based on innings and score, that defines when the game is over. The stock market, by contrast, wakes up renewed every day with new clues and no predefined terminus as to where momentum is going. Healthcare (orange) continues to be a below-average sector in the market since the 2018 Santa Claus low. The defensive sectors are on the right-hand side. Consumer Staples Read More 

ChartWatchers

The Secret Combination For Solid Reward To Risk Trades

by John Hopkins

Well, it's really not a secret, but it's our secret at EarningsBeats.com.  Our mantra is "Better Timing.  Better Trades." and, for us, that means finding the best stocks, identifying key price and moving average support and then adding..an extra helping of patience.  Many of the stocks on our Strong Earnings ChartList never hit key support and, therefore, are not solid trades despite the fact they may go higher, even much higher in some cases.  To be successful traders, we must be disciplined in managing risk. Read More 

ChartWatchers

Here's How Relative Strength Will Help Your Trading Right Now

by Tom Bowley

Understanding relative strength is extremely important in outperforming the benchmark S&P 500.  As a sector begins to outperform, it tells us that money is rotating towards that particular sector.  One way to visualize this is to look at an RRG chart.  It will only take one glance to quickly identify what's working RIGHT NOW and what is not: I have highlighted consumer discretionary (XLY) on this chart because it's the only sector with "RS-Momentum" and "RS-Ratio" above 100 readings.  That places it in the leading quadrant and tells us that we need to beware of Read More 

ChartWatchers

Checking The NIFTY 50 Universe On RRG Results In A Nice Setup For INFRATEL.IN

by Julius de Kempenaer

With more and more eyeballs looking at the Indian stock market and data for individual stocks and sectors becoming available on Stockcharts.com I started to keep an eye on developments in that market via Relative Rotation Graphs. To make it easier (for you but also myself), the NIFTY 50 Index is added as a group to the drop-down selection box. This universe holds all the members of the NIFTY 50 index and uses that index, $NIFTY, as the benchmark. Going forward we are planning to add pre-defined groups for Indian sectors as well as groups holding Read More 

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