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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

Railroads Are Rolling

by Greg Schnell

Railroads are back in an uptrend after the fourth-quarter correction. I like to keep track of the railroads and their relative strength compared to the $SPX. Most recently, the relative strength panel pulled down to the trend line and bounced off again; a nice bullish setup. Moving to the individual railroads, Kansas City Southern had a monster week. Price soared almost 8%! This follows an already big week last week. Since the December lows, the stock has gone up a massive 22%. The SCTR shows that KSU is moving into the top quadrant for price Read More 

ChartWatchers

Earnings Season Kicks into High Gear - Be Prepared to Profit

by John Hopkins

Earnings season began in earnest last week, with major financial companies being rewarded and helping to lead the market higher. It's one of four time periods during the year when publicly traded companies share their earnings results so that investors can get a sense of the financial health of each company. The response to each earnings report can be quite different. For example, Goldman Sachs reported their numbers last week, with the stock soaring 10% as traders cheered their results. However, for every company that beats expectations and is rewarded handsomely, there's another company Read More 

ChartWatchers

Utilities Sector (XLU) Lights Up a New PMO BUY Signal

by Erin Swenlin

Sector rotation continues to favor the defensive sectors of Health Care, Consumer Staples, Real Estate and Utilities. Some of the more aggressive sectors are perking up now, with Financials actually making the biggest gain of the past month. Utilities in that same timeframe haven't done so much, but, in the short term, they are starting to look bullish. Here's the Sector Summary for the past month. Financials are beginning to lead, which is positive, but technology could use a boost. In the past year, the clear "winners" have been the Read More 

ChartWatchers

2019 Stock Market Forecast And My Report Card For 2018 Forecast

by Tom Bowley

Before I look ahead to what we might expect in 2019, let me rewind for a bit and check out last year's forecast.  Here's a recap, summarizing a few of my "expectations".  I've graded my predictions with a slight curve.  Feel free to agree or disagree.  :-)  (1) Reviewed both renewable energy ($DWCREE) and home construction ($DJUSHB), the two best industry performers in 2017.  I evaluated both heading into 2018, but preferred the DWCREE and warned about losing the rising 20 week EMAs as that could signal a trend reversal.  I mentioned that Read More 

ChartWatchers

Wringing In The New Year

by Greg Schnell

With a wretched finish for the fourth quarter of 2018, I found many colleagues and friends weren't so much ringing in the new year as they were wringing it in. With almost every professionally-managed portfolio holding meaningful levels of the FAANG stocks, there was a dark shadow cast across the money managers for ignoring the risks of declining momentum. With major portfolio dips, everyone is wondering what to do next. The markets already went down 20% from the highs, so it could be expected that a rally will start the year. It is the question of how the year 2019 is going to Read More 

ChartWatchers

EARNINGS: S&P 500 P/E Overvalued, But Back In Normal Range

by Carl Swenlin

S&P 500 earnings for 2018 Q3 have been finalized. The following chart shows us the normal value range of the S&P 500 Index. It shows us where the S&P 500 would have to be in order to have an overvalued P/E of 20 (red line); fairly valued P/E of 15 (blue line), or an undervalued P/E of 10 (green line). There are three hash marks on the right side of the chart to show where the range markers are projected be at the end of 2019 Q3. Last year price was well above the traditional value range; however, the recent price decline has lowered the P/E to 19, and the market is back within Read More 

ChartWatchers

Understanding and Adapting to the Broad Market Environment

by Arthur Hill

The broad market environment is perhaps the single most important factor to consider when selecting a trading or investing strategy for stocks. As with the weather, the broad market environment is subject to change and we need to adapt to current conditions. We should take extra precautions when it is wet and stormy and wear our Bermuda shorts when it is  dry and sunny. Ah, the sun. Similarly, we should take extra precautions when the market is trending lower with high volatility and take more risk when the market is trending higher with low volatility. Let's look at the shifting Read More 

ChartWatchers

Use Relative Rotation Graphs To Get A Handle On International Markets

by Julius de Kempenaer

With the US stock market declining investors (may) need to look for alternatives in order to preserve capital. Sure enough, there are good opportunities in the US with bonds, IEF is doing very well, and cash is a very viable alternative if you do not "need" to be invested. If you are in a position where you do need to be invested in stocks or you want to keep an allocation to stocks in your portfolio, even if it is an underweight position, you might need to look outside the US for alternatives. The Relative Rotation Read More 

ChartWatchers

Earning Misses - Profiting from Weakness

by John Hopkins

Most of you who read my blog know the name of our service is EarningsBeats.com. The name makes sense since, for many years during the bull market, we've zeroed in on those companies that beat earnings expectations that could be prime long candidates. Fast forward to today and we've got a new category to focus on; companies that miss earnings expectations and could be prime short candidates. To give you just one example, take a look at the chart below on XPO, a company that reported results in December, fell sharply on huge volume and has made its way up close to key technical resistance Read More 

ChartWatchers

Apple Plunges on Sales Warning

by John Murphy

Editor's Note: This article was originally published in John Murphy's Market Message on Thursday, January 3rd at 1:59pm ET. The price of Apple is plunging today after issuing a sales warning for the first quarter. The stock was already in trouble before that announcement. The weekly bars in Chart 1 show Apple (AAPL) falling today to the lowest level since the middle of 2017. An analyst on CNBC today sounded confident that the stock would do better than the rest of the market "on a relative basis". So far, that's not working out very well. The red line in the upper box is a ratio of Apple Read More 

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