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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

Confirming Moving Average Signals in the S&P 500

by Arthur Hill

The S&P 500 is the most widely used benchmark for U.S. stocks and the 200-day SMA is the most widely used moving average. Together, chartists can use the S&P 500 and the 200-day SMA to determine the broad trend for the stock market. The S&P 500, however, does not tell the entire story. Note that the top 50 stocks (10% of the total) account for 50% of the index weightings. Chartists interested in the other 450 stocks can consider using the S&P 500 Equal-Weight Index ($SPXEW) to confirm signals in its big brother. As its name suggests, the S&P 500 Equal-Weight Index Read More 

ChartWatchers

Sticking With Companies That Report Strong Earnings

by John Hopkins

The market finally found its legs last week after the Fed signaled they might slow down their interest rate-raising campaign. In fact, after being technically wounded for some time, all of the major indexes closed back above their respective 20-day moving averages, with the Dow clearing its 200 day as well. The move higher was most welcomed by the bulls, who have been behind the eight ball since the market peaked in early October and as the bears have been in charge. But even as the market was getting hammered over the past two months, some stocks that came up big when they reported Read More 

ChartWatchers

Short-Term Trend is Improving

by John Murphy

Editor's Note: This article was originally published in John Murphy's Market Message on Friday, November 30th at 2:36pm ET. There are lots of way to determine the trend of the stock market. The placement of moving average lines is one of them. Bollinger bands (invented by John Bollinger) are another. Chart 1 applies both techniques to a daily chart of the S&P 500. The chart shows the SPX bouncing off previous support at its late October low which is positive short-term development. And it's now moving up to test its 200- and 50- day moving averages (red and blue lines). The 14-day Read More 

ChartWatchers

Plotting breadth indicators on Relative Rotation Graphs - Part II

by Julius de Kempenaer

After finishing the previous article on plotting breadth indicators on Relative Rotation Graphs I have spent hours and hours on studying probably a couple of thousand different RRGs holding various groups of sectors in combination with their breadth equivalents. And although I did not find the perfect prediction tool or the ideal leading indicator I do think using these alternative data series on RRGs can function as a piece of the puzzle that we are trying to solve. What have I learned so far? For this experiment I Read More 

ChartWatchers

You Must Master These Two Things To Trade Successfully

by Tom Bowley

Trading is difficult, emotional and can be quite lonely.  We have seen volatility ($VIX) shoot higher, rising from an 11.61 close on October 3rd to a high of 28.84 on October 11th.  Since then, we've remained above the key 16-17 support level that typically holds during bear markets.  I don't believe we're in a bear market, I'm just pointing out that the last two bear markets saw VIX declines down to 16-17, no further.  Bear markets require a certain level of fear to thrive in.  So far, the VIX is cooperating.  A VIX break below 16 would be a bullish Read More 

ChartWatchers

Taking the Temperature of the Stock Market

by Arthur Hill

The Momentum Factor iShares (MTUM) and the Minimum Volatility iShares (USMV) represent opposing sides of the market. High flying stocks can be found in the momentum ETF, while the more boring issues dominate the minimum volatility ETF. Using these two ETFs, chartists can quickly take the temperature of the stock market and adjust their strategy. The market is running hot and then risk appetite is strong when momentum stocks outperform (risk on). Conversely, the market is running cold and the risk appetite is weak when low volatility stocks outperform momentum stocks (risk off). Read More 

ChartWatchers

You Really CAN Make Money in a Rough Market Environment

by John Hopkins

The quarter beginning 10-1-18 has been challenging for a lot of traders. The NASDAQ has lost almost 10% while the S&P has lost 6%, both well off the quarter's low. Volatility has reigned with the VIX at elevated levels for most of the quarter. It has been challenging for us at EarningsBeats as well, though you might not know it from our results even though, of the 29 trade alerts we issued to our members since October 1, 18 stocks came off with losses. But on a risk adjusted basis - assuming an equal amount of money invested in all 29 stocks - so far we've seen a net gain of over 2.5% Read More 

ChartWatchers

NEW! Introducing "Chart View" For Market And Industry Summary Pages

by Grayson Roze

The more charts, the better. That's my motto, especially this week. I'm happy to announce that our Market Summary and Industry Summary pages have recently received a major upgrade – "Chart View" is here!  We've expanded the functionality of these two important pages, making them even more useful resources to help you track and analyze the current markets. Market Summary Page On our new-and-improved Market Summary page, you'll now see two tabs at the top – one for the original "Table View" and a new tab for "Chart View." This new view Read More 

ChartWatchers

Money Managers Report Lowest Exposure Since Early 2016

by Erin Swenlin

One of the sentiment indicators that I update MarketWatchers LIVE viewers on each Friday is the National Association of Active Investment Managers (NAAIM) exposure reading. A few things you should know about these guys. NAAIM’s membership ranges from small regional firms to large national firms, including hedge fund managers, mutual fund companies and a variety of other firms that provide professional services. Many of them are technicians. They will sometimes be "right" in their exposure in the very short term, but in the intermediate term, price reversals nearly always occur. Read More 

ChartWatchers

The Reason Short-Term Rallies are Failing is Because Weekly Charts Look Even More Negative

by John Murphy

Editor's Note: This article was originally published in John Murphy's Market Message on Wednesday, November 14th at 1:39pm ET. The weekly bars in Chart 2 show the last upleg of the S&P 500 uptrend that began in early 2016. And it shows that uptrend weakening. It shows the October price drop falling below its 40-week moving average (red line) by the widest margin in more than two years, and a rising trendline drawn under its 2016-2018 lows. This week's attempt to regain those two previous support lines is failing. The two weekly indicators in Chart 2 also paint a negative picture that Read More 

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