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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

Here's A Trading Strategy That Works In Any Market

by John Hopkins

Ultimately, the U.S. stock market lives and dies by the performance of its economy and how that translates into earnings growth of U.S. companies.  Nearly every economic report that we've seen of late has been strong or strengthening.  The number of companies that are performing well on their top and bottom lines has been growing.  It's evidenced by the number of stocks that we currently have on our Candidate Tracker at EarningsBeats.com.  We have nearly 300 companies on this Candidate Tracker ChartList and it's by far the most we've ever had.  It tells us a few Read More 

ChartWatchers

Awaiting Some Relative Strength Clues In Energy Related Stocks

by Greg Schnell

Oil trades have had a big beautiful run from June into early January. The commodity related stocks have also run since August. But there are some relative strength relationships we need to see break out to launch the next phase of stock runs. Within the energy space, the recent flare-up in Natural Gas prices appeared as NYMEX traders felt the cold come in. Oil has been a persistent bull and just keeps adding a new high every week. But the energy exploration stocks and the oil service stocks had not broken out of their big down trends in relative strength (RS) during 2017 Read More 

ChartWatchers

Pockets of Strength Outweigh Pockets of Weakness

by Arthur Hill

The stock market is never 100% bullish with all stocks participating in an uptrend. There are always some holdouts and pockets of weakness, but the broader market can continue higher as long as the pockets of strength are greater than the pockets of weakness.  The percentage of stocks above the 200-day EMA is a great way to measure internal strength and this indicator has remained strong since mid September. Of note, S&P 500 %Above 200-day EMA (!GT200SPX) has been above 70% since September 12th and large-caps show the most internal strength overall. Mid-Cap %Above 200-day EMA Read More 

ChartWatchers

Market Still Overvalued, or Maybe Not

by Carl Swenlin

Earnings for 2017 Q3 will be finalized soon, but on a preliminary basis the S&P 500 has a P/E of 25, which is extremely overvalued. The chart below shows the S&P 500 Index (black line) in relation to where it would be if it were undervalued (P/E 10 - green line), fair value (P/E 15 - blue line), or overvalued (P/E 20 - red line). Price moved well above that range over two years ago, just before the current cyclical bull market began. Earnings growth through 2018 Q3 will bring the P/E down to 21, but only if price goes no higher. If the bull market Read More 

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 

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