ChartWatchers May 31, 2019 at 12:57 PM
Editor's Note: This article was originally published in John Murphy's Market Message on Friday, May 31st at 11:14am ET. Energy stocks are one of the weakest parts of the market. So are bank stocks. There may be a reason why. The black bars in Chart 7 shows the Energy SPDR (XLE) trading at the lowest level in five months. The green bars show the KBW Bank Index trading below both moving average lines, and nearing a test of its March low. There may be a reason why both groups have been doing worse than the rest of the market over the last month. And that has to do with low Read More
ChartWatchers May 24, 2019 at 08:30 PM
We’re in a difficult period with the markets at the moment, as uncertainty surrounding U.S.- China trade talks is weighing heavily on stocks. With both sides throwing barbs and a resumption of talks not due until later this month, the pressure on the markets may very likely continue. With daily reactions to the latest trade-related headlines, there’s been an increased risk in equities, which, in turn, is pushing Interest rates down as investors seek the relative safety of U.S. Treasuries. In fact, yields are now down to levels not seen in over a year. Read More
ChartWatchers May 24, 2019 at 06:15 PM
There are no perfect signals that scream "GET OUT" of equities, but there are warning signs..so long as you know where to find them. Most market participants believe in the random walk theory, which suggests that changes in stock prices have the same distribution and are independent of each other. Therefore, the assumption is that past stock market movements or trends cannot be used to predict its future movement. I beg to differ. Sentiment swings back and forth. I think if we're all honest with ourselves, we know that we generally grow overly bullish Read More
ChartWatchers May 24, 2019 at 04:57 PM
Editor's Note: This article was originally published in Martin Pring's Market Roundup on Friday, May 24th at 4:42pm ET. This week has seen many interest rate series, both in the US and around the world, breaking down from important trading ranges or reaffirming previous breaks. It seems that the bond market is responding to the recent trend of lower commodity prices. In retrospect, that rangebound action, along with any further drop in yields in the period ahead, is likely to turn out to be part of a larger trading range, the upside resolution of which will ultimately signal the next Read More
ChartWatchers May 24, 2019 at 01:42 PM
About a month ago, I wrote an article for ChartWatchers titled “Five Trendlines You Should Be Watching.” The general idea was that, as long as those five trend lines held, then the market was still most likely in a very constructive phase. Revisiting those trend lines here will show that the picture has changed dramatically in just four weeks, presenting a more bearish outlook for the equity markets. 1) Nasdaq 100 Index This was a key chart for me, as it represented the mega cap technology leadership that drove the market higher in the first four Read More
ChartWatchers May 24, 2019 at 12:51 PM
Relative Rotation Graphs can help to identify threats and opportunities within groups of securities. In this article, I will be looking at the position and rotation of the Communication Services Sector against the S&P 500 and other sectors, followed by a closer look at the rotation of various stocks inside that sector, especially Google. From a Sector Perspective The RRG above shows the rotations for the 11 sectors in the S&P 500 index with Communication Services (XLC) highlighted. The rotation into the Read More
ChartWatchers May 17, 2019 at 06:54 PM
If you watch MarketWatchers LIVE regularly, you've probably heard about my new scan. I've found, especially when the market has a bearish bias, that my original Price Momentum Oscillator (PMO) scan wasn't producing any results. I consider this a caution flag before I get too involved with the results of my new scan. The original scan is below. Its requirements are quite high, so I won't get results in a bearish market; not only do I need a PMO on a rising trend, but the EMAs need to be configured bullishly. After the market takes a serious hit, there aren't that many stocks Read More
ChartWatchers May 17, 2019 at 05:56 PM
Editor's Note: This article was originally published in John Murphy's Market Message on Friday, May 17th at 4:49pm ET. The table in Chart 1 plots the relative performance of the eleven market sectors for the week. And they show a generally defensive market. That can be seen by the fact that REITs, utilities, and consumer staples are the three top sectors for the week. At the same time, the weakest sectors are financials, industrials, cyclicals, technology, and materials. Industrials were pulled lower by Deere and Caterpillar. Technology was held back by semiconductors with exposure to Read More
ChartWatchers May 17, 2019 at 04:50 PM
From what I can see, global bank charts are continuing to weaken. The banks as a whole have rolled over in the last two weeks, but we have some major banks around the world making new multi-year lows. This is problematic. First of all, we have the chart for KBE below. If this is an average of the banks, that average is now below both the 10-week and 40-week moving averages. The price action is also continuing the downtrend. Notice that momentum, shown by the PPO, is rolling over at zero. This is not good. But the world has some banks in serious trouble from a Read More
ChartWatchers May 17, 2019 at 04:20 PM
The bearish failure swing is a bearish RSI signal from Welles Wilder, creator of RSI. Note that this signal is NOT the same as a bearish divergence, even though a bearish divergence is also possible at the same time. A bearish failure swing has four parts: RSI moves above 70 (1), RSI falls back below 70 (2), RSI rises and fails to exceed 70 (3), RSI falls below the intermittent low (4). The failure occurs when RSI fails to exceed 70 on the bounce. Signal confirmation occurs when RSI breaks its prior low. The failure below 70 shows waning upside momentum, while the break below the Read More
