ChartWatchers March 16, 2019 at 12:00 AM
I have a chart at the bottom of this article that will explain my moving out of the bear market camp. Yes, it is delayed, but, as I explained before the December crash, I'd rather miss a bottom and rally than be hanging on for dear life during a quick and painful decline. More BUY signals are appearing on the DecisionPoint Scoreboards. Today, two new PMO BUY signals were triggered when they crossed above their signal lines. Don't get too excited, though, as the VXN and VXO suggest a decline for both next week. I've annotated the new Read More
ChartWatchers March 16, 2019 at 12:00 AM
Editor's Note: This article was originally published in John Murphy's Market Message on Friday, March 15th at 2:58pm ET. Just a week after slipping below their 200-day averages, the Nasdaq Composite Index in Chart 1 and the S&P 500 in Chart 2 appear to be ending the week above their November highs. That's the last overhead chart barrier to overcome below last year's highs. And increases the odds that those highs may be tested again. Chart 3 shows the Dow Industrials lagging behind. But that may have a lot to do with this week's heavy selling in Boeing. There seems little doubt Read More
ChartWatchers March 15, 2019 at 05:15 PM
The S&P is pretty much at the same level it was back in October of last year. However, it still remains well below its all-time high of 2939, which was also achieved in October of last year. Yet there are a number of stocks at their all-time highs, reflective of strong earnings and showing how traders remain attracted to the "best of the best." As an example, take a look at the charts for Trade Desk (TTD) and Stryker (SYK) below. Both easily beat earnings expectations and have hit their respective all-time highs, in spite of the market being below last year's highs Read More
ChartWatchers March 02, 2019 at 05:10 PM
As we look at the strongest ETFs for February, you'll notice how Chinese-related ETFs have soared of late, as shown in the list below. Commodity-related ETFs also did very well, as did the technology-related industry groups. From palladium to water, from oil to sunshine to silver, the commodities can be very fast-moving. As solar stocks are part of the energy sector, I like to correlate them into the commodities. One of the things about the commodity area is how fast they can move. In January, gold stocks were doing very well. In February, however, gold was Read More
ChartWatchers March 02, 2019 at 08:13 AM
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 March 02, 2019 at 05:51 AM
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 March 02, 2019 at 05:29 AM
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 March 02, 2019 at 12:00 AM
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 March 02, 2019 at 12:00 AM
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 March 01, 2019 at 08:25 PM
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
