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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 Are Two Stocks To Consider In December...And One To Avoid

by Tom Bowley

I love to combine bullish seasonality with strong or strengthening technical conditions.  As we move into December, it's important to realize that there has been no better month for the S&P 500 since 1950 than December, which has produced annualized returns of +19.51%.  Also, December has resulted in rising S&P 500 prices 50 of the last 67 years, easily the best such month of the year.  So we know that history is on our side to look for long trades. So which individual stocks also perform well in December and beyond?  Well, I examined all 500 Read More 

ChartWatchers

Metals - The Calm Before The Storm

by Greg Schnell

One of key principals of a global bull market is the major moves in the sectors as the market expands. As we head into 2018, there are a significant number of charts that suggest we could be on the platform for a significant move in commodities. The Commodities Countdown blog tries to show some of the major themes, including oil off the July lows. One of the major setups now is the metals. The chart of the steel ETF has been consolidating for months. Copper has had a great run this year, and with the love of electric vehicles (EV), looks set for many great years ahead. Along with copper Read More 

ChartWatchers

Financials and Industrials Lead New High Expansion

by Arthur Hill

Chartists can plot High-Low Percent for the nine sectors to identify areas of strength within the stock market. The chart below shows the High-Low Percent ranked by this week's highest value. The finance, industrials and consumer discretionary sectors stand out this week because their High-Low Percent indicators hit the highest levels of the year. High-Low Percent for the finance and industrials exceeded +50%. Assuming virtually no new lows this week, this suggests that more than 50% of the stocks in these sectors hit new highs. XLY High-Low% ($XLYHLP) exceeded 20% the last three days and Read More 

ChartWatchers

Energy ETFs Triggering Bullish Signals

by Erin Swenlin

The energy sector has been on a bit of a rollercoaster the three months, moving from deep lows in August to a new trading range of large percentage highs and lows. I'm starting to see signs that the trading range is going to be history as price now is butting up against overhead resistance at the top of the trading range. On XLE, the Energy SPDR, we had a hint that the rally that started at the beginning of September would continue on. The 20-EMA crossed above the 50-EMA which triggered an IT Trend Model BUY Signal. Back in October an all-important LT Trend Model BUY signal appeared Read More 

ChartWatchers

High Yield Bond ETF is Bouncing Sharply Off Support, Telecom Weakest Sector

by John Murphy

The recent selloff in high yield junk bonds has attracted a lot of attention in the financial media. My Tuesday message showed the iBoxx High Yield Corporate Bond iShares (HYG) headed down for a test of chart support at its August low and its 200-day moving average. Chart 1 shows the HYG scoring an upside reversal day yesterday after touching its 200-day average (green circle). That positive action is being followed by a gap higher today. Those are encouraging signs that the selloff in high yield bonds may have run its course. The 14-day RSI line (top of chart) also shows that the HYG had Read More 

ChartWatchers

Focusing on Solid Earnings can Boost your Risk Adjusted Returns

by John Hopkins

One by-product of focusing on stocks that beat earnings handily is the opportunity to boost overall returns. I know this for a fact as we studied the performance of almost 40 stocks that were trade alerts to EarningsBeats members over the past six months and found that on a risk adjusted basis, returns were almost 5 times that of the S&P. For example, when we issue a trade alert to our members we provide them with entry prices, price target and stop loss levels. If a stock hits a price target or stop loss it is moved out of the active category and we can then calculate how it has Read More 

ChartWatchers

Here Are Five S&P 500 Stocks Poised To Rise Through December

by Tom Bowley

I'm a big historian and a fan of the "history repeats itself" theory.  But I'm a bigger fan of technical analysis where price action simply doesn't lie.  You can listen to all the CNBC "hype" if you'd like, where their "experts" provide their favorite picks.  I look at the charts of some of these "can't-miss" trades, shake my head and change the channel. Call me crazy, but I like to trade stocks where I can minimize my risk and maximize my return potential.  I like to own stocks that appear to be under accumulation - prices rising with strong volume trends Read More 

ChartWatchers

What Does a Flat Yield Curve Look Like Anyway?

by Arthur Hill

I hear talk that the yield curve is flattening and that this is a problem for the stock market. While it is true that the spread between the 10-yr T-Yield ($UST10Y) and 2-yr T-Yield ($UST2Y) is the lowest since 2007, the yield curve itself is by no means flat. The chart below shows the 10-yr yield in black and the 2-yr yield in red (top window). Notice that the 10-yr yield has been flat since 2012, and I mean really flat. Meanwhile, the 2-yr yield turned up in 2014 and moved to its highest level since 2008.  The bottom window shows Read More 

ChartWatchers

Currencies Are At An Important Inflection Point

by Greg Schnell

The Yen ($XJY), the Euro ($XEU) and the US Dollar ($USD) are all at important inflection points this week. Stay tuned as this could really decide the direction of Gold, Silver and other commodities this week. Starting with the Yen, this is a critical one to watch, Gold tracks it quite closely. With this close tracking, a break to the upside in the Yen could lead to a big move in Gold. Next is the Euro ($XEU), which makes up more than half of the $USD index. If the Euro is moving higher, the Dollar almost has to move lower. However, we Read More 

ChartWatchers

Sentiment Is Almost Bearish Enough

by Erin Swenlin

Sentiment charts haven't been all that enlightening with mostly neutral readings. However, we are reaching bearish levels that generally result in a rally. Here's my interpretation of the latest sentiment from the put/call ratios, AAII, NAAIM and Rydex Ratio.  What I pointed out in today's MarketWatchers LIVE show was that the CBOE put/call ratio is reaching near-term overbought territory. The Equity put/call ratio isn't so overbought, but it is still stair stepping higher. The OEX put/call ratio is many times used as a hedge so I actually look for those ratios to bottom in Read More 

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