DecisionPoint

Dow Stocks in Bear Markets

The Dow Jones Industrial Average is clearly in a bull market, having made a strong move in November and December  to new, all-time highs and coming within less than a half point of reaching 20,000; however, as I perused the charts of the 30 Dow components I found three stocks that are actually in bear markets. That is only 10% of the the component stocks, so it isn't a big deal, but I thought it was worth looking at them. But before I get to those bear market stocks, let's quickly evaluate the Dow chart.

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Webinar Review of Consumer Staples SPDR (XLP)

Yesterday during my webinar, I added a "chart spotlight" at the end of the program. It's a new feature that viewers had asked for since I generally go through a review of the major indexes (small and large), DP indicators and the "Big Four" as I call them, Dollar, Gold, Oil and Bonds, so this addition adds a new chart or two each time. I typically will run a scan to find possible candidates; however, this time it was presented to me through a technical alert. I reviewed the Consumer Staples SPDR (XLP) because I was alerted that it had just triggered a Long-Term Trend Model (LTTM) BUY signal. 

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Market Action Changes Our Focus

At the close of the prior week, a breakout from a flag formation had us questioning if the market was too overbought for the breakout to lead to higher prices. My conclusion was that there was plenty of room to the upside before our indicators got uncomfortably overbought. Brilliant! Unfortunately, there was no followthrough on the breakout at all, and the market just dribbled sideways for a week. Our indicators still allow for more upside price movement, but that is no longer of immediate concern.

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Rydex Cashflow Ratio Sentiment: Putting Money Where the Mouth Is

Carl Swenlin wrote back in a July 2014 an in-depth article about the Rydex Cashflow and Asset Ratios. His explanation of sentiment in relation to the Rydex Ratios is simple and well-stated so I won't rewrite it:

"Sentiment has traditionally been measured by taking polls of selected groups of investors, advisors, investing professionals, etc. There have been and still are problems associated with this methodology: (1) The polls are normally taken over a period of several days, during which time market movement and investor outlook can change radically; (2) The responses are strictly subjective, reflecting the emotional status of the person being polled, not necessarily his/her investment positionThe Rydex Ratio makes it possible for us to analyze sentiment based upon what investors are actually doing with real money."

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Does New Rally Have Good Technicals?

Two weeks ago I was looking for a price top. Strictly speaking, we got one, but the decline was short-lived (three days), and the low was the last low in a four-week flag formation. The new rally off that low was strong enough to fuel a breakout to new, all-time highs on Friday. My immediate concern is whether this breakout has good technicals behind it.

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Commodities ETF (GSG) Posts New Long-Term Trend Model BUY Signal

The iShares Commodity ETF (GSG) had a momentous BUY signal. Today, the 50-EMA crossed above the 200-EMA, reaching territory unseen since 2014. This crossover triggers a Long-Term Trend Model BUY signal that suggests GSG has entered a new bull market. A review of the charts reveals this new signal has arrived as GSG reaches a crossroad.

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On Alert for a Top

In the last few weeks the market has moved into a bullish pennant formation. In doing so it also violated the rising trend line on Thursday, but the trend line penetration has sideways, rather than sharply down, so I think the pennant carries more weight. Nevertheless, medium-term indicators are sufficiently overbought to cause me to start looking for a pause or a pullback.

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Utilities ETF (XLU) New Long-Term AND Intermediate-Term Trend Model BUY Signals

I have a variety of StockCharts technical alerts set up. As a result, I receive emails whenever the entities in my alert ChartList receives new Trend Model signals and Price Momentum Oscillator (PMO) crossover signals. Today I received an alert that the Utilities SPDR (XLU) triggered a new Intermediate-Term Trend Model BUY signal. When I looked at the chart I realized that a new Long-Term Trend Model BUY signal had generated too.

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