Don't Ignore This Chart

February 2011

Don't Ignore This Chart

Dollar Cannot Hold a Bid as it Eyes October-November Lows $USD

by Arthur Hill

The US Dollar Index ($USD) extended its losses on Monday with a decline below 77. After a two week fall, the index is near its early February low. This level may offer support, but the trend is clearly down after the failure at 79 and wedge break. The next real support level is around the October-November lows. Read More 

Don't Ignore This Chart

Bollinger Bands Narrows as Coal Vectors ETF Consolidates

by Arthur Hill

The Coal Vectors ETF (KOL) has been stuck in a tightening trading range the last five weeks. After the sharp January decline, the ETF formed a triangle in February. As volatility decreased, the Bollinger Bands contracted to their narrowest range since early November, seen of a triangle breakout. Watch the current triangle boundaries for the next direction clue from KOL. Read More 

Don't Ignore This Chart

Delta Airlines Forms Big Bullish Engulfing after Gap

by Arthur Hill

Delta Airlines (DAL) came across the bullish engulfing scan on the predefined scans page. The stock gapped lower and declined with heaving volume on Tuesday. This decline was countered with a bullish engulfing on Wednesday with even higher volume. The stock is stalling Thursday and needs to break the Wednesday’s high to get a bounce going. Read More 

Don't Ignore This Chart

Positive Relationship between the Nikkei and the US 10-year T-Note Yield

by Arthur Hill

It may seem a rather strange relationship, but the Nikkei 225 ($NIKK) and the 10-year Treasury Yield ($TNX) have a positive relationship working. The chart below shows both rising and falling together since November 2009. Despite a setback over the last few days, both remain in uptrends overall. John Murphy elaborated on this positive correlation in his classic book on Intermarket Analysis in 2004.  Read More 

Don't Ignore This Chart

A Double Top Point & Figure Breakout for H&R Block

by Arthur Hill

A 25-cent daily Point & Figure chart for HR Block ($HRB) captures price action all the way back to July 2009. These X's and O's show the stock moving lower throughout 2010 and firming towards yearend. 2011 has been better with a double top breakout last week and a trendline break this week already. Read More 

Don't Ignore This Chart

Candlestick Charts for the Most Active List in One Click

by Arthur Hill

The NYSE and Nasdaq most active lists are displayed on the Free Charts page and updated throughout the day. Seven of the ten most active on the NYSE were down in early trading on Friday. Seven of ten were up on the Nasdaq. Chartists can see charts for all ten of these stocks by simply clicking the CandleGlance links at the bottom. Alternatively, chartists can compare performance for all ten with a PerfChart. Click this image to see the CandleGlance charts for the NYSE most active. Read More 

Don't Ignore This Chart

Dow Transports Finally Confirm Dow Industrials

by Arthur Hill

Dow Theory is built on the concept of confirmation. The Dow Transports should confirm a higher high in the Dow Industrials and visa versa. Failure to confirm signals that something might amiss. The Dow Industrials has been forging new highs throughout the month and the Dow Transports just made it above its January high to finally confirm. Better late than never. Read More 

Don't Ignore This Chart

Lumber and Homebuilder ETF Continues their Uptrends

by Arthur Hill

The Lumber Continuous Futures ($LUMBER) remains in a clear uptrend with a series of higher highs and higher lows since late June. This advance (roughly) corresponds with an advance in the Home Construction iShares (ITB). ITB was a little shakey in October-November, but the etf has been moving higher since late August. Rising lumber prices suggest rising demand which should bode well for housing starts. Read More 

Don't Ignore This Chart

Intel Forms Bearish Harami Near Resistance

by Arthur Hill

Intel is meeting some pretty stiff resistance around 22, but the overall trend remains up. The stock formed a big bearish engulfing in early December and a harami on Thursday-Friday. Even though harami are potentially bearish candlestick patterns, confirmation is required with some downside. Namely, look for a break below support at 21.25 to affirm resistance and reverse the five week advance. You can see more candlestick patterns on our pre-defined scans page. Read More 

Don't Ignore This Chart

Networking ETF Leads Tech Related ETFs Since Late August

by Arthur Hill

The PerfChart below shows five tech-relate ETFs along with the S&P 500 and the Nasdaq 100 ETF (QQQQ). All are up sharply since late August, but three are up more than 40%. The Networking iShares (IGN) is up some 48.4%, the Semiconductor HOLDRS (SMH) is up 45.41% and the Internet FirstTrust ETF (FDN) is up 40.11%. Looks like the future network needs are being priced in quite quick.  Read More 

Don't Ignore This Chart

Bonds Spooked as 30% CRB Surge Points to Inflation

by Arthur Hill

Something has clearly spooked the bond market over the last five months. Looking at the CRB Index, that something appears to be inflationary pressures. The CRB Index bottomed in early July and advanced over 30% the last seven months. Bonds peaked two months after the CRB Index bottomed and declined some 13% the last five months. Read More 

Don't Ignore This Chart

A Shooting Star for Macy's on the Predefined Stock Scans

by Arthur Hill

Macy’s (M) was one of ten NYSE stocks showing up on the Shooting Star scan on the Predefined Scans page. After surging the prior three days, the stock hit resistance from broken support and formed a large shooting star on Wednesday.  Note the small body, the long upper shadow and the shaven bottom. The stock bounced on Thursday and it would take a move below today's low to confirm the shooting star. Read More 

Don't Ignore This Chart

A Buying Climax or New Leg Higher for XLY

by Arthur Hill

After taking a big hit at the end of January, the Consumer Discretionary SPDR (XLY) firmed and surged to a new 52-week high this month. The ETF is up seven of the last eight days with a 5.3% advance. This is the sharpest advance since early September. This is either a buying climax or the start of another leg higher (like September). Read More 

Don't Ignore This Chart

Oil ETF and Gasoline ETF Disconnect

by Arthur Hill

The USO Oil Fund (USO) and the US Gasoline Fund (UGA) normally track each other pretty well, but these two have gone their separate ways over the last four weeks. UGA (red) is up around 1% and USO (black) is down around 4% since January 11th. This is unlikely to last too long. Read More 

Don't Ignore This Chart

Pockets of Red in the Year-to-date Sector Market Carpet

by Arthur Hill

The S&P Sector Market Carpet provide a nice color-coded means to view performance over a given period of time. This chart shows performance since December 31st. All sectors are up, but there are rather significant pockets of weakness (red) within these sectors. Read More 

Don't Ignore This Chart

A Bandwidth Contraction and Breakout for Garmin

by Arthur Hill

Bollinger Bands narrow as volatility falls and widen as volatility rises. The theory is that a volatility contraction is often followed by a volatility expansion. The directional clue depends on the break. Garmin (GRMN) has a classic contraction breakout working with a surge above the upper band on Friday. Notice that Bandwidth moved to its lowest level in over 8 months prior to this breakout. Read More 

Don't Ignore This Chart

SunPower Traces out a Bullish Continuation Pattern

by Arthur Hill

There are two types of head-and-shoulders patterns: reversal and continuation. A reversal pattern changes the trend, while A continuation pattern resumes the trend. SunPower surged in September and then consolidated with an inverse head-and-shoulders. Neckline resistance resides in the 14.90-15.10 zone. A breakout would suggest a continuation of the prior advance.  Read More 

Don't Ignore This Chart

Gold ETF Forms Small Inverse Head-and-shoulders Pattern

by Arthur Hill

The Gold SPDR (GLD) remains in a clear downtrend, but a small inverse head-and-shoulders pattern is taking shape the last 10 days. Neckline resistance resides in the 131-131.5 area and a break above this level would reverse the 4-5 week slide. Also notice that the Dollar and gold have been falling together since mid January. Read More 

Don't Ignore This Chart

Euro Top 100 Index Stays Above April High $EUR

by Arthur Hill

The Euro Top 100 Index ($EUR) may be underperforming the S&P 100, but the index is clearly in an uptrend. $EUR broke its April high in December and recorded a 52-week high in January. There is nothing but uptrend as long as the May trendline holds. This index is the European equivalent of the S&P 100 ($OEX). Read More