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Nasdaq McClellan Summation Index Turns Down at Zero Line

by Arthur Hill

With another bout of selling pressure this week, the Nasdaq McClellan Summation Index reversed at the zero line and moved back below -100. Notice that this breadth indicator has been largely negative since mid March. You can read more on the McClellan Oscillator and Summation index in our ChartSchool. Read More 

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General Dynamics Breaks Chart Support and Relative Support

by Arthur Hill

General Dynamics (GD) broke below its June low with a sharp decline the last two days. Also notice that the Price Relative (GD:SPY Ratio) broke support. GD is showing both absolute and relative weakness. Read More 

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Expedia Forms Bearish Engulfing Pattern

by Arthur Hill

Expedia has been on a tear the last few months with 50+ percent advance since February. The stock has yet to correct, but a bearish engulfing pattern hints at a possible short-term reversal. More candlestick patterns can be found on the pre-defined scans page. Read More 

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Small-Caps and Mid-Caps Lagging the Last 10 Days $MID $SML

by Arthur Hill

While the Nasdaq 100 continues to move higher and the S&P 500 shows gains the last 10 days, the PerfChart below shows that small and mid caps are starting to suffer. The S&P 500 is up just over 1% snce July 13th, but the S&P MidCap 400 and S&P SmallCap 600 are down. Read More 

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LTD Gaps From Resistance on High Volume

by Arthur Hill

After meeting resistance from the May high twice this month, Limited (LTD) gapped down on big volume Monday. This gap should be considered bearish until proven otherwise with a move back above the gap zone. Read More 

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Intel Challenges Pennant Resistance on Light Volume

by Arthur Hill

Intel (INTC) is making waves today with an attempt to break pennant resistance. Notice how the stock surged from 21 to 23.25 and then consolidated the last few weeks. A breakout would signal a continuation higher, but low volume detracts from today’s move. Read More 

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XLU Breaks Cup-with-handle Resistance

by Arthur Hill

With a big surge over the last three days, the Utilities SPDR (XLU) is breaking rim resistance from a cup-with-handle pattern. These bullish continuation patterns were popularized by William O’Neal, founder of Daily Graphs and IBD. Also notice that the July pullback looks like a falling flag. Read More 

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Energy SPDR Leads Sectors over the last 10 days

by Arthur Hill

As this sector PerfChart shows, the Energy SPDR (XLE) is the standout performer over the last 10 trading days with a 2.1% gain. In contrast, the S&P 500 is down around 1% during this timeframe. Industrials and finance have weighed on the S&P 500 the last two weeks, but technology is in the green. Read More 

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Tech SPDR Gaps Higher and Starts to Lead

by Arthur Hill

After firming for a few days, the Technology ETF (XLK) gapped higher on Wednesday with an open above 26. This is a big gap that is bullish as long as it holds. In the indicator window, the Price Relative turned up as XLK starts to outperform the S&P 500 ETF (SPY). Read More 

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French CAC 40 Index Breaks March Low

by Arthur Hill

With a plunge over the last seven days, the French CAC Index ($CAC) broke below its March low and reached its lowest point of the year. Also notice that the index formed lower highs in May and early July. The breakdown reflects the current debt problems in the Euro zone. Read More 

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Revisiting the 2000 S&P 500 Reversal

by Arthur Hill

The 2000 market top evolved over a 12 month period as the S&P 500 traded between 1325 and 1550. The index broke this range at the end of 2000 and continued lower in early 2001. Notice that broken support turned into resistance and the throwback bounce retraced 50% of the prior decline. RSI confirmed the support break in late 2000 with a move below 40. Read More 

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Revisiting the 2007 S&P 500 Reversal

by Arthur Hill

Although no two market tops are the same, we can get an idea of what a major reversal looks like by examining past reversals. The 2007 top evolved over a 9 month period. There were clear support breaks at 1425 and 1375. RSI broke its bull zone (40 to 80) at the end of December 2007. The ensuing throwback rally retraced 50% and met resistance near broken support. Read More 

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AKAM Hits Fibonacci Cluster Zone

by Arthur Hill

The Fibonacci Retracements Tool can be used to identify Fibonacci levels to estimate support, resistance or turning points. When there is more than one advance, chartists can apply this tool to both moves and look for a cluster zone. The chart for Akamai shows the Fibonacci Retracements Tool extending from the November 2008 low and from the July 2009 low. The 61.8% retracements cluster in the 26.68 to 30.75 area to mark potential support. Read More 

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Finance Sector is the Big Drag

by Arthur Hill

The advance since the March lows has been enough to power the Consumer Discretionary SPDR (XLY) past its 2007 high. The Industrials SPDR (XLI) and the Technology ETF (XLK) both met resistance at their 2007 highs over the last few months. The Finance SPDR (XLF) remains the big laggard as it trades some 35% below its 2007 highs. This key sector has been a major drag on the S&P 500 since early 2010. Read More 

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12 month Slope Indicator remains Positive for S&P 500

by Arthur Hill

Taking a big step back to look at the big picture, the 12-month Slope indicator for the S&P 500 turned positive in September 2009 and remains positive. While this indicator does not pick exact tops or bottoms, it gives us a good idea of the long-term trend. Note the green and red arrows showing positive and negative crossovers. Read More 

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10-year Treasury Yield Backs off Long-term Resistance

by Arthur Hill

The 10-year Treasury Yield ($TNX) remains in a long-term downtrend that is dominated by a falling channel. The upper trendline has been touched at least four times since the mid 90s. More recently, the 10-year Treasury Yield hit resistance around 48.50 at least three times since May 2008. A break above this level is needed to reverse the long-term downtrend in rates and uptrend in bonds. Read More 

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A Massive Triangle Takes Shape for the Home Construction iShares

by Arthur Hill

The Home Construction iShares (ITB) has gone nowhere since August 2009. After first crossing back above 12.75 in early August 2009, the ETF has meandered above/below this level the last 23 months. On the right half of the range, a large Symmetrical Triangle is taking shape. A break from this Triangle would trigger the next directional signal and could have ramifications for the broader market. Read More 

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Spanish IBEX Index Hits Major Resistance Zone

by Arthur Hill

The Spain Bolsa de Madrid IBEX 35 Index ($IBEX) hit a major resistance zone around 11000. Notice that the index has been turned back near this level since July 2010 (one year). A breakout is needed to revive the bulls here and build confidence in Europe. RSI confirms resistance as the indicator stalls in the 50-60 zone. Read More 

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Dow Industrials Remains Well below 2007 High

by Arthur Hill

The chart below shows the 23-day SMA for the Dow Industrials. There are around 23 trading days per month and this represents a rolling monthly average. It also smooths daily volatility.  The March 2009 low was around 10% below the March 2003 low and the July 2011 high was around 10% below the October 2007 high. 12000 marks the first support to watch for this moving average. Read More 

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Dollar and S&P 500 Continue Negative Correlation

by Arthur Hill

The Dollar and the S&P 500 have been negatively correlated since April 2010. The chart below shows three big swings with the Dollar and S&P 500 moving in opposite directions. After a long advance in stocks and decline in the Dollar, stocks peaked and the Dollar bottomed at the beginning of May. Read More