Don't Ignore This Chart

September 2011

Don't Ignore This Chart

FTSE and EuroNext Move Sharply Lower

by Arthur Hill

The London FTSE 100 ($FTSE) and the EuroNext 100 ($N100) moved sharply lower on Friday. These two indices are easy to track from the StockCharts.com home page. The chart below comes from the home page. Click on the tabs at the top to see real time charts for four key European indices and three key US indices. The US indices will appear at the top when the US markets open. Click this image to see the current chart. Read More 

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Junk Bond ETF Remains with Wedge Support Break

by Arthur Hill

The High-Yield Bond SPDR (JNK) has a strong positive correlation to the stock market. Notice that the Correlation Coefficient is consistently above the .50 level. This means that the Junk Bond ETF and the S&P 500 move in the same direction most of the time. It could, therefore, be bearish for stocks that JNK broke wedge support with a sharp decline the last six days and remains weak. Read More 

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Bearish Engulfing Scan Lights Up

by Arthur Hill

With a strong open and weak close on Wednesday, hundres of stocks made the cut for the bearish engulfing scan (177 Nasdaq and 183 NYSE). The chart below shows Google ($GOOG) breaking wedge support last week and forming a bearish engulfing after a three day bounce. You can find more candlestick patterns on the Predefined Scans page. Read More 

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Basic Materials SPDR Produces Two Island Reversals in Two Months

by Arthur Hill

Recent volatility is making rare patterns not so rare. The chart below shows the Basic Materials SPDR (XLB) with its second Island Reversal in as many months. The most recent pattern formed with a gap down on Thursday, a consolidation Friday-Monday and a big gap up today. Shorts on Thursday-Friday-Monday are now trapped on the island with losses. Read More 

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Semis Lead Industry Groups in September

by Arthur Hill

September has not been nice for the broader market, but one key industry group is holding up quite well. The Semiconductor Index ($SOX) actually shows a gain month-to-date and shows relative strength. The S&P Retail Index shows a relatively small loss, as does the Airline Index ($XAL). Banks, Brokers, Oil Services and Gold/Silver are leading the way lower. Click this image for a current chart. Read More 

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Intermarket Overview Captures Risk-off Environment $GOLD $DOLLAR

by Arthur Hill

The chart below shows the five key intermarket securities with each ranked on the right side of the chart. The US Dollar Index ($USD) and 30-Year US Treasury ($USB) are at the top (strongest), while the S&P 500 and Spot Light Crude ($WTIC) are at the bottom (weakest). Gold Spot ($GOLD) remains in the upper half, but is falling. Read More 

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Consumer Staples Show a Few Gainers

by Arthur Hill

Stocks were down sharply on Thursday with all sectors moving lower on the day. There were, however, a few select pockets of strength. These can be found by looking for shades of green in the market carpet. The image below shows the Consumer Staples sectors with a few gainers. Read More 

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Altera Forms Pennant after Surge to Resistance

by Arthur Hill

Altera (ALTR) is at its make-or-break point. The stock surged to the August highs with a rather strong move last week. This advance met resistance as the stock pulled back with a pennant last four days. Either the stock will fail at resistance or break out of the pennant to signal a continuation higher. Read More 

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Small-caps Get Cold Feet ahead of Fed

by Arthur Hill

Stocks sold off in the final hour with small-caps leading the way lower. As the market summary page shows, the S&P SmallCap 600 ($SML) and the Russell 2000 ($RUT) led the afternoon decline with losses greater than 1.5% on the day. Read More 

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Apple Powers QQQ Higher with Strong Positive Correlation

by Arthur Hill

As Apple goes, so goes the Nasdaq 100 ETF (QQQ). Wall Street used to say the same thing about GM during its heyday. Apple surged to a new 52-week high and powered QQQ higher on Monday. The indicator window shows the Correlation Coefficient trading above .90 since mid August.  Read More 

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Utilities SPDR Forms Inverse Head-and-Shoulders Pattern

by Arthur Hill

The Utilities SPDR (XLU) continues to hold up well as it challenges its May-August highs with an inverse Head-and-Shoulders pattern. This also happens to be a bullish continuation pattern. Yes, a Head-and-Shoulders can mark a continuation. Also note that the pattern since late July looks like a cup-with-handle. Either way, a break above resistance is bullish. Read More 

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Target Hits a Wall of Resistance

by Arthur Hill

Target (TGT) surged to resistance in the 51.5-52 area for the third time in five weeks and formed a long black candlestick. A black (filled) candlestick means the close or current price is below the open. This means TGT opened at 51.74 on Thursday and moved lower after this open. Notice that this is the third black candlestick and resistance extends to the May high. Read More 

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Finance Sector Continues to Lag

by Arthur Hill

Stocks put together a pretty good rally over the last five weeks, but the finance sector continues to show relative weakness. The chart below shows the S&P Sector PerfChart with the percentage gain for the nine sectors and the S&P 500. All nine sectors are keeping pace with gains at or above the S&P 500 gain. The Finance SPDR (XLF), however, has gained considerably less. Read More 

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Maxim Breaks August High with Strong Move

by Arthur Hill

Maxim is leading a resurgent semiconductor group with a big surge over the last six days. The stock broke above its August high and exceeded the May trendline. Volume also picked up on the breakout. Read More 

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Altera Forms Big Bullish Engulfing Pattern

by Arthur Hill

Semiconductor stocks showed some relative strength on Monday. Altera (ALTR) participated with a big bullish engulfing on high volume. This is the second high-volume advance in the last five trading days. Look for follow through above resistance at 38 for confirmation. Read More 

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Stocks and Euro Fall Together as Correlation Coefficient Remains Positive $SPY $FXE

by Arthur Hill

The S&P 500 ETF (SPY) and the Euro Currency Trust (FXE) moved sharply lower the last two weeks with the Euro leading the way. FXE is trading below its summer lows and SPY may be about to follow suit. The indicator window shows the SPY:FXE Correlation Coefficient. Even though there were a few weeks in negative territory in March and June, this indicator has been largely positive, which affirms the positive correlation between stocks and the Euro. Read More 

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Steel ETF Remains Range Bound

by Arthur Hill

Like many other ETFs and stocks, the Steel ETF (SLX) has been range bound since the early August breakdown. The ETF plunged to 50 in early August and then moved into a trading range the last five weeks. Watch the range boundaries for the next directional clue. Read More 

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Junk Bond ETF Hits Key Retracement with Rising Wedge

by Arthur Hill

The High-Yield Bond SPDR (JNK) broke major support along with the S&P 500 in early August and then rebounded the last five weeks. This rebound formed a rising wedge and retraced 61.80% of the prior decline. Even though the 5-week trend is up, retracement resistance and the rising wedge look most ominous. Read More 

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Amazon Flexes Its Muscle by Moving Higher

by Arthur Hill

Stocks rebounded after a sharply lower open on Tuesday, but remain in negative territory overall. Amazon (AMZN) is bucking this trend with a 2+ percent gain. Gaining in the face of weakness shows relative strength.   Read More 

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Gold Miners ETF Hits 52-week High

by Arthur Hill

Even though the Gold Miners ETF (GDX) is underperforming gold, it is outperforming the stock market and hitting a fresh 52-week high. The GDX:GLD price relative remains in a downtrend, but the GDX:SPY price relative broke out in July to start an uptrend. After hitting resistance in the 64 area for some time, GDX broke free with a move above 65 today. Read More 

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Lululemon Forms Dark Cloud at Key Retracement

by Arthur Hill

High flyer Lululemon (LULU) surged over 20% the last seven days, but hit a resistance zone around 57 with a Dark Cloud pattern. Notice that this area also marks a 61.80% retracement of the July-August decline. A move below the gap at 53 would confirm the Dark Cloud pattern. Read More