Don't Ignore This Chart

November 2011

Don't Ignore This Chart

JP Morgan Surges off Support with Gap

by Arthur Hill

As one of the big money-center banks, JP Morgan (JPM) clearly benefited from the coordinated central bank action on Wednesday. The chart below shows JPM bouncing off support with a big gap on big volume. JPM closed near the high of the day. The gap is bullish as long as it holds. A move back below 29 would call for a reassessment. Click this chart for a live image Read More 

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Airlines and Oil Go their Separate Ways

by Arthur Hill

The Airline ETF (FAA) and Spot Light Crude ($WTIC) were moving in the same direction from July to mid October, but went their separate was in late October. Spot Light Crude surged above 100 in November as the Airline ETF tested its early October low. Airlines are clearly not happy with rising oil prices as the ETF underperforms the broader market. Click this image for live chart. Read More 

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Oil and Gasoline ETFs Diverge

by Arthur Hill

The indicator window shows the US Gasoline Fund (UGA) peaking in mid October (blue) and moving lower the last six weeks, while the US Oil Fund (USO) continued moving higher (red). Something needs to give here. Notice that UGA formed a large descending triangle the last 5-6 months and a break below 45 would signal a continuation lower. Click this chart for a live image Read More 

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Wal-Mart Moves into Narrow Range as Black Friday Hits

by Arthur Hill

Wal-Mart (WMT) remains in an uptrend overall, but may be poised for a correction as Black Friday comes and goes. The stock declined sharply in mid November and then consolidated the last 6-7 days. Watch for a break from this consolidation to trigger the next signal. Click this chart for a live image Read More 

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Dow Testing P&F Trendline Support - 11300 is the Number

by Chip Anderson

So, how significant is the Dow's recent loss?  If you understand the power of P&F charting, you'll get your answer from this chart: For those that are new to P&F charts, remember that they automatically filter out insignificant price moves.  This is misleading to people who are used to looking at bar/candlestick charts and mentally filtering out outlying data.  Everything on a P&F chart is significant.   In addition, every column on a P&F chart represents a slanted trend on a regular bar chart and therefore the automatic red and blue Read More 

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Broken Support Turns First Resistance for German DAX

by Arthur Hill

After forming a rising wedge in October, the German DAX reversed in the key retracement zone and broke support with a sharp decline below 5700 the last few days. These are clearly bearish developments. Broken support in the 5800 area turns first resistance, which is confirmed by the trendline extending down from late October. Allowing for a little buffer, I would set key resistance at 6000. Click this chart for a live image Read More 

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Only a Handful of Stocks are Up the last Five Days

by Arthur Hill

There have been few hiding places over the last five trading days. The major indices are down sharply and all sectors are also down. As the Sector Market Carpet shows, stocks in the utilities and consumer staples sectors were down the least, while technology and energy stocks were down the least. The red box to the right shows the top five gainers and losers. Click this chart for a live image Read More 

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All 30 Dow Stocks Moving Lower

by Arthur Hill

The CandleGlance chart for the 30 Dow stocks provides snapshot of the current day’s action. As of 12:30ET on Monday, all 30 components were down with most down over 2%. This is clearly a broad-based decline that is affecting all sectors. The screenshot below shows the four of the thirty stocks. Click this chart for a live image Read More 

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Bollinger Bands Narrow for Procter & Gamble

by Arthur Hill

After a sharp decline and gap down, Procter & Gamble (PG) moved into a tight trading range the last three weeks. The pink lines show a pennant or small triangle taking shape. The blue lines show Bollinger Bands (10,2) narrowing as well. A break below the lower band would be bearish, while a break below the upper band would be bullish. Click this chart for a live image Read More 

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Techs and Finance Lead Lower in Market Carpet

by Arthur Hill

The Market Carpet is a sea of red on Thursday with the technology and finance sectors leading the way lower. Notice the numbers in the top box of each sector. The average tech stock is down 2.8% and the average finance stock is down 2.2% (just before the close). Click here for a live Market Carpet. Read More 

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A Hanging Man and a Harami for XLK

by Arthur Hill

The Technology SPDR (XLK) is hitting resistance from the late October high with a Hanging Man last week and a Harami this week. Both candlesticks are bearish reversal patterns. The Hanging Man was confirmed with a gap down and long black candlestick, but the ETF quickly bounced back above 26. The current Harami shows more indecision at resistance. A move lower from here would confirm this short-term reversal pattern. Medium-term support remains in the 25 area. Click this chart for a live image Read More 

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Lots of Red in the European Market Carpet

by Arthur Hill

StockCharts.com offers a Market Carpet covering component stocks for seven European Indices. Chartists can look at all seven or click the title bar to focus on one. The image below focuses on the Euronext 100. There is a lot of red today with banks representing three of the five weakest components. Click this chart for a live image Read More 

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Altera Forms Falling Wedge on Lower Volume

by Arthur Hill

After a surge with good volume in October, Altera (ALTR) corrected with a falling wedge the last 2-3 weeks. Also notice that the stock exceeded its September high with the October surge. The falling wedge looks corrective and a break above last week’s high would signal a continuation higher. Click this chart for a live image Read More 

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Resistance Turns Support Turns Resistance Again for the German DAX

by Arthur Hill

Traditional technical analysis teaches us that broken resistance turns support and broken support turns resistance. This concept is alive and well on the German DAX Index ($DAX) chart. Using the Auto Support-Resistance Tool on Sharpcharts, a horizontal line at 6400 goes from red to green to red again as this level moves from resistance to support to resistance. Click this chart for a live image Read More 

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ADI Hits Support on Point & Figure Chart

by Arthur Hill

After plunging along with the market early this week, Analog Devices (ADI is trading at support from the early November lows. On this P&F chart, each box represents a quarter percent price change (.25%) and price data is based on the close every 30 minutes. Yes, this is an intraday P&F chart. Support, which is easy to identify on P&F charts, is holding for now and the Double Top breakout remains in play. A break below support would forge a Triple Bottom Breakdown and target lower prices. You can read more on P&F patterns in our ChartSchool. Click this chart for a live Read More 

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DIA Solidifies Resistance with Two Gaps

by Arthur Hill

For the second time in three weeks, the Dow Industrials SPDR (DIA) moved above 121 and then gapped down. These two gaps indicate that DIA has stiff resistance in the 122 area. Key support is based on the prior trough at 116. Follow through below this level would reverse the October uptrend. Click this chart for a live image Read More 

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Regional Bank SPDR and Homebuilder SPDR Advance Step-for-Step

by Arthur Hill

The Regional Bank SPDR (KRE) and the Homebuilders SPDR (XHB) have been leading the market higher since early October. Both bottomed with the October 3rd close and surged over 20% the last five weeks. Also notice how these two are moving step-for-step. KRE is red and XHB is black. Strength in these two groups is very positive for the broader market. The Correlation Coefficient shows a strong positive correlation. Click this chart for a live image Read More 

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Randgold Leads Gold with a 52-week High

by Arthur Hill

Randgold Resources (GOLD) is leading the gold miners and gold with a new 52-week high the last few days. Also note that Randgold broke resistance with a move above 115. The indicator window shows Randgold relative to gold with a ratio plot (GOLD:$GOLD). The Price Relative is trending up and also hit a new high, indicating that Randgold is leading gold. Click this chart for a live image Read More 

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Apple Consolidates after a Gap Down

by Arthur Hill

Apple Corp (AAPL), which accounts for around 14% of the Nasdaq 100 ETF (QQQ), gapped down in mid October and then consolidated. This low volume consolidation now looks like a flat flag. Watch the boundaries for the next directional clue. Any move Apple will affect QQQ. Click this chart for a live image Read More 

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Gold and Oil ETFs Lead the Week

by Arthur Hill

The PerfChart below shows the performance for five intermarket ETFs. The Gold SPDR (GLD) and the US Oil Fund (USO) sport the biggest gains and are clearly leading the group. The 20+ year Bond ETF (TLT) and US Dollar Fund (UUP) have the smallest gains and are lagging. Such relative strength in oil bodes well for energy related shares. Click this chart for a live image Read More 

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Broken Resistance Turns Support for Regional Bank SPDR

by Arthur Hill

The Regional Bank SPDR (KRE) broke resistance with the October surge and broken resistance turned into support. This is a basic tenet of technical analysis. The throwback to broken resistance held (so far) as the ETF bounced back above 23 on Wednesday. Click this chart for a live image Read More 

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A Failed Breakout and Island Reversal for MDY

by Arthur Hill

With a gap down and sharp decline the last two days, the S&P MidCap 400 SPDR (MDY) failed to hold the resistance breakouts around 160. Also notice that the ETF formed an island reversal, Last Thursday’s gap was countered by today’s gap to create a three-day  price island. Click this chart for a live image Read More