Don't Ignore This Chart

December 2011

Don't Ignore This Chart

Dow Transports Challenges Resistance

by Arthur Hill

With a surge in late December, the Dow Transports is once again challenging resistance from the October highs. Notice that the Average failed at this level in early December. The Dow Industrials is also hitting resistance near the October high. Breakouts in both would be bullish according to Dow Theory. Click this chart for a live image Read More 

Don't Ignore This Chart

Energy SPDR Forms Large Triangle Consolidation

by Arthur Hill

After surging in October, the Energy SPDR (XLE) moved into a sideways pattern with a lower high and a higher low. In short, the noose is tightening as a triangle consolidation takes shape. Watch resistance from the early December high and support from the mid December low for the next directional signal. Read More 

Don't Ignore This Chart

QQQ Turns Back At November Trendline

by Arthur Hill

The Nasdaq 100 ETF (QQQ) is hitting resistance from the November trendline and a key retracement. Notice that the ETF turned back at the 62% retracement with Wednesday's decline. A lower high could be taking shape as buying pressure dries up below the early December high.  Read More 

Don't Ignore This Chart

Consumer Staples SPDR Continues to Lead with 52-week High $XLP

by Arthur Hill

Of the nine sector SPDRs, only two hit new 52-week highs last week: the Consumer Staples SPDR (XLP) and the Utilities SPDR (XLU). These two defensive sectors are clearly leading the market right now. The chart below shows XLP breaking its May highs and the Price Relative moving higher since February. Click this chart for a live image Read More 

Don't Ignore This Chart

Santa Delivers the 200-day for the S&P 500

by Arthur Hill

The Santa Clause rally continued into Friday with the S&P 500 clearing its 200-day moving average in the early afternoon. Prior attempts in early December failed as the index fell back before the close. Let’s see if Santa can make good on this one. Merry Christmas! Click this chart for a live image Read More 

Don't Ignore This Chart

DIA Forms Inverse Head-and-Shoulders Pattern

by Arthur Hill

The Dow Industrials SPDR (DIA) is challenging resistance from an inverse Head-and-Shoulders pattern. After surging in October, the ETF consolidated for two months to set up the pattern. The late November low formed the head and neckline resistance is set just above 122. Before getting too bullish, note that low volume during this week’s advance detracts from the pattern. Click this chart for a live image Read More 

Don't Ignore This Chart

Two Bearish Patterns Take Shape in Akamai

by Arthur Hill

There are two bearish patterns at work with Akamai (AKAM). First, a lower high formed in early December and a descending triangle is taking shape. A move below 26 would confirm this pattern. Second, a bear flag formed the prior five days and the stock is on the verge of breaking flag support with a sharp decline on Wednesday. Click this chart for a live image Read More 

Don't Ignore This Chart

ADP Breaks Resistance with big Surge

by Arthur Hill

Automatic Data Processing (ADP) may have an antiquated name, but the stock has outperformed Apple (AAPL) since mid September. On the chart below, ADP broke resistance from the October-November highs with a big move. Even though volume is light, the breakout is bullish as long as it holds. Click this chart for a live image Read More 

Don't Ignore This Chart

A Triple Bottom Breakdown for QQQ on 30min PnF Chart

by Arthur Hill

The Nasdaq 100 ETF (QQQ) broke below the prior two O-Columns to forge a triple bottom breakdown on the 30min PnF chart. This bearish signal suggests that the ETF is going lower with a downside price objective around 52.90. This can be see at the top of the chart. You can read more on PnF signals in our ChartSchool articles.   Read More 

Don't Ignore This Chart

NYSE McClellan Summation Index Turns Down

by Arthur Hill

With a downturn in the stock market this week, the NYSE Summation Index ($NYSI) turned back down and broke below its 5-day EMA. This shows that breadth is deteriorating once again. The McClellan Oscillator also turned negative. Note that the Summation Index is a cumulative measure of the McClellan Oscillator. The Summation Index rises when the oscillator is positive and falls when the oscillator is negative. Click this chart for a live image Read More 

Don't Ignore This Chart

StockCharts Technical Rank Surges as Merck Breaks Flag Resistance

by Arthur Hill

Top ten lists for the StockCharts Technical Rank (SCTR) can now be found on the home page (scroll down). Merck (MRK) stands out from the list of stocks with the biggest SCTR change. The SCTR jumped 12.4 as the stock broke flag resistance and challenged its 2011 highs. Click this chart for a live image Read More 

Don't Ignore This Chart

Retailer SPDR Tests Breakout and Near Term Support

by Arthur Hill

The Retail SPDR (XRT) is under pressure today after a miss from Best Buy (BBY) and a lackluster Retail Sales report. XRT broke trendline resistance in early December and then consolidated. This breakout is holding, but barely. Consolidation support is set at 52 and a break below this level would be bearish. Click this chart for a live image Read More 

Don't Ignore This Chart

Silver ETF Breaks Flag Support

by Arthur Hill

Weakness in precious and industrial metals weighed on silver as the Silver Trust (SLV) broke flag support with a sharp decline Monday. This break signals a continuation of the breakdown from mid November. MACD moved below its signal line to turn momentum bearish. Resistance is set at the early December high. Click this chart for a live image Read More 

Don't Ignore This Chart

Brent Oil ETF Traces out Head-and-Shoulders Pattern

by Arthur Hill

The Brent Crude ETF (BNO) hit resistance from the summer highs and formed a small Head-and-Shoulders pattern over the last two months. Neckline support is set at 73, a break of which would confirm the pattern. The alternative pattern is a Symmetrical Triangle and a break above the right shoulder high would be bullish. Click this chart for a live image Read More 

Don't Ignore This Chart

Finance Sector Leads Market Lower

by Arthur Hill

Once again, it is the finance sector feeling the heat from across the pond. This screenshot from the market summary page shows the nine sectors, and all are in the red. In afternoon trading on Thursday, XLF is the only one with a loss greater than 3%. Obviously, the banks have a lot riding on a successful outcome in Europe. Click this chart for a live image Read More 

Don't Ignore This Chart

Broadcom Forms Bullish Engulfing on Good Volume

by Arthur Hill

Broadcom (BRCM) came across the bullish engulfing scan on Wednesday. After becoming oversold with a sharp decline in November, the stock firmed the last two weeks and formed a bullish engulfing on Wednesday. This white candlestick completely engulfed the prior black candlestick. Volume was also above average. Follow through above the early December high would confirm the pattern. Click this chart for a live image Read More 

Don't Ignore This Chart

Home Construction iShares Leads with a Breakout

by Arthur Hill

The Home Construction iShares (ITB) is one of the strongest industry group ETFs in the market right now. The chart below shows ITB breaking above its mid-November high with a surge the last few days. In the indicator window, the Price Relative confirms relative strength with a move to its highest level since mid July. Click this chart for a live image Read More 

Don't Ignore This Chart

A Double Island Reversal for the Finance SPDR

by Arthur Hill

With a gap up on Monday and another on Wednesday, the Finance SPDR (XLF) formed two island reversals over the last three weeks. The first island formed on Friday-Monday (red circle). The second island formed from 21 to 29 November (blue oval). Notice the gaps on either side of these islands. Click this chart for a live image Read More 

Don't Ignore This Chart

Watson Pharma Forms Monster Bearish Engulfing Patterm

by Arthur Hill

Even though the market moved sharply higher on Wednesday, Watson Pharma could not hold its early gain and closed weak. Wednesday’s black/filled candlestick completely engulfed the prior white/hollow candlestick to form a bearish engulfing. Also notice that volume surged. You can read more on candlesticks in our ChartSchool. Click this chart for a live image Read More