Don't Ignore This Chart

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Finance Leads Lower in May - Utilities Hold Up Best

The S&P Sector PerfChart shows the percentage change for the nine sector SPDRs and the S&P 500 for the month of May. Eight of nine sectors are down with finance leading the day (down around 10%). The utilities sector sports the only gain as investors moved into this defensive sector for yield and safety.

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Dean Foods (DF) is Really Milking It Right Now

Has anyone else noticed how well Dean Foods (DF) has been doing recently?

DF

DF has had a top SCTR score for a while now and it continues to move higher.  Don't forget to check the SCTR pages frequently to find similarly strong stocks.

Extra members should also try incorporating SCTR scores into their technical scans.  For example:

[today's SCTR.sp5 > yesterday's max(20, SCTR.sp5)]

This scan finds all of the S&P 500 stocks whose SCTR ranking is higher today than it has been during the past 20 days.  In other words it shows you the "up and comers" of the Large Caps.  Enjoy!

- Chip

P.S. Creating the chart above is pretty easy.  Starting from a default SharpChart of DF, it only took me 7 mouse clicks.  Let me know if you can beat that number - I bet someone can...

Columbia Sportswear Forms Bearish Engulfing Near Resistance Zone

After a rise the last three weeks, COLM hit a pocket of selling pressure and formed a bearish engulfing just below its April highs. This pattern formed even as the S&P 500 closed higher. Also notice that downside volume has consistently outpaced upside volume since late April. The bearish engulfing in COLM was found on the predefined scans page, which is undated throughout the day.

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Alcoa Gaps Off Support

After returning all the way to the December lows in May, Alcoa (AA) firmed last week and started this week with a gap higher. There is some support here, but the trend since early February is down and this gap is on low volume (so far).

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Dollar and Treasuries Lead as Gold and Oil Lag

This chart cover the recent shift to risk-off. The US Dollar Index ($USD) and the 30-Year US Treasury ($USB) are leading over the last six months as both trade near six month highs. Spot Gold ($GOLD) and Spot Light Crude ($WTIC) are lagging as both trade near six month lows. The S&P 500 is somewhere in the middle, trying to make up its mind. Should this risk-off trend continue, $SPX is likely to join oil and gold at the bottom of this chart.

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Airline Index Leads Industry Groups with Big Move

The image below shows the Market Summary Market Carpet zoomed in on the industry groups. (Note: click the heading to zoom in on a ground). Right away the Amex Airline Index ($XAL) stands out with a dark green square. This means it is leading with the biggest gains. On the individual charts, note that LUV is broke out today and DAL is close to a 52-week high.

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Gold SPDR Fails To Hold Gains and Challenges Support

The Gold SPDR (GLD) gave back last week’s gain with a sharp decline the last three days and is on the verge of breaking support. The next support zone resides in the 135-138 area. Gold remains hostage to the falling Euro as the Euro Currency Trust (FXE) fell to its lowest level since summer 2010.

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AT&T, Disney, Pfizer, Wal-mart and Verizon Show Relative Strength within the Dow

A review of the CandleGlance charts for the thirty Dow stocks shows only five components trading above their 20-day and 50-day moving averages: AT&T, Disney, Pfizer, Wal-mart and Verizon. Four of these five can be considered defensive stocks that hold up well during times of uncertainty.

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 Click this image to see all 30 Dow stocks. 

Apple Forms Spinning Top on High Volume

Apple suffered its biggest six week decline since 2008, but signs of firmness emerged as the stock formed a spinning top at the end of last week. Spinning tops represent indecision that can sometimes foreshadow a reversal. Also note that this candlestick formed with high volume. A move above Thursday’s high would complete a short-term reversal. It would take a move above 580 to forge a medium-term reversal.

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30-year Treasury Yield Breaks Wedge Support

The 30-year Treasury Yield ($TYX) broke down with a sharp decline the last few weeks. This puts the yield near its 2011 lows and within striking distance of its 2008 lows, scene of the last crisis and flight to safety. Notice that treasury yields and the S&P 500 are positively correlated because the 26-week Correlation Coefficient has mostly positive the last five years.

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Gold and Treasuries Reverse Negative Correlation with Joint Surge

The Gold SPDR (GLD) and the 20+ Year T-Bond ETF (TLT) have been negatively this month. Notice how TLT advanced from 116 to 123.5 and GLD declined from 161 to 150 the prior 11 days. This negative correlation changed today as both surged higher. TLT is up over 1% and GLD is up over 2%. Gold may be regaining its safe haven status.

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May-hem in the Markets with all Sectors Lower this Month

May has been nothing but mayhem for the market as all nine sectors moved lower. The PerfChart below shows the percentage change since May 1st. Over the last 11 trading days, the Finance SPDR (XLF), Energy SPDR (XLE) and Basic Materials SPDR (XLB) are leading the market lower. The three defensive sectors (XLU, XLP, XLV) are holding up the best.

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A Bollinger Band Squeeze for Google

After a big decline in April, Google ($GOOG) consolidated the last few weeks and the Bollinger Bands narrowed significantly. This could be called a Bollinger Band squeeze or volatility squeeze. The next directional signal depends on the band break. A move above the upper band would be bullish, while a move below the lower band would be bearish.

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Activision Gaps up on Big Volume $ATVI

Stocks were under pressure the last three days, but ATVI bucked the trend with an advance and gap on high volume. This gap off support is bullish as long as it holds. Resistance at 13 marks the next challenge.

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Consumer staples stock Heinz Hits 52-week High with Breakout $HNZ

The Consumer Staples SPDR (XLP) remains one of the strongest sectors and Heinze is part of that strength with an ascending triangle breakout. With a surge the last two weeks, the stock broke above its January-February highs and entered uncharted territory. Relative strength in consumer staples stocks shows a preference for defense.

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May Starts out as a Big Risk Off Month for Intemarket PerfChart

The PerfChart below shows the percentage change for seven intermarket ETFs. The three risk assets (stocks, oil, euro) are down, while the three safe havens are up (dollar, treasuries). Gold is going against the Dollar and along with the stock market. 

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Most Active Lists Show Mixed Market on Monday with Some Bullish Candlestick Patterns

Even though stocks opened lower on Monday, market action quickly turned mixed, as evidenced on the most active tables for the Nasdaq and NYSE. Chartists can see the intraday action by clicking the CandleGlance links. BAC has a bullish engulfing working and Pfizer has an inverted hammer working on Monday.
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Sector Carpet Shows a Sea of Red and a Few Stocks Bucking the Trend

Stocks were down sharply in early trading on Friday with the energy sector showing the most red in the Sector Carpet. There are, however, usually a few stocks bucking the trend and these can be found by looking for the isolated patches of green. Notice Micron (MU), Flour (FLR) and Visa (V).

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Rising Wedge Threatens Island Reversal in the Basic Materials SPDR

The Basic Materials SPDR (XLB) reversed higher last week with an island reversal, but stalled over the last 4-5 days and a rising wedge is taking shape. For now, the gap and island reversal dominate the chart. A move below 36 would fill this gap and break the wedge trendline. This would negate the island reversal and reverse the short-term uptrend.

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FirstTrust Internet ETF Gaps above Wedge Resistance

The FirstTrust Internet ETF (FDN) broke out with a gap last week and that gap is holding. Mind that gap! The gap is bullish as long as it holds. Also notice that FDN broke resistance from the mid April highs and the Price Relative broke the trendline extending down from late March.

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Home Construction iShares Hits 52-week High and Components Follow Suit

The Home Construction iShares (ITB) is leading the market higher again with a fresh 52-week high this week. The chart below also shows the Price Relative (ITB:SPY ratio) hitting a new high. Below this chart is a snapshot from today’s new high list. A sort by industry group shows nine home builders hitting 52-week highs.

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