Don't Ignore This Chart

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Mind the Gap on Cisco

After a corrective decline the last few weeks, Cisco (CSCO) firmed on Wednesday with a small hammer and then surged above the wedge trend line with a gap on Friday. The gap-breakout is bullish until proven otherwise with a decline back below 18.25

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PC Related Stocks are Having a Tough Time on the PerfChart

The PerfChart below shows three month performance for two chip makers (Intel and AMD), two PC-related companies (Dell and Hewlett Packard) and mister softy (Microsoft). Only Microsoft is up during this period, and just barely. The others are having a really difficult time, even with the S&P 500 up almost 10% during this time. Apple, the un-PC, is faring much better with a large gain.

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Metals & Mining SPDR Forms Spinning Top At Broken Resistance

The battle for the breakout is on as the Metals & Mining SPDR (XME) declined to broken resistance and formed a big spinning top. These candlesticks show serious indecision. XME broke resistance in early September and is now trying to decide if this breakout is worth holding or not. Watch 44 up and 41.9 down for the next directional clue.

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Gold Miners Junior forms Gap-Doji-Gap Reversal

After a big run from late July to mid September, the Junior Gold Miners ETF (GDXJ) formed a bearish candlestick reversal over the last 4-5 days. First, there was the gap and doji. This signaled sudden indecision after a big jump. Second, selling pressure followed this indecision as the ETF gapped down and closed weak to form a long black candlestick. Thought not picture perfect, this pattern resembles a bearish evening doji star

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SPY Forms Bearish Meeting Lines Candlestick Pattern

The S&P 500 ETF (SPY) formed a rare bearish candlestick reversal pattern over the last two days. The Bearish Meeting Lines pattern forms with a white candlestick and a black candlestick that have relatively equal closes. In particular, the black candlestick reflects a strong open and a weak close. A move below the white candlestick low would confirm this pattern.

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Pulte Group Shows the Power of StockCharts' SCTRs - $PHM

When we debuted our StockCharts Technical Rankings (SCTRs) back in November of last year, little did we know that the strongest stock for most of 2012 was just completing its turnaround.  Check out this chart of PHM and its historical SCTR line:

Phm

This is another b-i-g chart, you may need to click it once or twice to get the full effect (or just click here for a live version).  Pulte's continued strength is both technically impressive and economically promising.  It has spent more time at 99.9 on our SCTR charts than any other stock so far.

- Chip

Dow Transports Tests Major Support Level and Dow Theory

The Dow Transports surged to resistance last week and plunged to support this week. Overall, the junior Average has been stuck in a trading range since mid June with support at 4900 and resistance around 5250. A break below 4900 would be clearly bearish for the Average and negative for Dow Theory.

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Stocks and Commodities Show Strong Positive Correlation

The S&P 500 ETF (SPY) and the Commodity Index Fund ($DBC) have been positively correlated for almost all of the last 12 months. As the indicator window shows, the Correlation Coefficient (SPY,DBC) dipped into negative territory only twice and spent most of the time above .50. The red dashed line shows SPY and the bar chart shows DBC moving together as well.

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Oversold XLU Triggers Triple Bottom Breakdown on P&F Chart

The Utilities SPDR (XLU) is by far the weakest of the nine sector SPDRs right now. The P&F chart below uses daily price data and each box is valued at .30%. The ETF broke the Bullish Support Line in August, consolidated and then broke below the prior two O-Columns with this week. You can read more on PnF charts in our ChartSchool.

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Norfolk Southern Falls Sharply From Resistance

Norfolk Southern (NSC) is a railroad company and a key part of the Dow Transports. The chart below shows NSC hitting resistance around 75 and falling over 1% today. Notice that MACD barely made it back in positive territory on the last bounce. Another downturn from here would surely turn momentum bearish.

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Eight of Nine Sector Bullish Percent Indices are Trending Higher

The Bullish Percent Index (BPI) shows the percentage of stocks on Point & Figure buy signals within a specific group. Even though bulls have the edge when the BPI is above 50%, chartists also need to watch the direction of the BPI. The image below shows six sector BPI charts in CandleGlance form. All six are above 50%, but the Utilities Bullish% Index ($BPUTIL) has been trending down since early August.

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Several 52-week Highs Grace the Technical Alerts Page

StocksCharts.com has a new technical alerts page that shows key milestones for dozens of ETFs and indices. On Thursday, September 13th, note that 10 securities recorded new 52-week highs. These include the Nasdaq, Russell 2000, Dow, S&P 500 and six sector SPDRs.

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Semiconductor ETF Tests Two Key Moving Averages SMH

After a big surge above 33, the Market Vectors Semiconductor ETF (SMH) peaked in mid August and declined back to support in the 32.50 area. Support here stems form broken resistance, the rising 200-day SMA and the rising 50-day SMA. A successful test and break above 33 would be bullish. Failure to bounce and a break below 32 would be bearish.

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Coffee Surges off Support with Big Move

The chart in the main window shows December Coffee Futures ($KCZ12) finding support above the June low and surging above the late August high. The indicator window shows the Coffee ETN (JO) with a similar pattern. These breakouts are bullish as long they hold. A move back below the breakout levels would call for a reassessment.

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Dow Challenges Spring Highs on 30pt Point & Figure Chart

The P&F chart below shows the Dow Industrials using 30 points per box and a three box reversal method. With the August dip and September surge, the Dow is challenging the prior highs and tracing out a large inverse head-and-shoulders pattern. A break above these highs opens the door to even higher prices.

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Arch Coal Leads Resurgent Coal Group

The coal group has been one of the worse performers this year, but coal stocks moved sharply higher the last two days. Arch Coal (ACI) is showing some signs of life with a falling wedge breakout on three days of good volume. The July-August highs mark the next resistance zone in the 7.75 area.

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Sandisk and Micron Light Up the Tech Sector

The technology sector is lighting up the market carpet with a sea of green. Notice that memory makers Sandisk (SNDK) and Micron (MU) are leading the charge. Both gapped higher on their price charts. Hard-disk maker Seagate (STX) is the only loser in this group.

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Ford Breaks Out as MACD Crosses above its Signal Line

Ford (F) came across the bullish MACD scan as the MACD line moved above its signal line (9-day EMA of MACD). On the price chart, F formed a falling wedge at the end of August and broke wedge resistance with a surge the last three days. The late August low becomes key support.

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Aroon Crosses Bearish for the Industrials SPDR

The Industrials SPDR (XLI) is under pressure today after a weak manufacturing report. The chart below shows XLI falling to a support zone marked by broken resistance and the June trend line. This sets up an important test because the Aroon down crossed above Aroon green and hit +100 for the first time since June 4th.

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