Don't Ignore This Chart

September 2014

Don't Ignore This Chart

The $VIX Still Says Business As Usual

by Greg Schnell

The $VIX chart says its business as usual out there. I have a lot of signals that say the interim top is in. The main signals would be the breadth charts but the $VIX is always considered the fear index. I don't trust the $VIX as much as it is traded as an investment vehicle and it affects the price of options. However, the fear index is suggesting you continue on. Nothing new to see here. I would suggest it is in a zone of interest more than an actual signal one way or the other currently. Let's review the chart. Because the actual data is so spiky Read More 

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The Smaller They are, the Harder They Fall

by Arthur Hill

September is been rather unkind to mid-caps, small-caps and micro-caps, but large-caps and large-cap techs are holding up ok. The PerfChart below shows the Dow Industrials with a small gain this month, the S&P 500 with a 1% loss and the Nasdaq 100 with a .71% loss. The situation then deteriorates as we move down in market-cap. The DJ Wilshire Micro-Cap Index is down the most with a 5.09% loss this month. Note: this PerfChart does not include data for today, 29-Sept. Click the image for a live PerfChart.  Read More 

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Consumer Cyclicals (XLY) Moves To An Important Decision Point

by Greg Schnell

The Consumer Cyclicals Sector ETF (XLY) is testing a very important level technically this week. The RSI uptrend line is being tested and has been in place since March 2014. The SCTR ranking is very interesting. The SCTR was in the top quartile almost all of 2013. This year it has spent very little time above the 75% level.  As it slowly climbs up to this 70 level, it is important to watch. If it has enough momentum to become a top quartile stock, we will probably see more buying as it really starts to outperform. Until that point in time, it looks weak to me. The price action in Read More 

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Highest Priced Dow Stock Weighs with a Breakdown

by Arthur Hill

The Dow Jones Industrial Average is a price-weighted average and this means the stocks with the highest prices carry the most weight. Visa (V) is the highest priced Dow stock and it was down around 1.5% at midday, thus weighing on the Dow today. The chart below shows Visa breaking support and MACD moving below its signal line. Also note that this move comes after the July gap and break down, which means we are seeing a continuation of the summer break down.  Read More 

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Perrigo Follows Up on Massive Hammer

by Arthur Hill

Perrigo (PRGO), which is part of the healthcare sector, formed a massive hammer in mid September and followed up on this candlestick reversal with a break above the wedge trend line. Also notice that MACD moved above its signal line and turned positive.  Read More 

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Amazon Is The 800 Pound Gorilla But It Needs The Next Vine

by Greg Schnell

Amazon. One of the largest, most used, unprofitable companies in the internet space. Almost every fundamental metric has failed to hold the stock in reality. It has had a P/E for years with a negative denominator. Technically, Amazon has been equally as hard. The uptrends continue, lots of divergences appear, but the long term trend holds. Well, times they are a changin'. The chart currently looks to be at one of the most important decision points in the last 5 years. Its SCTR ranking is only 15 which is shockingly low between the back to School, Thanksgiving and Christmas Read More 

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Finding Some Green in a Sea of Red

by Arthur Hill

Stocks are down pretty much across the board on Monday, but there are some pockets of green and chartists can find these stocks using the Sector Market Carpet. The image below highlights ten stocks that are bucking the selling pressure and showing relative strength in a down market. Notice the pockets of strength in the healthcare and consumer staples sectors, which are defensive sectors. Charting Note: hover over the carpet and right click to see different viewing options and settings.  Read More 

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Rite Aid Pharmacy Generates Headaches For Shareholders

by Greg Schnell

Rite Aid Pharmacy (RAD) changed its shareholder medication this week. The pharmacy chain moved up 900% in 18 months delivering happiness to the shareholders. That move up topped out in May. Since then, the pharmacy lost almost 50% of the gain. This week the headache was confirmed when the stock could not stay near the 40 WMA and lost 18%. Rules based trading can help newer investors. When the trend in the purple relative strength was broken at point #1, it may have encouraged a swing trader to exit at least part of the position. This stock was just being Read More 

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Schwab Leads Broker-Dealer iShares to New High

by Arthur Hill

The Broker-Dealer iShares (IAI) is showing leadership over the last few weeks with a surge above its March highs. Notice that the ETF is up around 10% from its early August low. Within the group, Charles Schwab (SCHW) is leading with a new high in late August and further strength this month. Etrade and TD Ameritrade are playing catch up with big moves the last two months. Strength in the brokers is positive for the market overall.  Read More 

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Would a Russell 2000 Death Cross Really be Bad?

by Arthur Hill

There is a lot of talk of an "impending" death cross for the Russell 2000. This event occurs when the 50-day simple moving average crosses below the 200-day SMA. While this event has triggered a couple of good signals over the last 20 years, the majority of signals have not been very good. The chart below shows these two moving averages in the main window and the Russell 2000 in the lower window. There were two bogus death crosses in the run up to the 1998 peak and three bogus crosses in the run up to the 2007 peak. We have seen two death crosses since 2010 and neither resulted in a major Read More 

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Energy and Pharma Stocks Lift the Dow

by Arthur Hill

The Dow Industrials is bucking the selling pressure with strength in Chevron, Pfizer, Travellers, Procter & Gamble and Home Depot (among others). Chartists can easily spot the winners and losers on a Market Carpet. The chart below shows at least ten green squares, which means these ten are up. There is some red, but the green is outpacing the red for now. The top gainers and losers can be seen in the table on the right. You can learn more on Market Carpets with our videos.  Click this image for a live carpet Read More 

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$SILVER Sits On Important Support

by Greg Schnell

Silver ($SILVER) collapsed this week to the same level where support has been found before. The $18.61 level is critical for $SILVER. There is a small chance at $18.17 to find support but Silver needs to get up and go from here.  The role of the $USD has been discussed many times in applying pressure to the commodities. Without question, the last 8 weeks have been rough for the $SILVER metal. This week, $SILVER did go as low as $18.45 but bounced to close at $18.62. Consensus is very one sided on both the dollar long and $Silver short. Eventually Read More 

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The Long Bond ETF (TLT) Changes Character

by Greg Schnell

The long Bond ETF (TLT) has changed its character this week. We can see in Early September, the SCTR fell below the top quartile reading of 75. The Purple trend line on the relatives strength to $SPX has been broken. So both of those are concerning. The MACD is dropping below the zero line which looks quite ominous. The big signal today is the price. It broke the uptrend line. The RSI at the bottom is weaker than it was when the ETF made its final low. Good trading, Greg Schnell, CMT Read More 

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General Electric Gets a Squeeze

by Arthur Hill

Trading in General Electric (GE) has slowed over the last two weeks and the Bollinger Bands have contracted to their narrowest since early July. The indicator window confirms this volatility contraction as BandWidth dipped below 3 again. Chartists should now prepare for a volatility expansion and a decisive break. Watch 26.4 up and 25.7 down. You can read more about Bollinger Bands and band-related signals in our ChartSchool.  Click this image for a live page Read More 

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SCTR Surges for the Networking iShares

by Arthur Hill

The Networking iShares (IGN) is making a move over the last few weeks and the StockCharts Technical Rank (SCTR) surged above 50 this week. The chart shows IGN with a big triangle forming since March. A break above triangle resistance would signal a continuation of the prior advance, which was from 29.5 to 36. The indicator window shows the StockCharts Technical Rank (SCTR) breaking above 50 for the first time since early July. You can read more about  SCTRs in our ChartSchool.  Click this image for a live page Read More 

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Nike (NKE) Makes A Move

by Greg Schnell

The battle for sports jerseys is always a big deal. Its an even bigger deal with the World Cup in 2014. Nike (NKE) is interesting because the stock was relatively static leading into the World Cup in Brazil. Now it has broken above a 10 month consolidation with average volume. As a large cap stock Nike is trying to push into the top quartile on the SCTR. You can see the stock lapsed when it fell below the top quartile back in December. With a nice breakout last week and a close near the highs of the week, NKE hit another high today.  The volume has been Read More 

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Spot Silver Forms Large Continuation Pattern

by Arthur Hill

The chart below shows Spot Silver ($SILVER) consolidating after a sharp decline. Notice that the metal fell from 35 to 19 and then traded flat from June 2013 until now. With lower highs taking shape, a descending triangle has formed and this is a bearish continuation pattern. A break below support would signal a continuation lower and project a 26% decline from the support break. Chartists can mark resistance at 22.  Click this image for a live page Read More 

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Technical Ranks Jump for Southern Peru Copper and the Base Metals ETF

by Arthur Hill

StockCharts users can find the market movers and shakers by checking the SCTR tables on our home page. Click the top up or top down tabs to see securities that show the biggest gains or losses in relative strength. As the table below shows, the StockCharts Technical Ranks (SCTR) for Southern Peru Copper (SCCO) and the Base Metals ETF (DBB) jumped over 20 points. This makes sense because copper accounts for one third of DBB. Users can click on any of the symbols to see a SharpChart or use the CandleGlance link to see all ten charts.  Click this image for Read More 

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Starbucks Shows Relative and Absolute Weakness

by Arthur Hill

The S&P 500 is up around over 4 percent the last four weeks, but Starbucks is underperforming and is barely positive over the same timeframe. In fact, SBUX is well below its July high and recently broke wedge support. The indicator window shows momentum deteriorating as MACD moves below its signal line and approaches negative territory.  Read More 

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Google (GOOGL) Holds Its Own

by Greg Schnell

Google (GOOGL) has been holding a PnF support trend above the normal PnF major support trend. Google is currently on a sell signal because it has made a lower low than the $580 level. Since breaking below $580, Google has bounced back up and back down. It is oscillating into a narrowing pennant. However, if we look at the longer trend, Google appears to like this support level higher than the standard trend line calculated by the PnF engine. Because it is on a lower low and has been unable to make higher highs, Google has a bearish target. It would take a break above the last column of Read More