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CVR Refining Shows Relative Strength and Chart Strength

by Arthur Hill

Stocks were hit hard in mid August with the S&P 500 and many stocks plunging below their spring-summer lows. This means stocks that held their summer lows are by definition showing relative chart strength because they did not break a key level. The chart below shows CVR Refining (CVRR) hitting a new high for 2015 and then falling back towards the July lows. These lows held as the stock bounced last week with a surge above 19. This bounce off support is quite positive and the August highs are the next challenge. The indicator window shows the SCTR breaking out in July and hitting a new Read More 

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Facebook (FB) One To Watch This Week

by Tom Bowley

Facebook (FB), like so many internet stocks, performs its best during the month of September.  There's not much of a sample size with FB since it went public just a little more than 3 years ago.  However, during its last 3 Septembers, FB has averaged gaining 15.7% during the month and this seasonality strength is supported by the fact that the Dow Jones U.S. Internet Index ($DJUSNS) is the best performing industry group in September over the last 15 years, with an average September gain of nearly 5%.  The only month that internet stocks perform better than September is Read More 

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The Moribund Metals And Mining Makes A Move - XME

by Greg Schnell

The Metals and Mining ETF (XME) has been melted down for scrap. Websters defines "Moribund" as: no longer active or effective : close to failure. : very sick : close to death While the chart couldn't look more moribund, this week it kicked up and showed a gasp of life. The SCTR is still near death at 2.6. The Relative Strength trend shown in purple is still weak but it is making one month highs today. The price has broken out from a long downtrend and the MACD in the lower panel is showing some positive divergence. The price is still short of one month highs. Read More 

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Bulls' First Test: FAIL

by Tom Bowley

While we cannot rule out the possibility of a sustained advance to clear technical hurdles, the first attempt today was an epic fail at or just below a critical short-term resistance zone.  Given the high volume selling over the past 7-10 days and loss of key price support levels and MACD centerline support, the first critical test - in my opinion - is the area of price resistance and the falling 20 day EMA.  In the case of the NASDAQ, key gap resistance resides at 4800, while price resistance is closer to 4900 and the now-declining 20 day EMA just below 4900.  We've Read More 

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SCTRs Surge for Non-Stock ETFs (Yen, Euro, Volatility, Gold and Bonds)

by Arthur Hill

There has been a big changing of the guard over the last few weeks as stock alternatives gained in relative rankings. The table below shows the StockCharts Technical Rank (SCTR) for our ETF universe, which excludes inverse and leveraged ETFs. It is sorted by the one-week change for the SCTR. I took the liberty of drawing a red line through some of the low volume ETFs. Even though these are ETFs, the leadership group is sending a clear message. Stocks went out of favor. Volatility, some currencies, bonds and gold moved in to favor. Volatility spiked and I will show a chart for the Citi Read More 

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TLT and GLD gap down

by Greg Schnell

Two areas associated with protection are the TLT, the long bond ETF and GLD, the GOLD ETF. This morning, both are gapping down. It will be worth watching to see if the market can break out here as this does look like a potential interim bottom. If this cannot get a bid, investors are probably moving into more aggressive areas of the market. It's a place to watch for the reversal to be confirmed. In volatile times, the reversals are vicious both ways. Today, TLT is making 10 day lows so let's not get too ahead of ourselves. One month lows would be Read More 

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Massive Hollow Red Hammers Taking Shape

by Arthur Hill

Stocks opened weak, plunged after the open and then recovered around midday. The Dow dipped below 15500 in the morning and then moved back to the 16200 area by noon ET. The opening gap, deep dip and recovery mean that several stocks could form big hammers today. These are short-term candlestick reversal patterns that form with a small body at the top of the high-low range. The example below shows Pfizer (PFE) with an opening gap below 33, a morning dip below 29 and a current price near 32.90. The body of the candlestick represents the open-close range. It is hollow because the current Read More 

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When Technical Support Breaks Down - The $SPX Goes Splat!

by Greg Schnell

The selling was broad based across the market today. This market had a lot of issues regarding the number of stocks holding the market up. With breadth thinning every week, it appeared to be a matter of time before the market would have a larger pullback. The size of the intraday move yesterday and today indicates that the large institutions were selling this pull back.  While this chart may bounce off support on Monday, the three lines above the current level will be important tests of resistance. The 2000 level was a good support/resistance level on Read More 

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Can Apple (AAPL) Save Computer Hardware?

by Tom Bowley

The Dow Jones U.S. Computer Hardware Index ($DJUSCR) is testing significant price support created by the breakout in the fourth quarter of 2014 and the subsequent retracement back to that level just three months later.  Recent weakness in Apple (AAPL) shares, along with other computer hardware stocks, has this index looking vulnerable to a much bigger selloff if price support is lost.  Trendline support has been lost, MACD centerline support has been lost, relative trendline support vs. the S&P 500 has been lost and now price support is being tested.  What's perhaps Read More 

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Yes, Virginia, there Really Is Information in Stock Prices

by Arthur Hill

Just ask HD and WMT. These two big retail stocks are part of the Dow Industrials and the S&P 500. Despite a common industry group, the performance for these two stocks could not be any more different. The chart below shows year-to-date performance for Home Depot (HD) and Wal-Mart (WMT). One is up around 18% and the other is down around 18%. Note that Chartists can create a performance SharpChart by entering two or more comma-separated symbols in the symbol entry box. We'll look at these charts individually after the jump.  Wal-Mart Read More 

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One Airline Keeps Climbing Higher. Who Is It?

by Greg Schnell

The airline Industry group pulled back quite hard in the second quarter. However one airline company bucked the trend and forgot to pullback. JetBlue (JBLU) just keeps on climbing bottom left to top right. A steady ascent is a comfortable ride for investors as well. As long as JBLU continues to outperform the market, this has all the traits of flying at 38000 feet. Smooth and comfortable. It also continues to outperform its peers which is an even bigger accolade in a tough business. We can see the SCTR at the top of the chart does a good job holding up to the flight plan. If I have one Read More 

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Amgen Returns to the Scene of the Crime

by Arthur Hill

Amgen (AMGN), a big biopharma stock, broke out with expanding volume in July and hit a new 52-week high. After becoming short-term overbought, the stock fell back to the breakout zone. There are two things to note here. First, broken resistance turns into the first support zone. Second, a pullback to a resistance breakout is known as a "throwback". It is viewed as a test of the breakout, and a strong breakout should hold. The stock is showing signs of support with two bullish engulfing patterns in the last five trading days. Look for a follow through break above 171 to confirm the bullish Read More 

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Priceline.com (PCLN) Fills Gap, Confirms Bullish Pattern

by Tom Bowley

After its latest quarterly earnings report, traders rushed into priceline.com (PCLN) as it surged nearly 100 dollars from 1283.99 to 1382.61 on a post-earnings gap.  Patient traders, however, have seen PCLN return to its pre-earnings level as it closed on Friday at 1283.80 just seven trading days later.  Perhaps the better news is that PCLN broke out of an inverse head & shoulders pattern on its weekly chart and recent weakness has provided a potential retest of the breakout level.  The selling has also helped to unwind overbought oscillators on its daily chart (only Read More 

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The Banking Index Starts To Underperform

by Greg Schnell

The Banking Index (KBE) has been on a pretty good run, but recently a few things have happened. While the SCTR ranking remains high, the KBE has started to underperform in Relative Strength shown in purple. Looking at price, we have broken the up trend this week. While the MACD has pulled back to the zero line, we can see the loss of momentum in the price action as well.  The Banking Index had been rising with an expectation of the Fed starting to raise rates. Lately, there have been some questions as to whether or not they can move in September. This Index Read More 

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Home Construction Stocks Hitting Fresh Highs; DHI Leads

by Tom Bowley

The stock market looks ahead and based on the latest breakout in home construction stocks ($DJUSHB), apparently traders like what they see on the horizon.  The 10 year treasury yield ($TNX) held key support and is bouncing.  Proceeds from the sale of treasuries seems to be finding a "home" in the DJUSHB.  We spent more than a year consolidating in a bullish ascending triangle pattern, then broke out with a measurement to 710.  Today's breakout above 600 will likely provide the impetus for another leg higher in the DJUSHB.  Also reflected on the chart below is Read More 

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Two Sectors and a Few Stocks Bucking the Selling

by Arthur Hill

The major stock indices were hit with selling pressure on Wednesday, but two sectors and a few stocks bucked the selling and moved higher. How can we find these? Chartists can use the Sector MarketCarpet to easily spot the gainers because they are green and stick out like a sore thumb. The image below shows strength in the utilities and energy sectors today. These are the two boxes with the most green (bottom). In addition to these sectors, CF Industries (CF), Newmont (NEM), Computer Sciences (CSC), Intel (INTC) and HCP (HCP) are up.  Read More 

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The Chinese Yuan Makes A Power Move

by Greg Schnell

China has been moving the Yuan Currency around over the last few years. Here are the remarks I have on the Shanghai ($SSEC) chart about the Yuan. These are the only extreme ones I noted watching the markets. Shortly after widening the range back in 2012, the Yuan fell 2% over a few months. In 2014 The Yuan was dropped 0.6%. This week's move for the Yuan was a big one at 2.0%. Here is what the 2% move in the Yuan looks like today. The CYB chart does not show a big 1-week move associated with February 25, 2014. However, the currency continued to weaken Read More 

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Texas Instruments Leads Semiconductor Rebound

by Arthur Hill

The Semiconductor SPDR (XSD) has been one of the weakest industry group ETFs within the technology sector over the last two months, and Texas Instruments (TXN) has been one of the weakest stocks in the group. That might be changing. The middle window on the chart below shows TXN relative to XSD using the price relative (TXN:XSD ratio). This ratio peaked at the beginning of December and fell until the middle of June as TXN underperformed. The ratio turned up over the last two months as TXN firmed and started outperforming XSD. Turning back to the price chart, note that TXN firmed in the 48 Read More 

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Correlation Tells Us To Ignore China

by Tom Bowley

I have been reading with much interest how the potential slowdown in China will be the next reason why the S&P 500 will tumble.  But by changing a few chart settings here at StockCharts.com, you can quickly visualize the correlation between the Chinese stock market and our own here in the U.S.  To be quite honest, there's been a history of little correlation between our two markets although recently the correlation has been more positive.  The correlation indicator ranges from +1 (strong correlation) to -1 (weak correlation).  Note from the chart below that the U.S Read More 

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Has Time Warner's Time In The Limelight Expired?

by Greg Schnell

The media stocks had a rough week. Time Warner (TWX) has been on a nice 6 year uptrend. But something happened this week that is very important. The stock broke meaningfully down from the trend line. The SCTR ranking was below 75 as the stock made new all time highs in early July. A high SCTR ranking is not a condition as you make new highs but the SCTR has not been able to become a top SCTR ranking in 2015. The price is down more than 10% in a month with most of that damage occurring this week.  While the stock went onto new highs, the MACD showed a Read More 

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Consumer Stocks Issuing A Short-Term Warning?

by Tom Bowley

In evaluating the likelihood of sustainable market rallies, one key relationship revolves around how consumer discretionary (XLY) stocks are performing vs. their consumer staples (XLP) counterparts.  The reason is fairly simple.  Consumer discretionary companies sell products that people WANT while consumer staples companies sell products that people NEED.  If the stock market looks ahead and sees a bright economic future, consumers tend to spend money on things they want.  So it's quite typical to see the S&P 500 moving higher with an XLY:XLP ratio that is Read More 

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Growth Whips Up on Value with the Usual Suspects to Blame

by Arthur Hill

The S&P 1500 can be divided into the S&P 500, S&P MidCap 400 and the S&P SmallCap 600. These three ETFs can be further divided into their growth and value components to create six different index styles (small-growth, small-value, mid-growth, mid-value, large-growth, large-value). It is usually preferable to see growth leading value because the growth end of the market represents stocks with higher risk. Growth stocks typically have higher PE ratios, higher Betas and more volatility. The market favors risk over safety when growth is leading value and this is net positive Read More 

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Has Baxter (BAX) Got Your Back?

by Greg Schnell

As one of the big healthcare suppliers, Baxter (BAX) is in one of the strongest sectors. We usually think of healthcare as a defensive sector, but the growth in Biotech and the aging of the original baby boomers have made the healthcare arena bullish in good times and bad. Within the group, the traditional defensive components have not ebbed as much when the equity market is riding a strong bullish theme. According to the SCTR ranking, Baxter was under performing or average at best and the stock price did spend the last 2.5 years consolidating in a range between Read More 

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Delta Leads as SCTRs Pop for Four Airline Stocks

by Arthur Hill

Stocks were mostly lower in afternoon trading, but a few airlines bucked the trend with gains and big moves in their StockCharts Technical Rank (SCTR). The table below shows the SCTRs for large-caps and the table is sorted by "change". Just click the column heading to sort. Notice that four of the top ten stocks are from the airline industry: Southwest Airlines (LUV), Delta Airlines (DAL), United Continental (UAL) and American Airlines (AAL). Delta is the strongest of the group overall because it has the highest SCTR (~70). On the DAL chart. the Read More 

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The Bulls Want Small Cap Leadership To Resume

by Tom Bowley

Advances in the stock market are much more bullish and likely more sustainable if small cap stocks are outperforming their large cap counterparts.  Over the past three years, we've seen very volatile relative action between the S&P 500 and Russell 2000.  During periods when the Russell 2000 has led, the stock market has performed much, much better.  To the contrary, when the large cap S&P 500 leads the way, gains seem to grind to a halt.  The following chart is a simple visual of how the S&P 500 performs (bottom half of the chart) based on the relative Read More