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When Someone Spills The Paint

by Greg Schnell

It has been a phenomenal run for Sherwin-Williams Co. (SHW). The 10-year chart has been a massive acceleration from bottom left to top right. Here is a link to the long chart. SHW 10 Year. Recently someone spilled a can of paint as the stock tumbled 25 % in a few months. Now a plummeting stock price is always worrisome, but recently SHW started to climb back. Thursday's candle jumped up and now the stock is apparently painting the profit picture green once again. With the MACD back above zero, a rising SCTR moving above 50, a historical track record of rising profits and Read More 

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GoPro (GPRO) - When The MACD Doesn't Work

by Tom Bowley

GPRO reported revenues and earnings that fell short of expectations after the bell last night and the reaction was about as you might expect - down 17% on the open.  It's since recovered and is attempting to print a significant red hollow candle on massive volume.  As a result, a strong finish could mark a short-term bottom.  But looking back, GPRO has shown a positive divergence on its MACD since mid-September with little bounce.  What's up with that?  Well, there's one general rule of mine with regard to the MACD and positive/negative divergences Read More 

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The Squeeze is on for the 30-yr Yield and TLT

by Arthur Hill

Treasury yields are in a clear downtrend since June, but a small anomaly is taking shape because the 30-year Treasury Yield ($UST30Y) did not confirm the lower low in the 10-year Treasury Yield ($UST10Y).  The first chart shows the 10-yr yield peaking around 2.5% and falling towards the 2% area in October. Actually, the yield hit the 2% area in late August and then edged below the August low in October. The trend here is clearly down with the 50-day EMA below the falling 200-day EMA. Also notice that the PPO(50,200,1) is negative. As the percentage difference between two EMAs, a Read More 

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Just When You Got Comfortable That Things Were Going To Be OK

by Greg Schnell

The market has given us some vicious reversals over the years from the 2009 lows.  Arthur covered off some internal indicators in yesterday's article where he was looking for strength to show up. Carl Swenlin wrote an article on the weekend that pointed to some internals softening. Click to read Carl's Article. A month ago, we were writing about a retest of the August lows and how important that would be. On October 3rd, I penned an article suggesting the 2060-2080 level would be very important either way as we bounced off the retest of the August lows. The title was ' Read More 

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NYSE Net New Highs Expand, but is it Enough?

by Arthur Hill

The percentage of NYSE net new highs remains at relatively low levels and chartists should watch this indicator for clues on follow through to the October surge. StockCharts users can plot new highs and new lows using SharpCharts. The first chart shows NYSE New 52-week Highs ($NYHGH) and NYSE New 52-week Lows ($NYLOW) as an "Up/Down Pair" indicator. Simply enter the two symbols separated by a comma in the parameter box ($NYHGH,$NYLOW). Chartists can plot the high-low differential by choosing "Price" as an indicator and separating the two symbols with a hyphen ($NYHGH-$NYLOW). There is a Read More 

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Priceline - Will It Be A Repeat Of Google And Amazon?

by Tom Bowley

I don't like to place bets into earnings reports, but priceline.com (PCLN) sure does look to be a replica of Amazon (AMZN) and Google (GOOGL).  AMZN and GOOGL both reported strong results in July and gapped significantly higher.  After pulling back for several weeks to fill their gaps, both stocks rallied just before their next earnings releases to challenge the July highs.  Then just before earnings, we saw minor selling episodes with both exploding higher as they easily surpassed Wall Street consensus estimates.  The same pattern has developed for PCLN Read More 

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Microsoft Launches Out Of The Satya Nadella Consolidation

by Greg Schnell

Microsoft reported outstanding earnings numbers yesterday and launched the stock near all-time highs this morning. After Satya Nadella took the floppy drive from Steve Ballmer on February 4, 2014, the stock ran up from $37 to $50. Since November 2014, the company stock has been range bound with a recent ceiling on the stock. The resistance of April to June 2014 became support once it broke through. Today broke through the 1-year Satya Nadella consolidation and support looks to be the $49 level now. In what could only be termed Read More 

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Let's Get Sirius - A Breakout Is Coming

by Tom Bowley

Sirius Satellite (SIRI) has been trying to clear the 4.00-4.10 resistance area for two years now.  This consolidation or basing period is very bullish since it follows a period of rising prices.  We need to see the breakout first, however.  SIRI reported its quarterly earnings and met Wall Street consensus estimates for earnings.  Revenues did exceed estimates and guidance was raised based on strong auto sales.  So the fundamental news supports higher prices, now we await technical breakout.  The next move higher could be powerful after this lengthy Read More 

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CH Robinson Leads Trucking as Heartland Bases

by Arthur Hill

It has been a rough year for trucking stocks and most of these stocks are lagging the broader market.  A look at the trucking stocks from the Sector Summary shows a handful with SCTRs above 50. The vast majority of SCTRs are 50.  The SCTR is the StockCharts Technical Rank (SCTR) and it ranges from zero to one hundred. Notable SCTRs include CH Robison (CHRW) at 78, YRC Worldwide (YRCW) at 58, Heartland (HTLD) at 58 and Landstar (LSTR) at 53. Con-way was not mentioned because it is a takeover candidate. CHRW is clearly the strongest of the group and the stock is currently trading Read More 

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Small-caps and Retailers Lag, but Semis Take the Lead

by Arthur Hill

It has been a rough two and a half months for the stock market with a major segment underperforming and one key industry group lagging.  Semiconductors, however, are emerging as leaders within the technology sector. The major index ETFs are all down since the end of July with the S&P 500 SPDR (SPY) losing around 3% and the Russell 2000 iShares (IWM) falling around 6%.  Small-caps are down much more than large-caps and this key segment is showing relative weakness. The Dow Diamonds (DIA) is down the least and holding up the best over this timeframe.  Read More 

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QCOM Rally Sets Up Shorting Opportunity

by Tom Bowley

Over the past three weeks, Qualcomm (QCOM) has rallied from a low of 52.17 to Friday's close at 59.91 - barely eclipsing the falling 20 week EMA currently at 59.78.  Has that 15% recovery signaled that the worst is over?  Or is this just the bounce before the next leg lower?  Technically, until conditions change, I'd favor the latter.  First, let's take a look at the chart and then I'll provide my thoughts: There's a lot on this chart, but let me quickly summarize.  At the bottom of the chart, you'll see the two lines pointing lower Read More 

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If Municipal Bond Funds Are Hitting Five Year Highs

by Greg Schnell

BlackRock runs a Municipal Bond Fund (MYI) that I follow. When these municipal bond funds are rallying to new 52 week highs, I interpret the leadership position as a defensive one, not an offensive one for the equities market generally. This one needs a little more work to analyze this week. This chart actually pushed through the previous intra-week highs and settled back a little bit, but this is the highest close. Back in 2012 when this topped out, the stock markets were starting the beginning of a new 3-year run. I did notice one thing on the chart that was very odd. This ETF had Read More 

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Biotech Rallies But Resistance Ahead

by Tom Bowley

The technical conditions surrounding biotechs ($DJUSBT) are bad, no sugar-coating here.  It's not pictured below but the DJUSBT did manage to clear 20 day EMA resistance on today's close.  However, I'm more concerned with the longer-term weekly charts where we've seen heavy volume selling, a death cross and an ugly MACD.  All of these technical issues developed AFTER a long-term negative divergence printed on the weekly chart over the summer months.  That was our warning.  Is there more room for a bounce?  Certainly, but I'd be careful assuming that this group Read More 

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Small Caps and Large Techs Are Lagging

by Arthur Hill

Price action has been rather volatile since the August breakdown, but some performance discrepancies are emerging in October and these could foreshadow broad market weakness. The chart below shows the Russell 2000, S&P 500, Nasdaq 100 and Dow Industrials, all on one chart for easy comparison. First, notice that the S&P 500 and Dow Industrials formed higher lows and higher highs from late August to mid October. These two have slight uptrends at work with rising channels taking shape the last two months.  In contrast to the S&P 500 and Dow Read More 

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When Banks Can't Keep Up

by Greg Schnell

The earnings reports from companies roll out in earnest this week and the banks are one of the largest question marks. This performance chart shows all the major banks and brokers underperforming the $SPX since the test of the May high failed in June. This creates a defensive posture and the banks will need to change this trend if we are going to see better price action in the Indices.  JP Morgan (JPM) kicks it off tonight. Note that Goldman Sachs (GS) and Morgan Stanley (MS) have underperformed the large banks. This will add increased scrutiny to Read More 

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Delta and SouthWest Go For Breakouts

by Arthur Hill

Airline stocks are on the move Monday with nice gains across the board. Hawaiian Airlines (HA) and Skywest (SKYW) are leading the way with breakouts and 52-week highs today. These two have the highest StockCharts Technical Rank (SCTR) of the group and are clearly the strongest of the pack. There are also a few interesting chart patterns at work and today we will look at Delta and SouthWest. The first chart shows DAL surging from October to January and then correcting with a falling channel into July. DAL broke out of channel in August and showed improved relative strength as the SCTR moved Read More 

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Internet Group Poised For Higher Prices

by Tom Bowley

The long-term pattern is bullish.  Short-term technical conditions are improving.  And the season is right as October is the best calendar month of the year in terms of historical performance for internet stocks.  The Dow Jones U.S. Internet Index ($DJUSNS) looks poised for another explosion to the upside.  We'll soon find out as key earnings will be released on several companies in this space.  Below is a long-term weekly chart on the DJUSNS, with charts of Alphabet (GOOGL) and Akamai (AKAM) also featured.  Both GOOGL and AKAM are well positioned Read More 

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Shaking Up Coke (KO), Pepsi (PEP) And Your Portfolio

by Greg Schnell

There has been some fizz in both Coke (KO) and Pepsi (PEP) as they both look to break above trend lines and prior highs. On the chart below, all the indicators are for KO shown in Yellow and you can see Coke is breaking above previous highs and the down sloping trend line. Important things to note are the SCTR ranking jumping above 75, the MACD breaking to new one-year highs, and the Relative Strength improving since the June lows.  In the Background in Cyan, I have shown Pepsi (PEP) which recently burst to new highs, pulled back in August with the rest of the market and it now Read More 

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Airlines Awaiting Take Off

by Tom Bowley

Airlines ($DJUSAR) have traded sideways to down most of 2015.  Yet this industry group is one of the best performers historically in the month of October.  Furthermore, several airline stocks are in bullish patterns OR are approaching key technical levels of support/resistance.  The chart below summarizes several of the charts in this group.  Technical breakouts on confirming volume should be respected, especially considering this is the time of year these stocks love to FLY.  Check out these component stocks and their technical merit: Read More 

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Monster Beverage Loses Energy as Bands Narrow

by Arthur Hill

Monster Beverage (MNST) did not partake in the early October surge and a key volume indicator suggests that distribution is underway. Let's start with the price chart. MNST fell sharply in August and then firmed just above the rising 200-day moving average in September. Volatility contracted as the stock moved into a rather narrow range (137.5 to 131.5  on a closing basis). John Bollinger, creator of Bollinger Bands, theorized that a volatility expansion follows a volatility contraction and this means chartists should prepare for a move. But which way?  Read More 

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Social Media ETF SOCL Follows Facebook Higher

by Greg Schnell

The Social Media ETF (SOCL) has been working lower for the last 3 months. Off the recent lows, the SOCL ETF has really pushed higher with big influence by Facebook (FB) and LinkedIn (LNKD). It is testing an important horizontal support/resistance level right now. While the  SOCL chart is much less impressive than FB over the period shown, this should be an important area to watch. Facebook is expected to have big earnings, and LinkedIn has a nice recent trend going so maybe they can push above. The problem with the LinkedIn chart shown in green is the lower highs and Read More 

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Xilinx Holds the Gap and Shows Relative Strength

by Arthur Hill

Stock market declines are good because they expose the weak hands and highlight potentially strong stocks. Stocks that hold up during a broad market decline show relative strength and this could lead to outperformance when the market turns up again. Xilinx (XLNX) is one such stock because it held up well in August-September and broke out over the last four days.  The indicator window shows the stock relative to the S&P 500 SPDR (SPY) using a ratio plot (XLNX:SPY). Even though the stock forged a lower low in late August, the price relative formed a higher low Read More 

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How To Spot A Positive Divergence

by Tom Bowley

In evaluating whether a positive (or negative) divergence exists on a chart, you must remember to use closing prices.  If you use candlesticks like I do, it's not always easy to spot divergences.  I'll give you an example - Baidu (BIDU).  On the chart below, the top portion is a candlestick chart and the bottom portion is a line chart.  Evaluating divergences is one of the few times a line chart is preferred.  Take a look: On the candlestick chart, the huge gap lower and long tail to the downside produces "noise" on the chart and you may try Read More 

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Intel (INTC) Letting Its Chips Fall?

by Tom Bowley

Actually, this chipmaker's chart looks very strong, especially longer-term.  After a strong advance in late 2014, a negative divergence emerged and was followed by a topping head & shoulders pattern.  The measurement of that pattern - from the top of the head to the neckline -was roughly 17.8%.  Once neckline support was lost, the measurement is determined by another 17.8% decline, or a drop to roughly 24.66.  Several weeks ago, INTC found its bottom at 24.87, not far from reaching that measurement/downside target.  Now INTC is rebounding and it's doing so Read More