Don't Ignore This Chart

Airlines Continue Bouncing Off Key Support

by Tom Bowley

The Dow Jones U.S. Airlines Index ($DJUSAR) made a very significant breakout late in 2014 and after its peak in January 2015, the group has been doing everything possible to hold onto price support ever since.  Despite a revenue and earnings miss by Delta Airlines (DAL) on Tuesday, January 19th and revenue misses from a trio of airlines on Thursday, January 21st - Alaska Air (ALK), United Continental (UAL) and Southwest (LUV), the DJUSAR has managed to close above the 200-205 support level.  Check out the chart: In addition to price support, there's a relative uptrend Read More 

Don't Ignore This Chart

The Utilities Sector Breaks Out - Looks Set To Soar $XLU

by Greg Schnell

With all of the trend changes that started at the beginning of the year, one is just emerging and could end up being very popular. The Utilities Sector (XLU) popped to 11-month highs today. For dividend seekers, this will be a welcome relief as the sector has struggled to make new highs. While the Fed continued with the narrative of higher interest rates, the Utilities Sector has been a hard place to invest in as an increase in borrowing costs would be a headwind for the sector. With the Fed announcement on Wednesday of a more moderate ramp, the last two days have seen big moves Read More 

Don't Ignore This Chart

Oil Shuts In A Well Fire In The Hole

by Greg Schnell

All of us old enough to remember John Wayne as the actor in the Hellfighters movie based on Red Adair's career of extinguishing blowouts might add some bourbon in their coffee this morning. It would appear in the short term that the blowout in the price of oil might have limited the spillage at $27.56 on a $WTIC chart for the time being. The chart below is the oil tracking ETF, (USO), which gives us an intraday view of the spot price. Today it made a higher high on the daily chart above the $9.29 level. Usually, commodities like to test their lows, so I wouldn't be Read More 

Don't Ignore This Chart

Only One Bullish Percent Index is above 50%

by Arthur Hill

The selling pressure this year was broad enough to push all but one of the Bullish Percent Indexes below 50%, and most below 30%. Note that StockCharts tracks the Bullish Percent Index (BPI) for the ten sectors, several broad market indexes and the Gold Miners Index. The image below comes from the Market Summary page and you will find this BPI table at the bottom. BPI shows the percentage of stocks on a P&F buy signal, which is a double top breakout. A stock is either on a P&F buy signal or a P&F sell signal. There is no ambiguity in P&F land. Currently, the utilities Read More 

Don't Ignore This Chart

Gold Starts To Shimmer

by Greg Schnell

Last week on the Commodities Countdown webinar, I pointed out that there were a few signals suggesting Gold could start to run. Here is the link to that webinar. Commodities Countdown Webinar 20160121 Today, that looks to be underway. There are a few things on the chart that signals this might have much more room to run. First, the SCTR is 96.8 which suggests it is one of the top performers. The purple relative strength is rising nicely. The MACD tried to turn down at the zero line and then started to accelerate back up which is very bullish. This breakout looks good. There will be some Read More 

Don't Ignore This Chart

Equal-weight S&P 500 Continues to Reflect Risk Aversion

by Arthur Hill

Among other ways, chartists can measure the risk appetite in the stock market by comparing the performance of the Equal-weight S&P 500 ETF (RSP) with the S&P 500 SPDR (SPY). RSP represents the average stock in the S&P 500 and the performance of small and mid caps. SPY represents large-caps in the S&P 500 and the performance for the largest stocks. Note that the top fifty stocks in SPY account for 48.77% of the ETF.   Chartists can compare performance by using a ratio chart (RSP:SPY) and adding indicators to define the trend. The main chart window shows the RSP:SPY Read More 

Don't Ignore This Chart

AmEx Earnings And Heavy Volume Sink Consumer Finance

by Tom Bowley

Consumer finance ($DJUSSF) recently broke below key price support at 170 and did so on heavy confirming volume.  To make matters worse a key component - American Express (AXP) - disappointed Wall Street after Thursday's close with its quarterly earnings report.  Bottom line results beat consensus estimates, but revenue came in a bit light.  AXP was under pressure throughout the day on Friday and was a major reason why the Dow Jones gained just half of the NASDAQ's gain.  Below is a chart showing the breakdown of the DJUSSF, along with its next key price Read More 

Don't Ignore This Chart

When Will Internet Stocks Lose Their Connection?

by Tom Bowley

Much of the bull market was led higher by technology, particularly the Dow Jones U.S. Internet Index.  So after the 2016 head & shoulders and long-term price breakdown, where might the current rally stall?  The 1015-1025 range has proven in the past to be quite significant.  Therefore, as prices move higher and into that range, we need to be careful.  The last attempt at a rally failed at 1025 and the declining 20 day EMA currently resides at 1020.  Visually, the red circle below highlights this range of potential resistance. Read More 

Don't Ignore This Chart

Traders Making Bank Withdrawal

by Tom Bowley

Banks ($DJUSBK) cannot catch a bid.  Despite the market's attempt at a rally (finally!), no one appears to be intrigued by bank prospects.  We saw an afternoon rally on Wednesday and it's being followed up with a decent rally today on the heels of European Central Bank President Mario Draghi's comments this morning about needing to review the ECB's policy stance in March.  He added that the ECB has "plenty of instruments available" and that sparked a rally in U.S. futures and has carried over into the day's trading.  Unfortunately, the market is not believing those Read More 

Don't Ignore This Chart

Gold Surges as Market Swoons, but Miners remain Weak

by Arthur Hill

The Gold SPDR (GLD) and the Silver ETF (SLV) continue to attract money as alternatives to stocks and other commodities. GLD and SLV were down rather sharply in 2015, but both are up year-to-date in 2016. GLD is up over 4% and SLV is up just over 2%. In contrast, the S&P 500 SPDR (SPY) is down over 10% and the Russell 2000 iShares (IWM) is down over 15%. Note that the US Dollar ETF (UUP) is up a fraction year-to-date, as is the Euro ETF (FXE). Even though gold is up, gold stocks are not faring as well because the Gold Miners ETF (GDX) is down around 8% this year. Elsewhere, we are Read More 

Don't Ignore This Chart

Will Amazon Hover Here Or Will This Drone Driver Crash Land?

by Greg Schnell

Amazon is becoming a much broader play than online retail and the stock has recently been reacting to the strength of the Amazon Web Services division results. I thought I would write about the drone driver and illustrate some of the points of confusion for technicians. The second part is how to resolve that confusion. Amazon has two different trendlines on price, that are both valid. How do we discern which one is right?  Both lines are valid. The dotted line has a very aggressive slope. The actual price action in Amazon has pulled back substantially but seems to be holding on Read More 

Don't Ignore This Chart

Airlines Approaching Key Support Despite Low Crude Oil Prices

by Tom Bowley

It would seem logical that falling crude oil prices ($WTIC) would help propel airlines ($DJUSAR) higher and rising crude oil prices would have the opposite effect.  In the second half of 2014 and into early 2015, that was the case.  The same scenario developed over the summer of 2015.  More recently, however, crude oil prices tumbled just below $30 per barrel, but apparently the market believes crude prices this low says more about future economic activity than anything else.  As a result, it's not benefiting the DJUSAR as you can see on the chart below: Read More 

Don't Ignore This Chart

How Do You Approach This $NYHL Chart?

by Greg Schnell

The market has been brutal. No doubt about it. The common question now is when will it end? I spent a lot of time on Thursday's webinar suggesting that the market was near extremes, but extremes can always become more extreme. Here is the New Highs Minus New Lows chart ($NYHL) for the NYSE. In the main plot, you can see the difference between new highs and new lows. I notice one thing on the chart. With the exception of the Lehman meltdown, this is the worst week in history. Back in 1987, there were fewer stocks listed, so the candle would have been bigger back then as a percentage. I also Read More 

Don't Ignore This Chart

Energy Ignites U.S. Equity Rally

by Tom Bowley

It's no secret that crude oil prices ($WTIC) have been tumbling over the past 18 months, but that has kept tremendous pressure on energy-related shares and the energy ETF (XLE).  Crude oil managed to close back above $31 per barrel with the Dow Jones U.S. Pipelines Index ($DJUSPL) up more than 10%.  That helped the XLE to climb more than 4.0% on today's session.  XLE's gain more than doubled the gains in any other sector with the lone exception being healthcare (XLV), which was buoyed by an oversold biotechnology ($DJUSBT) sector.  Energy's Read More 

Don't Ignore This Chart

Gold, Dollar and Bonds Lead in 2016

by Arthur Hill

The year is young, but we are already seeing money move from relative risk (stocks) to relative safety (bonds). The PerfChart below shows the performance for ten intermarket ETFs year-to-date (12 January close). The histogram format makes it easy to spot the winners and the losers. The USO Oil Fund (USO) and Copper ETN (JJC) are leading the way with the biggest declines. Notice that the oversold are just becoming more oversold. Oil and copper are proof that that is really no such thing as support in a downtrend. Stocks are next with SPY, QQQ and IWM down over 5%. These declines extended Read More 

Don't Ignore This Chart

When The Banking Index $BKX Is Making 52 Week Lows And Testing The 2-Year Lows

by Greg Schnell

Much has been said that everything must be fine because the US Banks are holding up just fine. The Banking Index $BKX made new 52 week lows on Monday so that changes the narrative considerably in my mind. From the chart below, we can see it is actually more severe as this level has been the major support for the past two years and we currently sit at levels reached in July of 2013. Both 2014 and 2015 had index lows at this level in Mid-January. A few of the big banks report this week including JPM. The large banks have announced layoffs and many of the banks are below their 200 DMA Read More 

Don't Ignore This Chart

Another Death Cross Looms for the S&P 500

by Arthur Hill

Stocks took it on the chin over the last two weeks with the S&P 500 falling over 7% in just seven trading sessions (30-Dec to 8-Jan). The depth of this decline forced the 50-day moving average down and it is currently below the 200-day moving average. This death-cross, however, is not the only negative on the chart. In addition to comparing price levels to a moving average, chartists can also analyze the direction of the moving average for directional clues. I added a "zoom thumbnail" so we can better see these two moving averages over the last three weeks. The 50-day SMA is clearly Read More 

Don't Ignore This Chart

Last Two Key Industry Groups Break Support

by Tom Bowley

Over the past year, the Dow Jones U.S. Internet Index ($DJUSNS) has risen 23% while the only industry group to outperform the DJUSNS has been the Dow Jones U.S. Toys Index ($DJUSTY), which has risen 31%.  Last week's selling to open 2016 was strong enough to cause technical breakdowns in both of these outperforming industry groups, a bearish overall sign for the market for sure.  While we may still see strong earnings reports surfacing over the next few weeks, market action is suggesting that many companies are likely to reduce guidance in the quarter(s) ahead.  As a result Read More 

Don't Ignore This Chart

NASDAQ Tumbling; Chaikin Money Flow and Accum/Dist Line Rising - Huh?

by Tom Bowley

If you've ever used the Chaikin Money Flow (CMF) or Accumulation/Distribution (AD) as indicators to help gauge buying and selling pressure, just make a note that gaps to both the upside and downside are ignored in their calculations.  Let's take the NASDAQ Composite as an example.  Since the end of the year, it would be difficult to argue that the action has been bullish, yet we've seen the CMF and AD rise.  The CMF shows a bullish crossover from negative territory into positive.  Chartists use such crossovers to help confirm a shift from bearish to Read More 

Don't Ignore This Chart

Intuitive Surgical Gets off to a Strong Start

by Arthur Hill

Not many stocks are currently up year to date and those that are show good relative strength in the face of broad selling pressure. Of the 1500 stocks that make up the S&P 500, S&P MidCap 400 and S&P Small-Cap 600, I count around 250 with year-to-date gains on Wednesday morning (3-day Rate-of-Change). That is around 16%, which means around 84% of these stocks are down year-to-date. That shows broad selling pressure. Intuitive Surgical (ISRG) is bucking the selling pressure with a 1.25% gain year-to-date and a new high in the price relative (ISRG:SPY ratio).  The stock is Read More 

Don't Ignore This Chart

Smith & Wesson (SWHC) Shoots Outside The Barrel

by Greg Schnell

Smith & Wesson (SWHC) accelerated on extreme volume today as the White House proposed a new series of executive actions to curb gun violence. The stock has been a triple in the last year and the SCTR has outperformed with the ranking staying above 75 for most of the year. The volume today at the time of writing was already the third highest volume since Barack Obama took office. The other strong days were 22.1 Million and 18.18 million shares which occurred back to back on December 18th and 19th, 2012. While this volume is very bullish, it can signal Read More 

Don't Ignore This Chart

Gold Stocks and ETFs Buck the Selling Pressure

by Arthur Hill

Stocks were hit hard on the open of the first trading day of 2016 with the vast majority falling, and falling sharply. There were a few pockets of strength and chartists can find these using the tables on the home page (midway down). The screenshot, which was taken around 9:49AM ET, shows the NYSE and Nasdaq stocks with the biggest gains today. Notice that I clicked the "% Up" tabs to get this group. We can see that gold stocks are having a good day with Barrick (ABX), Goldcorp (GG) and Newmont (NEM) up over 3%. The second row of tables shows the SCTR "Top Up" for large-cap stocks and Read More 

Don't Ignore This Chart

Honeywell Looking For A Happy New Year

by Tom Bowley

Honeywell (HON) is part of the diversified industrials ($DJUSID) that saw excellent relative strength in the fourth quarter of 2015.  General Electric (GE) reported excellent quarterly results in October and moved to its highest level in 15 years last week.  HON appears to be on a path to do the same.  Take a look at the chart below: At the very bottom of the chart, you'll see that the diversified industrials group broke a two year downtrend line at the beginning of the fourth quarter.  Money has been rotating toward companies like GE and HON.  HON's high close Read More