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Crude Enters Second Weakest Month on a Down Note

by Arthur Hill

Light Crude fell sharply on the last trading day of October and ended the month down. Crude even poked its head above $52 twice during the month, but fell sharply the last two weeks of October and ended below $47. This reversal of fortune is especially interesting when we look at the seasonality chart for crude. October and November were the two weakest months over the last 20 years. October finished higher just 35% of the time and November finished higher 42% of the time. Moreover, the average loss was 3.1% in October and 3.4% in November. It is also interesting to note that December is Read More 

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Charter Hits Price Support, Bounces

by Tom Bowley

There are basic technical analysis 101 principles and perhaps none more significant than the premise of price support and price resistance.  During an uptrend, think of support and resistance as you would traveling higher in an elevator in an office building.  The ceiling (resistance) on the first level becomes the floor (support) on the second.  Many times, price will travel above earlier highs (resistance) - and if it happens on nice volume, I expect that earlier price resistance to become price support.  As you can see below, Charter Communications (CHTR) broke Read More 

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This Krafty Trade May Be Just The Topping For Your Portfolio

by Greg Schnell

I spent a significant portion of my webinar discussing the market situation currently. I presented a number of charts that have me concerned about the market direction. So with that as a backdrop, finding strong defensive stocks could be a good balance of offence and defence. One of the interesting charts that showed up on my scan was the chart for Kraft Heinz (KHC). THe SCTR has been strong for a while. The $SPX has been pulling back, but this chart has been trading in a tight sideways rnge. This shows up as outperformance on the relative strength panel. This consolidation is normal Read More 

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Russell 2000 On Verge Of Breakdown But.....

by Tom Bowley

Small cap stocks tumbled today, losing 1.23% and far exceeding losses incurred on the other major indices.  Since Monday's close, the Russell 2000 has dropped approximately 3% while the benchmark S&P 500 has retreated less than 1%.  One hallmark of a bull market is the outperformance of small cap stocks relative to the S&P 500.  It's a signal that market participants are in "risk on" mode.  The past three days that has not been the case.  It's not a sign to panic, but it is beginning to raise my eyebrows.  The following shows relative strength in the Read More 

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Chubb Reverses at Key Level with a Gap

by Arthur Hill

Chubb trended lower from July to October, but a gap-laden reversal off a big support zone suggests that this decline may be reversing. More importantly, this decline looks like a correction with a bigger uptrend. Let's look at the evidence for a long-term uptrend. First, Chubb (CB) hit a 52-week high with the June surge. Second the 50-day EMA is above the 200-day EMA. Third, the stock is above the rising 200-day EMA. These indications point to a long-term uptrend.  Assuming the long-term trend is up, the decline from 130 to 122 (~6.5%) should be Read More 

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This Foreign Country ETF Is Starting To Outperform

by Greg Schnell

The Japanese $NIKK has started to break out to the upside. However, the currency is dropping. For investors, we have seen this movie before. Using the ETF's that hedged the currency worked out much better for investors last time the Yen dropped and the $NIKK soared. Below is a chart of the DXJ and you can see this trade setup back in 2014. This is hedged to the Japanese Yen and is becoming one of the top performing ETF's based on price action again.  Using an SCTR above 75 can help find some of the strong country ETFs. I'll be covering this off on my Read More 

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Euro ETF Forms Massive Consolidation within Downtrend

by Arthur Hill

The Euro ETF (FXE) formed a large triangle after a sharp decline and this pattern could be just a big rest within a bigger downtrend. After falling some 25% in one year, FXE found support in March 2015 and moved sideways the last 20 months. This sideways pattern looks like a massive triangle consolidation that could be considered a continuation pattern. This means it represents a rest after the big decline. A break below triangle support would resolve this pattern and signal a continuation of the bigger decline. Within the pattern, the Euro broke upswing support with a sharp decline in Read More 

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Will The Bull Market Resume? Watch This Chart

by Tom Bowley

There are fundamental, technical and historical factors that drive U.S. equity prices.  Earnings and interest rates have very clear fundamental impacts.  The Fed has done everything in their power to keep interest rates at historically low levels in an attempt to promote growth.  We could debate back and forth how successful they've been.  I would argue that the low rates and cheap money have absolutely been beneficial to the bottom lines of Corporate America, but rates could be at the beginning stages of an extended advance.  That's where technical indicators come Read More 

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Another Big Cap Tech Name Soars To New Highs

by Greg Schnell

Recently, the market rally has been led predominantly by tech names. Microsoft (MSFT) added its name to the New Highs file today. With Facebook, Alphabet, and Microsoft adding their names to the list recently, it is easy to see why the Technology sector has been one of the top performing sectors. Microsoft has been range bound for the last two months, which looks like institutional accumulation by trading in a tight range with no breakout or breakdown. All the technical indicators line up for this to be just the start of a move for Microsoft. If the broader market can Read More 

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American Express Beats Earnings, Raises Guidance And Challenges Resistance

by Tom Bowley

Wednesday, after the closing bell, American Express (AXP) posted quarterly results that blew away consensus estimates for EPS and also managed to top revenue estimates.  Furthermore, AXP raised its guidance on a forward-looking basis and shareholders are being rewarded today with a gap higher on massive volume.  AXP is up nearly 9% at last check and could be looking at higher prices if it can clear price resistance as follows: Today's close will be important.  Leaving a tail above price resistance with a close beneath it would suggest the higher likelihood of a Read More 

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Natural Gas ETF Breaks out of Continuation Pattern

by Arthur Hill

The FirstTrust Natural Gas ETF (FCG) has been one of the top performing ETFs this year with a year-to-date gain of around 18%. As the chart below shows, the overall trend is clearly up and the ETF is forming a small bullish continuation pattern. First, a rising channel defines the uptrend with a series of rising peaks and rising troughs. Even though the early October high did not exceed the early September high, the ETF remains well within the channel and well above the prior low. The September low and lower trend line combine to mark key support in the 24-24.5 area.  Read More 

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Alphabet (GOOGL) Makes A New 52 Week High

by Greg Schnell

Alphabet (GOOGL) broke out above resistance to a new 52 week high and a new all time high today. The SCTR has been gently climbing and pushed above 75 today. The Relative Strength is breaking out to new 8 month highs. The price cleared the narrow trading zone between $775 and $810. With the volume accelerating on the breakout,it looks like a nice confirmation of the move. The MACD has been flattening out and crossed up from a nice low location giving it lots of room to expand. Earnings are due out on October 27th, 2016. Good trading Read More 

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Can the Consumer Discretionary Sector Turn it Around in Q4?

by Arthur Hill

The consumer discretionary sector is one of the weakest performing sectors over the last six months, but the overall chart looks constructive and I am watching the October highs for a breakout. Note that I am analyzing the Equal-weight Consumer Discretionary ETF (RCD) because it tells us how the "average" stock in the sector is performing. In contrast, the Consumer Discretionary SPDR (XLY) is weighted towards large-caps because the top ten stocks account for 52% of the SPDR.  The EW Consumer Discretionary ETF declined the last two months with a move to the mid 80s, but I think this Read More 

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Bottomline Is Hoping Gap Support Is The Bottom

by Tom Bowley

About seven weeks ago, Bottomline Technologies (EPAY) produced excellent quarterly earnings results when its top line edged Wall Street consensus estimates and its bottom line crushed them.  Market participants were expecting 9 cents per share and management delivered a huge beat - to the tune of 18 cents.  That doubling of expected quarterly profit excited traders and EPAY was higher by nearly 17% at its high the next day.  EPAY's average daily volume is currently 400,000 shares, but the day after earnings, volume soared to 3.5 million shares, its highest Read More 

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TLT Touches The 200 MA

by Greg Schnell

The bond market has been selling off considerably. Now the TLT is sitting at horizontal support and touching the 200 MA. This is an important place to expect support for a trade to the long side. The risk / reward ratio can be very good by having a stop just under these levels. If TLT can not hold up here, this would mark a significant long-term trend change as it would trade below the 200 DMA. I like trading stocks and ETF's with strong SCTR's. This does not have that setup currently. At this point, this is a pattern-based trade at support. As long Read More 

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Here's How To Use The MACD For A Sell Signal

by Tom Bowley

My favorite indicator, other than the combination of price and volume, is definitely the MACD.  I've studied it for years and I use it as a very important momentum indicator in my trading strategy.  It's mostly a lagging indicator as it uses prior closing prices to determine the difference between two moving averages.  But it also provides us a predictive benefit as price momentum begins to slow before we actually see prices deteriorate.  As an example, let's look at the chart of Oclaro (OCLR): For two months, prices rose and were accompanied by Read More 

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Bollinger Bands Narrow as Dow Gears Up for a Move

by Arthur Hill

The Dow Industrials remains locked in a trading range since the 11-Sept breakdown and chartists should watch this range for the next directional clue. The chart shows the Bollinger Bands in pink and the indicator window shows BandWidth. A move below 2 shows a significant narrowing of the bands and we saw that in August-September and again in October. It is as if the Dow moved from one consolidation to another. This did indeed happen as the Dow broke down with a sharp decline on 11-Sept and this break remains the active signal on the daily chart. Even though the senior Average immediately Read More 

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QQQ - Outside Week, Struggling Momentum

by Greg Schnell

I don't talk about the technology stocks a lot as Arthur and Tom do a great job of zeroing in on them. This week seems like a good week to change it up a little. The QQQ is the focus of my attention today as a few simple reversal bar patterns put the highs of this week in question. We are already making a higher high and lower low than last week which makes this an outside week and we are only on Tuesday. We are also taking out the previous weeks' highs and lows so it is a double outside week. Last week was a doji candle which implies uncertainty, but it did make a higher Read More 

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Rising Rates and Strong Seasonality are Part of a Bullish Recipe for Banks

by Arthur Hill

The rise in Treasury yields and bullish fourth quarter provide a strong tail-wind for banking stocks as we head into year-end. After experiencing a wicked whipsaw in June from the Brexit vote, the Regional Bank SPDR (KRE) surged in early July and resumed an uptrend that began with the February reversal. KRE surged to 43 in August and then formed a falling flag into September. Note that a falling flag is a bullish continuation pattern and the flag breakout signals a continuation of the July-August surge. I would now mark support in the 40-41 zone and expect higher prices as long as this Read More 

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Lining Up Multiple Buy Signals To Minimize Risk

by Tom Bowley

There is no such thing as a guarantee when it comes to stock trading.  However, using technical analysis as a predictive tool to manage your risk is the key to success in my opinion.  Let's take EnCana Corp (ECA) as an example.  ECA lost more than 15% over a three week period in September, but it set up a very solid reward to risk trade where multiple buy signals triggered simultaneously.  Below is a chart that identifies four separate technical reasons to buy ECA: First, a negative divergence printed on the early September high and that generally signals Read More 

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Natural Gas Send Off A Flare UNG

by Greg Schnell

Natural Gas is breaking out of a 4-month consolidation! Photo: 660-news.com The breakout is really important for traders. However, Natural Gas (UNG) swings wildly. I would recommend looking into the exploration and production stocks with high SCTR's to find names that are moving up with Natural Gas. Follow this link to E&P companies with high SCTR's. Good trading, Greg Schnell, CMT, MFTA. Read More 

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MetLife Leads Strong Life Insurance Group

by Tom Bowley

The Dow Jones U.S. Life Insurance index ($DJUSIL) broke above 650 for the first time in 2016, buoyed by suddenly surging 10 year treasury yields ($TNX).  Leading the charge in the group is MetLife (MET), which at today's high had gained 33% since its post-Brexit low near 36.00.  MET broke above key 2016 resistance today on very heavy volume.  Check it out: MET printed a double bottom in February and June of 2016 and it has now surged through price resistance at 46.00.  Coupled with that are breaks of both trendline resistance and its downtrending SCTR.  Throw in Read More 

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JP Morgan Leads Financials with Breakout and New High

by Arthur Hill

Banking stocks are leading the market on Wednesday and JP Morgan is leading the sector as one of the first of the big banks to hit a new high. I featured the Regional Bank SPDR (KRE) and the Bank SPDR (KBE) in ChartWatchers this weekend and JPM has the same chart pattern working. After a Brexit-induced swoon in June, the stock recovered sharply and broke above its May high with a gap-surge in early August. The stock corrected most of September with a falling flag and broke flag resistance with a surge above 67 today.  Note that I Read More 

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S&P 500 Holds Resistance Breakout with Successful Throwback

by Arthur Hill

The S&P 500 broke above a big resistance zone with the July surge and this breakout should be considered bullish until proven otherwise. Classic technical analysis teaches us that broken resistance turns into the first support level and this is exactly what happened in September. Notice how the index fell back in early September and tested the broken resistance zone. This breakout test is known as a "throwback".  Throwbacks offer traders a second chance to partake in a breakout because prices return to the scene of the crime. With the index bouncing off this zone over the last two Read More 

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The Next Breakout In This Pipeline Stock Would Be Huge

by Tom Bowley

On a weekly closing basis, Antero Midstream Partners LP (AM) has vacillated between support near 18.00 and resistance at 28.00 for the past two years.  While the Dow Jones U.S. Pipelines Index ($DJUSPL) still has miles to go to reach its high from two years ago, the relative strength in the group has been obvious in 2016 and AM has been an outperformer within the space.  Check this chart out: Momentum issues are the biggest problem right now for AM.  The weekly MACD turned negative on the last price high at resistance and volume also was very weak.  Prior to Read More