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Russian Index Forms Bearish Continuation Pattern

by Arthur Hill

The Russian Trading System Index ($RTSI) is struggling this year and down around 6.5% year-to-date. In contrast, the S&P 500 is up over 7% year-to-date and the Eurotop 100 ($EUR) is up around 6.5%. In addition to relative weakness, the index sports a bearish continuation pattern after a breakdown in February. Notice that the index broke support in February and then formed a triangle the last few months. This triangle represents a rest after the sharp decline and a break below triangle support would signal a continuation lower. Also notice that the rising 200-day SMA is right near Read More 

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TLT Moves To Test The 200 DMA

by Greg Schnell

The long bond is an emotional beast. There has been lots of discussion about how the long bond price should be falling through the floor with the Fed raising rates.  The TLT ETF  represents the 20 + Year (Long) bonds. Today marks an interesting test of the 200 DMA from the bottom side. The 200 DMA has been an area of friction before.  The SCTR is perking up from being one of the worst ETF's in the market to moving out of the basement now. Interestingly, an SCTR above 30 has been associated with uptrends. While the Relative Strength has not started to make Read More 

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Infinera Breaks Descending Channel On Heavy Volume

by Tom Bowley

Infinera (INFN) gapped higher in February on massive volume, but has been falling in a descending channel ever since.  Volume accelerated on Friday as INFN clearly broke this down channel.  The reversal also is taking place after a key gap support level was filled and tested.  Take a look at the chart: The two blue arrows highlight the problems associated with the last two attempts at a trendline breakout.  In the first case in early May, INFN showed heavy volume that accompanied a reversing candle and false breakout, a bearish signal.  In Read More 

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Starbucks (SBUX) Enjoys New Highs Over A Latte

by Greg Schnell

Starbucks (SBUX) continues to brew higher highs. Recently the stock was under pressure because their new pre-order mobile app was too successful. While it is a problem, it is a good problem. Perhaps this chart is suggesting a positive outcome with the long wait times? As technicians, breakouts to new highs are clues we like. But the other underlying trend is lower coffee prices which are near 52-week lows. Pairing the late October high in Coffee with the 52 week low in SBUX, suggests this might be the influence. The bottom line is Starbucks is making new Read More 

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Juniper Networks Trending Higher, Threatens Breakout

by Tom Bowley

Recently, competitor Cisco Systems (CSCO) broke out to a 15 year high.  While Juniper Networks (JNPR) hasn't seen its price move to decade and a half highs, it is on the verge of breaking to a six year high amid very heavy volume.  JNPR traded more than 25 million shares on April 26th following its blowout quarterly earnings.  Both revenues and EPS handily topped forecasts and traders rewarded the company with a week long rally that nearly cleared resistance at 31.50 from November 2015.  Here's the chart: There is a negative divergence that perhaps will make Read More 

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Minding Three Gaps for Three Big Banks

by Arthur Hill

Banking stocks bounced on Tuesday as the 20+ YR T-Bond ETF (TLT) fell and the 10-yr T-Yield ($TNX) moved higher. These bounces reinforce the positive correlation with TLT and the negative correlation with $TNX. The chart below shows three big banks in long-term uptrends and six month stalls. Technically, Bank of America, JP MorganChase and Morgan Stanley are in long-term uptrends because they are above their rising 200-day EMAs and they hit new highs in March.  Despite uptrends, these three have traded flat since mid December and I am sure plenty of Read More 

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Caterpillar (CAT) Wiggles To All Time Highs

by Greg Schnell

Caterpillar continues to track higher on the price charts but in May the chart has reached an interesting level. Caterpillar broke above a 6 year consolidation in late April and has been consolidating since then. The above chart shows Caterpillar breaking out and holding the gains so far. The picture  above shows Caterpillar has lots of smaller equipment that is required in and around residential construction. The current breakout in emerging markets showing global growth improving suggesting watching the Caterpillar price action. Another Read More 

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Utilities Take the Lead with a Triangle Breakout

by Arthur Hill

The Utilities SPDR (XLU) is clearly one of the leading sectors in 2017 because it is trading at its highest level of the year. XLU, by the way, is the only sector SPDR that hit a year-to-date high on Monday. The chart shows XLU correcting into November 2016, breaking out in December and then consolidating from mid-March to mid-May. This consolidation just ended with an upside breakout and the breakout signals a continuation of the bigger uptrend. The indicator window shows the PPO(10,40,1) turning positive in December as well and remaining well above zero the entire year. This confirms the Read More 

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Northrop Grumman Awaiting Bullish Triangle Breakout

by Tom Bowley

Northrop Grumman (NOC) has risen ten fold since this bull market began in 2009 and its current bullish pattern suggests that this defense company is not ready to roll over just yet.  It's been a struggle to clear 250 price resistance the past 6-7 months, but the rising lows are an indication that we should expect another breakout - with this ascending triangle measuring to perhaps 280 or so in time upon a heavy volume breakout.  Here's the current technical view: The entire defense industry group ($DJUSDN) has been steadily outperforming the S&P 500 the past few years Read More 

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The Swiss Franc Raises Its Flag

by Greg Schnell

The Swiss Franc ($XSF) made a meaningful break of the downtrend this week. The correlation of the Swissie to other asset classes is worth noting.  Reviewing some of the history on the chart, 2011 shows the Swiss Franc at the summit of a Matterhorn peak with  major momentum going in. But the sudden plummet soon after aligned closely with a meaningful top and plummet in Gold. Interesting enough, the Yen in the lower panel would need another couple of months to top out and roll over.  If this break in the Swiss Franc is worth noting Read More 

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Caterpillar Tests Price Support, Nearly Fills Gap

by Tom Bowley

Caterpillar (CAT) was one of many beneficiaries of the latest quarterly earnings season.  With its revenues and EPS topping Wall Street estimates, CAT surged higher on April 25 from its April 24 close of 96.81.  The recent market weakness enabled CAT to pull back to test key price support and nearly test that gap support as well, setting up the stock as a very solid reward to risk trade at the current price and down into that support zone.  Here's the chart: Price support resides near 98.00 and the zone from that level down to the 96.81 gap is where I'd look for buyers to Read More 

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Gold, Euro and Bonds: The Three Inter-market Amigos

by Arthur Hill

The Gold SPDR (GLD), Euro ETF (FXE) and the 20+ YR T-Bond ETF (TLT) are all up year-to-date and showing positive correlation. This is not a big surprise because gold is negatively correlated to the Dollar and negatively correlated to the 10-yr T-Yield ($TNX). The Euro accounts for around 57% of the US Dollar ETF (UUP) and a strong Euro translates into a weak Dollar ETF. Treasury bonds and yields move in opposite directions and this means higher bond prices translate into lower yields. Furthermore, chartists can clearly see that GLD, FXE and TLT were down from September to December. The Read More 

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The Rare Earth Metals ETF (REMX) Might Be Worth Mining

by Greg Schnell

The Rare Earth Metals ETF (REMX) had glory days from October to February. Then a slide ensued where a lot of the basic materials were falling down. Today the REMX ETF looks interesting as the chart has a new pattern of higher lows and higher highs with todays upside push. It is back above the 200 DMA and trying to break above the 50 DMA. The downtrend in Relative Strength has been broken and it is trying to make new 1-month relative strengh highs. Looking on the weekly, it is also very timely. After a major downtrend, the stock recently broke Read More 

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PPO Upturn Points to a Correction-ending Breakout for Textron

by Arthur Hill

Textron (TXT), which is part of the industrials sector and the defense-aerospace industry, surged to new highs after the election and then declined in 2017. I consider this a correction within a bigger uptrend because the decline retraced less than 50% of the prior advance and the stock remains above the rising 40-week EMA. A channel formed over the last few months to define the immediate downtrend. A break above channel resistance would signal an end to the correction and a resumption of the bigger uptrend. Signs of an upturn are already emerging as the PPO (5,30,5) turned up and crossed Read More 

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Breakout Watch: Can Intel Deliver The Goods?

by Tom Bowley

Intel (INTC) has been trading in bullish sideways fashion since topping in October.  The Dow Jones U.S. Semiconductor Index ($DJUSSC) has continued to rise and lead the benchmark S&P 500 on a relative basis - even while INTC consolidates.  A breakout in Intel would measure to 42 based on its ascending triangle.  That's a tidy profit from the current price of 35.53.  Given the strength in its industry group, INTC could make a fairly quick push higher.  Here's the chart: Intel looks like a very solid reward to risk trade at the moment with an ultimate Read More 

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IWM Shows The Battle Scene Pretty Well

by Greg Schnell

A lot of people who analyze the market including portfolio managers will talk about supply and demand, or the battle between buyers and sellers. This could not be more evident in the Russell Tracking ETF (IWM). Since December 9th the IWM has been in a sideways trading range, whereas the NASDAQ has been up humongously since then.  The $RUT is charting some indecision. The rising highs but slightly lower lows suggests the range of indecision is expanding. On April 25th we see the chart gapping up to new highs for the first time in 7 weeks. April 26th the market trades Read More 

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Xerox Rises from the Ashes

by Arthur Hill

I was running through some charts today and came across and interesting setup - in Xerox of all names. It has been a long time since Xerox crossed my path. The company provides document management solutions with both hardware and services. It is a $7.2 billion company and part of the S&P 500.  Based on the chart, things may be looking up. The stock broke out with a gap and surge in January and hit a 52-week high in February. After a 30+ percent gain, the stock was ripe for a correction and it fell back to the 6.90 area in April. Notice that a falling channel of sorts formed and Read More 

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First Solar (FSLR) Spots Some Sunshine

by Greg Schnell

First Solar (FSLR) has been beaten down for a while. Last week finally delivered a huge up day with lots of volume accompanying the move. Some of that volume was short sellers covering but the chart is getting ready to test breaking through a year long trend line. The SCTR is also pushing above 50 for the first time in a year. The relative strength in purple is still weak so that is a negative. We would like to see this starting to make three month highs. Below the chart the volume candles are starting to perk up recently. Perhaps the down trend is dying and the stock is about to get Read More 

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Merck Makes a Move $MRK

by Arthur Hill

Merck is showing signs of life as it bounces off a breakout zone and the Stochastic Oscillator turns up. The overall trend is up because the stock hit a 52-week high in February and is above the rising 40-week moving average. After a breakout surge earlier this year, the stock fell back to the breakout zone with a classic throwback. The recent upturn in the Stochastic Oscillator suggests that the pullback is ending and the bigger uptrend is resuming.  **************************************** Thanks for tuning in and have a great day! --Arthur Hill CMT Read More 

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Did Nike Bottom on Friday?

by Tom Bowley

As technicians, we look for prior price resistance to act as solid support once the resistance has been broken.  That principle came into play on Nike, Inc. (NKE) as it tested a major price support just beneath 54.00 on Friday.  NKE gapped down in the latter part of March and closed at 53.92 on March 22nd on extremely heavy volume.  That set a major price support level as NKE had not closed beneath 54.00 (except for that March 22nd close) since breaking out above that level in the second week of February.  The following shows key support running through the 54.00 Read More 

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Checking In On The Bond Yields

by Greg Schnell

There are many opinions in the market and that is what makes the market so interesting. Without question one of the perplexing areas of the market has been the 10 Year Treasury Yield for a lot of investors. With the Federal Reserve looking like it wants to increase interest rates at the next meeting, I thought it would be timely to check in on the Bond Yield chart. While the US Yield has been dropping since the first of the year, it has caught a lot of the major participants off guard. But US investors are not alone. The British and Japanese charts also sport lower yields since the first Read More 

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Hartford Surges off Support with 7-day Move

by Arthur Hill

Hartford (HIG) is a big insurance concern and part of the Insurance SPDR (KIE), which is one of the best performing industry group ETFs over the last six months. The stock surged from late August to mid November and continued higher at a slower pace from January to March, hitting a 52-week high in mid March. Notice that the stock established support in the 46-47 area over the last five months and surged off support with an advance the last seven days (and counting). It may seem short-term overbought, but this surge off support shows strong and sustained buying pressure. The indicator Read More 

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Coach (COH) Rolls Out Of The Station

by Greg Schnell

Coach (COH) has been on a roll lately. This morning it was "All Aboard" the stagecoach! The stocked popped to new highs and is currently holding up there. The dividend is healthy above 3%. The SCTR gave a nice kick and it looks strong here. The 8-month high in relative strength is significant. The MACD is making a nice bounce off the zero line and looks set to continue. Hats off to handbags, this coach is leaving the station. Good trading, Greg Schnell, CMT, MFTA   Read More 

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Regeneron Bounces within a Massive Base

by Arthur Hill

Regeneron has gone nowhere since February 2016, but recent volume bars suggest that this may be a massive base. The stock surged off the 325 area with big volume in November. After falling back into January, the stock held above the October low and turned up the last 14 weeks. Notice that upside volume far outpaced downside volume two of the last five weeks. This stock appears to be under accumulation and a breakout at 400 would target an assault on range resistance. Careful this week because the Regeneron reports earnings on May 4th.  **************************************** Read More