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Auto Parts Getting Its Engine Revving; Approaching MAJOR Breakout

by Tom Bowley

I have to admit I love breakouts of long-term basing patterns and the Dow Jones U.S. Auto Parts Index ($DJUSAP) is currently in the midst of the mother of all basing patterns.  Dating back to 2014, we've seen a number of price resistance tests that all finished the same way - with failure.  I don't know if we get through this time, but if we do, you might want to consider an auto parts stock or two in your portfolio.  Here's a visual look at the long-term consolidation: The lows have been creeping higher for the past several years, but the highs have been stymied in the Read More 

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Ebay Reverses Near Key Retracement

by Arthur Hill

EBAY shows signs that the correction is ending and the bigger uptrend is resuming. First, the long-term trend is up because the stock hit a 52-week high in July. The stock then corrected with a move back to a support zone around 34-34.5. Notice that broken resistance and the June lows mark support here. Also notice that the decline retraced 61.8% of the prior advance with a falling channel (blue lines). Both the pattern and the retracement amount are typical for corrections within a bigger uptrend. The stock surged the last two days and looks poised to break the upper trend line.  Read More 

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Valero (VLO) Pumps New Highs

by Greg Schnell

Valero (VLO) is moving up on the back of the gasoline issues around the Houston flooding, but the chart was already at the top of the range before Monday. Monday it broke out to new highs and on Tuesday retreated off those highs once again. The chart has some very interesting technicals. The Yield is very healthy at 4% so that keeps you interested. The SCTR is mid-range which is not my favorite. I want to see it become a top performer above 75. The RS broke out to new 5-month highs but is retreating slightly today which you can see in the zoom box on the right. Price is pinching between Read More 

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Target Reverses at Resistance with Big Engulfing Pattern

by Arthur Hill

The Retail SPDR (XRT) is one of the worst performing industry group ETFs and Target (TGT) is one of the downside leaders. Even though the stock is up sharply since early July, it is down over 20% year-to-date and seriously lagging the broader market in 2017. Note that SPY is up around 10% year-to-date. Target is in a long-term downtrend because it is well below the falling 200-day SMA and it hit a 52-week low in June. More recently, the stock hit resistance in the 57-58 area four times since May and formed a large bearish engulfing pattern last week. This marks a clear reversal at Read More 

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Autodesk (ADSK) Sends Buy Signal Technically, Fundamentally, And Seasonally

by Tom Bowley

It's rare when stocks line up bullishly from a technical perspective, in addition to both fundamental and seasonal perspectives as well.  But that's exactly what I see when looking at Autodesk (ADSK).  Let's start with fundamentals.  ADSK just reported its latest quarterly earnings and they beat both top and bottom line estimates.  Revenues were reported at $502 million, topping the consensus estimate of $495 million.  EPS came in at (.11), much better than Wall Street's expectations of (.15). From a seasonal view, ADSK ranks as the fifth best Read More 

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Latin America Starts To Run (ILF)

by Greg Schnell

Latin American ETF's are a broad way to play the move in Industrial Metals as well as the weakness in the $USD. One broad ETF for multiple Latin American countries is ILF. This just keeps moving to new highs and has broken above resistance. Buyers way want to put this on a watch list for a pullback as a more attractive entry.   There is a Commodities Countdown Recording available to explain more about the opportunity in the Industrial Metals. Commodities Countdown 2017-08-24. For Canadian investors there is a fresh version of The Canadian Technician Recording Read More 

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Amazon To Cut Prices At Whole Foods, Prints Hammer On Support

by Tom Bowley

It was another round of selling for Whole Food Markets' (WFM) competitors as Amazon.com (AMZN) made headlines by announcing that prices would be cut at WFM stores.  That spooked the likes of Costco (COST), Wal-Mart (WMT) and Target (TGT) as all three saw drops on very heavy volume.  Meanwhile, AMZN's own price slump may have ended on Thursday as a bullish hammer printed at price support.  Check it out: If the price support reflected above fails to hold, be very careful.  The weekly chart on AMZN shows slowing momentum in the form of a negative divergence and AMZN is Read More 

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Dow and DuPont Lead XLB, and Threaten to Take Over the Sector

by Arthur Hill

The sector SPDRs are weighted by market-cap and this means the biggest stocks carry the most weight. The Materials SPDR (XLB), for example, is dominated by Dow Chemical (11.86%) and DuPont (12%). These two behemoths are poised to merge and the combined company will clearly dominate XLB going forward. Chartists interested in XLB had best keep an eye on these two stocks for directional clues.  The top window shows XLB with broken resistance turning into support in the 53-53.5 area (blue shading). Unsurprisingly, DD and DOW show similar support zones Read More 

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Gilead (GILD) Changes Character

by Greg Schnell

Gilead (GILD) was in the Biotech spotlight for many years. The rally in Biotech's that started in 2016 has largely missed Gilead. Recently, the Gilead chart changed character and started to improve.  This might just make a nice entry. The SCTR has moved above 50 after being below 25 for an entire year. Something is changing that the stock is now starting to perform similar to its peer group average. The current SCTR is 57%. Gilead is back above the 40 week moving average  for the first time since early 2016. The 10 week moving average has now crossed above, suggesting an Read More 

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Newmont Holds Breakout Zone with a Bounce

by Arthur Hill

Newmont Mining (NEM) is one of the bigger gold players and its performance is tied to the price of gold, which is challenging resistance. Note that the Gold SPDR (GLD) has yet to break above its April-June highs, but Newmont is starting to outperform bullion with a break above these highs. On the price chart, NEM broke resistance with a sharp surge and then fell back to the breakout zone with a falling flag. This pullback to the breakout zone is known as a throwback and such moves can offer a second chance to partake in a move. Falling flags are also bullish continuation patterns and the Read More 

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AMC Might Entertain The Bulls This Week

by Tom Bowley

I'm mostly a short-term momentum trader that likes to follow the big picture trend.  But it's hard to ignore stocks after they've been bludgeoned for a potential quick bounce, especially when you see a reversing candle on heavy volume.  Enter AMC Entertainment Holdings (AMC).  Here's a stock that's lost more than half its market capitalization in the past few months and it's had an absolutely abysmal August.  But Friday should provide the bulls a little short-term hope.  Check out the chart: Those green arrows show that the declining 20 day EMA has been a Read More 

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$GOLD Breaks Out

by Greg Schnell

$GOLD topped last year in July.  The Gold miners topped August 12th. After spending a year in decline, the last six months of that have been base building. This morning, the pre-market action has $GOLD above $1302.00. For Commodity investors, Copper has been performing well. It's nice to see Gold join the party.  The Relative Strength is breaking out to new three-month highs, The price is through resistance this morning and the volume shown in the zoom box has been coming in above average on every up day, and below average on most down days. The big picture is also Read More 

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Internet Stocks Weekly Losing Streak Nearing Bull Market Record

by Tom Bowley

Unless there's a reversal on Friday, the Dow Jones U.S. Internet Index ($DJUSNS) will close lower for the fourth consecutive week, equaling its longest losing streak since the DJUSNS bottomed in late 2008.  There's a decent chance a new record could be set next week as the weekly negative divergence continues to play out.  Here's a look at the current technical picture: The last breakout above 1450 has not held and the next key support level is the rising 20 week EMA.  Those are two key support levels when a negative divergence is present.  If those levels are lost Read More 

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Mind the Gap in AMAT

by Arthur Hill

The long-term trend for Applied Materials (AMAT), a big semiconductor equipment manufacturer, is clearly up and the short-term trend could be turning up again with a gap three days ago. The chart below shows AMAT hitting a 52-week high in early June and then forming a large triangle. This is basically a large consolidation within an uptrend, which means it is a bullish continuation pattern. A move above 48 would break triangle resistance, but this level is still quite far away.  The action within the triangle is what caught my interest. The arrows Read More 

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Time To Clean Out Your Portfolio?

by Greg Schnell

The discussion about market tops seems to dominate most of the news. With the exception of severe market collapses, usually the market rotates through different sectors in the business cycle, even during down times. The market top in 2015 saw Clorox rise 30% in the next year while the index pulled back. Recently, my eye was drawn to Clorox (CLX), looking for a strong, defensive stock. If the growth areas of the market are on pause, we might see some transition into more defensive names. Clorox (CLX) owns a beautiful 5-year chart that looks like it is getting ready for its next Read More 

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A Big Dow Component is Turning Up Again

by Arthur Hill

The Dow Industrials is in a clear uptrend with a fresh 52-week high just last week. Note that this senior Average is hitting these new highs without much help from its second largest component, Goldman Sachs. For reference, the Dow Diamonds (DIA) is up around 13% year-to-date and GS is down around 3.5%. The Dow is a price-weighted average and this means the stock with the highest price carries the most weight. Goldman Sachs has been the biggest component in the Dow most of the year, but Boeing recent overtook it with a big surge in late July. BA is currently around $236 and accounts for Read More 

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Small Caps Break Down; Where's Support?

by Tom Bowley

The Russell 2000 fell for the third consecutive week and its 2.70% loss last week fell below its rising 20 week EMA for only the second time in 2017.  It was a significant violation and now this index is staring at key price and moving average support in the 1340-1350 zone: Note that the rising 50 week SMA is currently at 1349, providing further support in that 1340-1350 area.  If all that support fails, then the next price support level would be the June 2015 top just below 1300. Happy trading! Tom Read More 

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Gold Miners Break A Down Trend

by Greg Schnell

The Gold space is particularly interesting this week. It marks 1 year since gold miners GDX topped out in 2016. The GDX printed a high of $31.70 on August 12th, 2016. GLD was already making lower highs. But the week brings a new chapter in GDX as well. The gold miners ETF (GDX) broke a significant downtrend with yesterdays close. There will be lots of eyes watching to see if it can hold the breakout into Friday's close for a weekly breakout. While breaking a downtrend is not the same as breaking horizontal support and resistance, it is step 1 to changing the chart shape. Read More 

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NetEase.com Getting Crushed After Earnings; The Bad News? The Selling Isn't Over

by Tom Bowley

After the bell on Wednesday, NetEase.com (NTES) was hammered as its Earnings Per Share (EPS) of $3.86 fell short of Wall Street consensus estimates of $4.07.  While that was bad enough from a fundamental perspective, the technical conditions had already begun to deteriorate in the form of a weekly negative divergence on its MACD.  That is a signal of slowing upside price momentum and that, coupled with the fundamental miss, has sent NTES shares reeling today as internet stocks ($DJUSNS) struggle.  Here's the long-term weekly chart on NTES: In my Trading Places blog article Read More 

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Gold and Bonds are Moving in Tandem

by Arthur Hill

The Gold SPDR (GLD) and the 20+ YR T-Bond ETF (TLT) are both having good years with GLD up around 10% year-to-date and TLT up around 7%. As the chart below shows, these two are positively correlated over the past 12 months. The indicator window shows the 63-day Correlation Coefficient (TLT, GLD) in positive territory for the entire chart. 63 days is around three months or a quarter. Chartists looking for more sensitivity may try a 20-day Correlation Coefficient. This positive relationship is visible today with both up sharply in early trading. In addition to the greenback, chartists Read More 

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Correlation between Stocks and Bonds Turns Positive

by Arthur Hill

Stocks and bonds are both having a good year with the S&P 500 SPDR (SPY) up 11.91% year-to-date and the 20+ YR T-Bond ETF (TLT) rising 6.53% since January. The advance in SPY has been much steadier than the choppy advance in TLT, but both sport nice gains so far in 2017. This is a bit unusual because bonds are normally considered safe-havens that benefit in a risk-off environment. Stocks, in contrast, are risky assets that benefit in a risk-on environment. The indicator window shows the Correlation Coefficient (SPY,TLT) turning positive in June and staying positive most of the last two Read More 

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Ferrari Flying But Does It Need A Pit Stop?

by Tom Bowley

Fresh off yet another stellar quarterly earnings report, Ferrari's (RACE) stock price has hit the accelerator once again.  Its ascent truly has been remarkable as RACE has gone from 31 to 111 in 3.2 seconds.  Okay, the stock price hasn't really moved that fast, but sometimes it seems like it.  Instead, RACE has more than tripled in less than 18 months and that's impressive.  Let's take a look under the hood: A couple things stand out to me.  First, the weekly RSI has been overbought all of 2017 - highly unusual for any stock to remain Read More 

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Southern Co (SO) Looks Up

by Greg Schnell

Southern Co (SO) is a utility company with a pretty intriguing chart this week.  THe SCTR got very low and is starting to move above 30, which is one style of trade I like. The Relative strength is clearly out of favor, so that is a major drawback. The price action has oscillated above and below the $48.50 level for the last year and this week closed back above it.  What I like most about the chartis the Full Stochastics on a weekly chart getting into oversold and now bouncing back up. Both other times on this chart, that was a fantastic buy signal. While the MACD has not Read More 

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Here's A High Reward To Risk Biotech Play

by Tom Bowley

First, please understand that any time you trade a small biotech company, there are considerable risks attached.  These types of stocks are certainly not for everyone.  One size does not fit all.  However, if you enjoy taking higher risk in an attempt to score high returns quickly, then take a look at Sarepta Therapeutics (SRPT): SRPT broke out above price resistance near 37.00 and quickly surged to 44.00, but became very overbought with an RSI reading above 80.  The recent selling has served a couple of purposes - first to test price support and the rising 20 day EMA Read More 

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FireEye Battles Consolidation Support

by Arthur Hill

FireEye reported earnings on Tuesday and surged on Wednesday morning with a strong open. The stock is trading well below the open now, but I wanted to highlight the bigger patterns at work. First, the long-term trend is up because the stock is above the 200-day EMA and the 50-day EMA is above the 200-day EMA. The stock forged an island reversal with two gaps in March and broke a big resistance zone with another gap in May. After a 50+ percent advance from mid March to mid May, the stock moved into a trading range from mid May to now.  FireEye was Read More 

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Verizon (VZ) Answers The Call

by Greg Schnell

Quite a few of the telco's have surged in recent weeks. While the stocks have been accelerating, Verizon has been a standout. But it is not just the US Telco's that are ripping higher.  The breadth across the industry makes the recent move important. For Verizon, the break above the 40 WMA and the SCTR rallying above 50 are both points to take notice of. While the chart is still sporting lower lows and lower highs, the change in momentum looks to be important here. There is a nice signal on the MACD as well.  There appears to be some appetitie Read More