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Failed Breakouts Can Be Bigger Clues

by Greg Schnell

On Tuesday, I published an article on the breakout in the gold miners, wherein I showed three charts that supported the thesis of Gold and gold miners going higher. One of the benefits of technical analysis is knowing when you are wrong. With the reversal of the gold chart at a critical level, the expectation of a down movee in Gold is now in play. Why the quick flip?  When trading a breakout where the breakout fails to hold, it can be more important to recognize the failure than to stubbornly hold on to the trade. This time, it is the gold miners being hit by the failed Read More 

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Triple whammy for UNH suggests more weakness ahead!

by Julius de Kempenaer

The weekly chart for UnitedHealth (UNH) shows a steady uptrend in both price and relative (vs $INDU) since the start of 2016. That three-year move just came to an end. The uptrend in relative strength emerged out of the low that was set in late 2015. Since then, UNH is showing a steady series of higher highs and higher lows in relative strength against the DJ Industrials index. The red support line in the middle pane above marks that trend over a period of more than three years. The RRG lines in the lower pane follow that relative uptrend higher Read More 

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Gold Miners Are Shining

by Greg Schnell

Gold miners have really started to shine of late. The SCTR ranking of GDX, which represents the gold miners as an ETF, pushed up a couple of months ago. After surging to new 52-week highs in February, the gold miners quickly pulled back. This week, they look set up to really push to higher highs. The relative strength is breaking a 3-month downtrend after having startied a fresh surge in October. The PPO has been staying above zero, illustrating a positive momentum.  There are a few other factors that look solid. The miners are breaking a long trend of underperforming Read More 

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TJX Bucks the Selling Pressure

by Arthur Hill

TJX Companies (TJX) is part of the S&P 500 and the Consumer Discretionary SPDR (XLY). It is also part of two growth ETFs (PWB and PXLG). Even though TJX is part of an economically sensitive sector, I would put them in a different category because they are known as an "off price" retailer for apparel and home furnishings. The stock sports a strong chart and is trading at its high of the year (2019). TJX held up better than the market in October, but succumbed to selling pressure in November and December. The stock rebounded with the rest of the market in January with a big surge back Read More 

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Is This The Final High? And Was The Top In 2018?

by Greg Schnell

Much has been made of the 10-year yield dropping below the 3-month yield. In this week's case, it was particularly acute. The equity market (stocks) plummeted as the yields fell hard. US banks dropped significantly. When the scale of interest rates loses its normal "sort order" of longer term (10-year or 30-year) rates having higher yields than shorter term (3-month or 1-year) rates, this is referred to as an inverted yield curve. While it does not make a top by itself, it is important. Follow me through why this looks the same as 2000 and 2007 Read More 

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Energy Stands Out on Relative Rotation Graph For Indian Sectors

by Julius de Kempenaer

The list of pre-defined groups in the RRG-menu has been expanded with the universe covering Indian sectors against the Nifty 500 index as the benchmark. Very recently also the universe of individual stocks making up the Sensex 30 index was added. With the Nifty 50 group already on the list, we now have three universes covering the Indian market. The Relative Rotation Graph above shows the rotation for these sectors. The one that stands out for me is the Energy sector ($CNXENERGY). The sector is inside the leading quadrant and traveling at a strong Read More 

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Third Time Lucky for Advance Auto Parts?

by Arthur Hill

Advance Auto Parts (AAP) hit a new high in November and then moved into a corrective phase. Keep in mind that a correction can involve a decline or a consolidation, or even a combination of the two. AAP fell back towards the rising 200-day SMA in December and then stalled the last few months. Overall, this looks like a big correction with an even bigger uptrend. There are signs that this correction could be ending. The stock found support in the 150-155 area three times in the last four months (green zone). The first two bounces did not hold as the stock retested Read More 

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Flight Simulators See Some Upside

by Greg Schnell

In the aftermath of the Boeing 737 Max 8 issues, I was looking around the industry to see charts that might be affected by the subsequent grounding of the aircraft. Last week, a beautiful breakout occurred on CAE Systems (CAE), which makes flight simulators to train pilots on. The company has a long history of working with aircraft manufacturers to help them train the pilots who will be flying the planes. This chart has a number of nice features. The stock has been trending up nicely for the last few years and has been consolidating since June 2018, but it now seems to have Read More 

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Amazon Makes a Threat

by Arthur Hill

Amazon is lagging the Nasdaq 100 ETF (QQQ) and the broader market over the last two months because it has yet to clear its January high and remains below the 200-day SMA. This is part of the reason the Invesco Momentum ETF (SPMO) is underperforming the Invesco Minimum Volatility ETF (SPMV). AMZN accounts for 8% of SPMO. Also keep in mind that Amazon accounts for a whopping 22.73% of the Consumer Discretionary SPDR. Despite some recent underperformance, the stock made a move this week and challenged the January highs. Yep,  Amazon is threatening a breakout. The stock surged with the Read More 

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CheckPoint Checks All The Boxes

by Greg Schnell

Check Point Software (CHKP) has been a consistently strong stock over the years. For the last 18 months, the stock has been consolidating and, as of this week, looks ready to make its next move to higher highs.  As long as the breakout holds above $120, the stock looks great. I like the higher volume showing up as the stock confirms the breakout.  Wednesday's Market Buzz talked about the bank stocks. Click on the Market Buzz below to watch. Here is the the Canadian Market Roundup for mid-March.  Read More 

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One A In FAANG Just Turned Back towards the Leading Quadrant

by Julius de Kempenaer

The Relative Rotation Graph shows the FAANG stocks against $NDX on a daily basis. The strong move of GOOG is evident and tracks the recent break of resistance. Out of these five stocks, four are at the right-hand side of the graph, indicating a relative uptrend against the Nasdaq 100 index. NFLX is the only one on the left and inside the lagging quadrant, moving deeper into it at an RRG-Heading of almost 270 degrees suggesting that this is the stock to avoid in this universe. AMZN is entering the leading quadrant but at a heading that has already Read More 

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Diodes Returns to the Trend Mean

by Arthur Hill

Diodes (DIOD), a semiconductor stock, is returning to the trend mean and this could provide a bullish setup to take part in the long-term uptrend. The chart below shows DIOD with a breakout and surge to new highs in February. Note that the stock also recorded new highs in autumn 2017, summer 2018 and now winter 2019. The long-term trend has been up for over two years. The red line marks the 200-day SMA, which can also be considered the trend mean or average. The stock has broken this average several times during its overall uptrend, but dips below this trend mean were more of an Read More 

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Microsoft Readies A Test For A New High

by Greg Schnell

Microsoft (MSFT) is currently up near the previous highs. This comes after a great rally to start the year. As a technician, I consider a previous high as resistance. As the next few weeks progress, it will be important to watch the charts of the strongest software companies out there  in my opinion. I want to see if investors are willing to pay more than ever before. Microsoft is one of those anchor tenants since the arrival of Satya Nadella.  This chart looks great. The chart has everything pointing the right direction. The quiet volume is a small worry Read More 

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Seagate Rises from the Ashes

by Arthur Hill

Seagate Technology was one of the weakest tech stocks in 2018 as it fell around 40% from the April high to the October low. Things appear to be turning about here in 2019 as stock finds its footing and triggers two breakouts. The chart below shows STX with two lows in the 36 area and a double bottom pattern in play. The peaks between the lows mark resistance (red zone) and the stock broke out with a surge in late February. The broken resistance zone in the 44-46 area turned into support, and held. Notice how STX fell back to this zone after the breakout with a small Read More 

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When This Currency Chart Breaks Out

by Greg Schnell

Currency charts are just one type of asset class. They can play a pivotal role in many, many industry groups; they can affect the bond markets, the commodity markets and the equity markets in a single move. Over the last six months, the trend on the US Dollar has been sideways within a narrow 2-3 cent range. This week, we got some clues that this might be changing. As I write this note at 2:50 ET, the USD is pulling back at the top of the range at 97.30. This chart will update end of day. Line charts only show the close, ignoring the intraday highs and lows. The Read More 

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Spotting A Pair Trade On Relative Rotation Graph Of US Sectors

by Julius de Kempenaer

The above Relative Rotation Graph shows the daily rotation over the past 20-days for the Utilities and Industrials sectors. I have isolated the tails of these two sectors to be able to show them in more detail and highlight the opposite directions that they started moving in. When you bring up an RRG in order to get pair-trade ideas, this type of opposite RRG-Headings is what you are looking for. Very often there will be more than one suggestion for a pair-trade opportunity from an RRG. They may highlight more or less aggressive trade ideas Read More 

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Tilray Goes from Most Exciting to Most Boring

by Arthur Hill

Tilray (TLRY) listed on the Nasdaq at $17 with an IPO in July and promptly surged above $300. The stock then worked its way below 100 over the next few months and managed to stabilize in the 65 to 80 zone this year.   The chart below shows the Bollinger Bands contracting to their narrowest since the stock began trading. Thus, the squeeze in on as volatlity contracts. The distance between the upper band and lower band is less than 8 points and BandWidth is below 10%. BandWidth equals upper band less lower band divided by middle band. The Read More 

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Millennium Falcon - Ready To Launch

by Greg Schnell

There is a specific culture on this continent that walks and talks the Star Wars franchise. This year, Disney has the Millennium Falcon ready to launch in both of their American theme parks. Disney (DIS) is widely held across the investing spectrum, from people picking the first piece of their portfolio to the most experienced institutions in the financial sector. Now, after consolidating for years, the chart is at a major inflection point. Disney's SCTR suggests the stock is just average, with a ranking just above 50. The SCTR is like a sports ranking for stocks Read More 

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Google Goes Gaga

by Arthur Hill

Google, or rather Alphabet, broke out of a short-term consolidation and this could have long-term implications. The chart below shows GOOGL hitting support in the 980-1000 area from October to December. This support zone extends back to December 2017 and represents a whole lot of demand. Buyers are clearly active in this zone because the stock continues to hold it. The most recent bounce of this support zone carried Alphabet above its November high and 200-day SMA. Even though the stock did not hold above this breakout zone, it did forge a higher high by exceeding Read More 

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This Bank Is Poised To Break Out

by Greg Schnell

One of the most watched banks is Bank of America (BAC), whose chart has been one of consolidation over the past 12 months. As we start the month of March, investors will see that this bank is poised to break out above the trend line; it would not take much for it to hit new highs. One of the reasons I am interested in BAC is that the SCTR ranking fired off a clue recently that suggests the bank has some buyers pushing up the stock quickly, which is an SCTR signal I have noticed on some charts right before they went on runs. It's almost like a Read More