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Which Way Will The Bond Market Turn On Fed News?

by Greg Schnell

The bond market has narrowed itself into a tight range. Below is the TLT chart, with the yield payments removed from the price action. This chart allows us to see how the price is moving, and right now it is sitting at a particularly interesting junction. Bond prices started to rise after the Fed meeting on November 7-8th and have continued to rise since, but they now face an important decision point. Let's walk through what the chart is telling us. In a down market, the weekly RSI has trouble rising above 60. Back in March (2019), the market players pushed the RSI to Read More 

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Palo Alto Readies for its Next Move

by Arthur Hill

Palo Alto Networks (PANW) is a leading cyber-security stock that fits into the technology sector. Needless to say, the Technology SPDR (XLK) and the EW Technology ETF (RYT) are the leading sectors here in 2019. PANW took a break with a consolidation over the last eight weeks, and this could be the pause that refreshes. First and foremost, PANW hit a new high in early March and is well above the rising 200-day SMA. The long-term trend is clearly up. The stock is also a leader in 2019 because it recorded a 52-week high this year. The stock surged Read More 

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XLV Gets An Injection

by Greg Schnell

The Healthcare sector recently broke to 2019 lows. Does that make the sector a don't-touch, even as the market makes all-time highs? Well, this week's price bar looks like a strong bounce off a three-year support line. With that as a backdrop, the chart provides some more information that suggests this is a tradable low, with support nearby to shoot against. The Pros: Healthcare's SCTR ranking is at its lowest point in 5 years. It does not usually stay down at this level, but it will have to start outperforming to climb back up past how other ETFs are performing. Because Read More 

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Party Like It's 1999 for QCOM

by Julius de Kempenaer

Technology is doing very well on the Relative Rotation Graph for US sectors, with a rotation that is well inside the leading quadrant and pushing further into it. If we shift gears and look specifically at the RRG for the technology sector (against XLK), we can see there is one tail that firmly stands out: QCOM. At present, QCOM has a long tail inside the improving quadrant, traveling at an RRG-Heading between 0-90 degrees, and is close to a crossover into leading. With all that going for it, this chart definitely seems to be worth a look Read More 

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COUP Flies the Flag after Big Gain

by Arthur Hill

Coupa Software is one of the best performing stocks in 2019 with a 50% advance year-to-date. In addition, the stock is up over 80% from its late December low. Too far too fast you might say? Perhaps, but the stock digested its gains with a consolidation the last two months and this could set the stage for another move higher. As you can see from the stock price, Coupa Software (COUP) is clearly a high growth company. High growth stocks offer above average returns, but also above average risk. Coupa fits into the enterprise software group by offering cloud-based solutions for companies to Read More 

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Is GOOS About To Lay Another Golden Egg?

by Greg Schnell

Buying retail at this time of year is tricky, but Canada Goose (GOOS) is sitting at an inflection point on the chart. Over the last couple of weeks, the stock has moved through a downtrend in relative strength (shown on the purple area chart) and sits just below the three-month horizontal green line. The weekly full stochastic is trying to turn up above 50; after having been below for a while, it may now be pointing to a trend change for a swing trade. Price has broken the six-month downtrend following a move above the 10-week moving average. If it can move above $54.06, that would put it Read More 

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Ciena Hits Potential Reversal Zone

by Arthur Hill

The ideal scenario for traders is to buy after a pullback for a good reward-to-risk ratio. When the long-term trend is up, I look for indications of support and signs that an upturn is in the making. The chart for Ciena sports a classic setup with a confluence of indicators pointing to support and signs of an upturn. First and foremost, Ciena (CIEN) is in a long-term uptrend. The stock hit 52-week highs in February-March and remains well above the rising 200-day SMA. CIEN fell back in March with a big one-day reversal on March 5th and decline to the 37 area. This zone marks the upper end Read More 

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Intel Hits New Highs $INTC

by Greg Schnell

Intel (INTC) is one of the companies currently engaged in the 5G race. While all the attention was focused on the massive move in Qualcomm this week, Intel also quietly broke out to fresh new highs. This followed the company's announcement it would not be making smartphone 5G modems, but would focus on the network side of 5G. You can read more about that here. Intel has been quietly climbing and has also been outpacing the S&P 500, as shown in the purple area chart. When this INTC:$SPX ratio is sloped up, it means that Intel is outperforming the Read More 

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Financials Made It Into The Leading Quadrant, Now What?

by Julius de Kempenaer

At yesterday's close, the Financials sector (XLF) crossed over into the leading quadrant on the daily Relative Rotation Graph. The tail of the sector started to curl upward inside the lagging quadrant roughly two weeks ago, before then proceeding to travel higher on both the Jdk RS-Ratio and Jdk RS-Momentum scales. The sector traveled from lagging into improving and has now entered the leading quadrant. The increase on the RS-Momentum axes has stalled over the last three days and is now flat. This indicates that relative momentum is now stable/flat, pushing XLF Read More 

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Are We Looking At A Wedge In The Making?

by Julius de Kempenaer

When acting in an environment of uncertainty (of which financial markets are a prime example) it is a good habit to double-check any findings. Think of it as an extra pair of eyes to confirm or deny what you (think you) are seeing. In this process, please keep an open mind and try not to get (too) married to your own ideas/views. Markets have no mercy. Fellow colleague and commentator Dave Keller has a subtle but great reference in the sign-off below all his blogs - "RR#6." Since you may be wondering what that means, here's a link to the explanation Read More 

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JB Hunt Stalls In The Intersection $JBHT

by Greg Schnell

JB Hunt (JBHT) announced results that were not as positive as expectations and the stock dropped in response. The timing of the news happened to stall the stock right at the 40-week moving average. While the global economy has been rallying on since the late December lows, a lot of the attention has been focused on the continued growth in freight. JB Hunt is trucking into its 4th quarter of underperforming the $SPX, shown on the area chart with a high showing up last June. These lower highs in a major freight company are not bullish. The PPO continues to make lower highs Read More 

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Three Breaks And You're Out For NFLX?

by Julius de Kempenaer

Since the beginning of the month, NFLX is lagging the S&P 500 index by more than 5%. This is following the relative weakness that entered this stock after a strong start of 2019, where NFLX initially ran from $230 to $370 but started to move sideways, facing heavy overhead resistance around $380. From January to March, the subsequent highs were still higher than their predecessors, albeit only marginally. Failing To Push Through Resistance NFLX's failure to push higher was already an Read More 

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Is Costco (COST) Checking Out?

by Greg Schnell

Costco (COST) is one of the great retailers in the modern age. Recently, I went to Best Buy to buy some home electronics, but ultimately found out Costco had a better bundle at a better price. How a warehouse retailer offers better bundles than the specialists is a great question, but it's also the reason for Costco's success; they have a supplier design a bundled offering and it ends up being way better than the specialty retailer. That is true in everything from silverware to steaks, fruit to flowers or bread to butter. Somehow, it just works. Then you look at Read More 

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Is NVDA The Strongest Stock In The Strongest Sector?

by Julius de Kempenaer

Looking over some Relative Rotation Graphs this morning showed me that the Information Technology sector is currently the strongest sector in the S&P 500 universe. XLK is positioned well inside the leading quadrant and is being powered further into that space by a long tail. It is difficult to conclude anything other than that this is a strong rotation. Bringing up the weekly data, the RRG for technology stocks against XLK shows an image with a high concentration of stocks on the right-hand side of the graph (= positive territory) with tails pointing Read More 

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Japan ETF Stalls At The Wall $EWJ $NIKK

by Greg Schnell

Japan is a market that I like to keep an eye on, as it's a big participant in the global economy. This week, the Japan ETF is in focus as it tries to get through the 200-day moving average, as well as make a topside breakout through a key resistance level. During major downturns like 2015, 2011, 2008 and 2000, the 200-DMA is a good moving average to keep tabs on after it goes below. With the bond market starting to fire off some significant clues, it also suggests a need for increased caution if these levels cannot be broken. Today, Japan Read More 

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What Part of Advanced Auto Parts' Chart Do You Like?

by Greg Schnell

Advanced Auto Parts (AAP) has been struggling around the 170 level for years and we are back to that level once again. The SCTR has been strong, having recently pulled back as price consolidated through the first quarter. The SCTR is a method of comparing the strength of price moves across a group of stocks. I like to find stocks moving into the top quartile (i.e. above 75).  The full stochastic is moving back above 50, which is also good on a weekly chart. The PPO is a momentum indicator. There are four real phases of momentum: rising below zero, rising above Read More 

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Financials Are Not Looking Very Strong But In That Sector Regional Banks Should Really Be Watched

by Julius de Kempenaer

On the Relative Rotation Graph for US sectors, the Financials sector (XLF) is not in the best shape at the moment. It is positioned inside the lagging quadrant and heading lower on both axes. So, not much good there. At the moment I am in New York City to attend the CMTA symposium together with Arthur Hill, David Keller and Greg Schnell (and 300 other technical analysts). Obviously, we are discussing among ourselves as well.  My chat with Greg last night inspired this DITC chart. We discussed the weak position of the financials sector in the current market Read More 

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Is there a Biotech Breakout in the Making?

by Arthur Hill

The Biotech SPDR (XBI) is trading at a make-or-break point as it consolidates near the 40-week SMA. Traders should watch for the resolution of this consolidation because it will dictate the next directional move. The chart below shows XBI surging from the mid 60s to the lower 90s and then stalling with a small triangle. Technically, a small triangle is like a pennant, which is a bullish continuation pattern. A pennant breakout would signal a resumption of the prior advance and target a move to new highs. At this point, I have a bullish bias on XBI and expect a Read More 

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Take Two Suggests Looking Twice At This Setup $TTWO

by Greg Schnell

Take Two Interactive (TTWO) has made repetitive lower lows for a while and continues to be in a big downtrend. However, this stock has showed up on some of my scans this week and appears set to change direction. If it does start climbing from here, the stop can be set nice and tight so that the risk-reward is excellent. A return to prior highs would be a 40% move. There are three things to note here. Firstly, the PPO is turning up. Secondly, the full stochastic made a nice double bottom. Thirdly, the price looks like it is breaking out above the horizontal support/resistance Read More 

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AT&T Makes a Break for It

by Arthur Hill

AT&T (T) was one of the worst performing stocks in 2018 with a 20% decline and 52-week low in late December. 2019 is starting out much better with a double-digit gain and a break above the November-February highs, which also mark neckline resistance of an inverse head-and-shoulders pattern. The inverse head-and-shoulders pattern is a bullish reversal pattern that marks a trend change (from down to up). The left shoulder formed from late October to early December, the head with the December low and the right shoulder with the February-March lows. The peaks across the pattern mark Read More