The yield curve is in the spotlight over the last few weeks as the 10-YR Treasury Yield ($TNX) surged back above 2%. Chartists can plot the yield curve on a SharpChart or with the Dynamic Yield Curve tool. The image below shows the Dynamic Yield Curve on the left and the S&P 500 on the right. The vertical red line on the S&P 500 chart marks the date for the current yield curve, which is shown as the red line on the left. Chartists can click on the S&P 500 chart to move the red line and see what the yield curve looked like at different price points (2007 high or 2002 low). The dark gray lines on the yield curve reflect the changes over time. Notice that most of these lines are below the current red line and the yield curve has steepened recently.
StockCharts carries several commodity symbols from Bloomberg that chartists can use to track individual commodities and commodity groups. These can be found by searching the symbol catalog for "Bloomberg and index" (without quotation marks). The image below shows a sampling of these symbols.
The list starts with the Bloomberg Commodity Index, which consists of six commodity groups and twenty-one different commodities. This is the Bloomberg equivalent of the CRB Index ($CRB). Before looking at the components, note that symbols ending with "TR" represent a "total return index", which is one that reinvests all proceeds and distributions. The performance difference, however, is usually negligible and chartists can simply use the normal index for their analysis.
The Bloomberg Commodity Index ($BCOM) can be divided into six subgroups (subindex). These include:
The Performance SharpChart below shows a three month Performance SharpChart with all six subindexes and the Bloomberg Commodity Index. Notice that energy (green) is the top performer and industrial metals (purple) is second. Softs and precious metals are the weakest. Of note, livestock (yellow line) is making a move as its performance line is poised to cross over into positive territory.
Chartists can measure the difference between price and a moving average using the Percent Change Tool and the Percentage Price Oscillator (PPO). Knowing how far above or below a stock is from its moving average can help determine if it is overextended or if momentum is accelerating. Let's look at a 50-day simple moving average using Citrix as an example.
The Percent Change Tool can be found when annotating a SharpChart. The icon is in the middle of the top row under the auto support-resistance icon (green-red line). Click, drag and extend this tool to measure the difference between price and the moving average. As the example below shows, Citrix got overextended on the downside when it was 8-13% below the 50-day SMA. Notice that two of these measurements are from the low of the bar.
Chartists using an exponential moving average can use the Percentage Price Oscillator (PPO), which measures the difference between two exponential moving averages. A Percentage Price Oscillator set at (1,50,1) would measure the percentage difference between the close and the 50-day EMA. The last "1" is for a 1-period signal line and setting it at "1" essentially hides it.
The chart above shows the PPO dipping to the 8-10% area as closing prices moved 8-10% below the 50-day EMAs. The last price on this chart is at 67.8 and around 6.8% above the 50-day EMA. We can confirm this by measuring with the Percent Change tool. And finally, the horizontal red lines on the PPO mark prior momentum peaks in November-December and February-April. Notice how CTXS broke these prior momentum peaks in early February and again this week.
While we cannot plot the complete shape of the futures curve, chartists can plot the difference between near-term futures prices and forward futures prices to find out if market structure is in contango or backwardation. This is important to markets like oil because market structure reflects current and future demand prospects.
There is an interesting little technique that can help you save a writer's annotations when you save the chart into your own ChartList. Here is how I do it.
In the Don't Ignore This Chart article from last week, Arthur highlighted some simple support / resistance areas. Here is the chart.
Now, if you wanted to save that chart without Arthur's annotations, just click on it and use the save menu at the top centre of the chart. You can see I used the Save As tool. This will erase the annotations though.
There are several ways chartists can use the StockCharts Technical Rank (SCTR) to find winning stocks and ETFs. First, note that we have SCTRs for US large-caps, US mid-caps, US small-caps, Toronto stocks and ETFs. Leveraged and inverse ETFs are excluded from the ETF group. The securities in each group are ranked against each other. The rankings, therefore, do not overlap and are not comparable outside the group.
The SCTRs in each group range from zero to one hundred. Using large-caps as an example, stocks scoring between zero and ten would be in the bottom decile (10th percentile). Stocks scoring between ninety and one hundred would be in the top decile (90th percentile). Chartists looking for the strongest stocks or ETFs should focus on the scores between 80 and 100.
Chartists can also sort the SCTR tables by clicking each column heading. Sorting by "change" will reveal the biggest movers, which is a great way to find stocks making big relative gains. Chartists can click the icons on the left of each symbol to see different charts. The icon with the bars is for your default chart style, the icon with lines shows a gallery chart and the XO icon shows a Point & Figure chart. You can read more about the StockCharts Technical Rank (SCTR) in our ChartSchool article.
Chartists can show the performance for several symbols on one SharpChart by entering a comma-separated list (spy,xly,xlk,xli,xlf). Note that free users can chart up to five symbols on one chart, Basic and Extra members can chart up to six symbols and Pro members can chart up to ten symbols. Click here to see the different subscription packages.
Simply enter these symbols in the symbol entry box and click go to create a performance SharpChart. The example below shows the performance for SPY and four sector SPDRs over the last six months. All five are up, but one is clearly up more than the others. The Consumer Discretionary SPDR (pink) is up over 13% and the clear leader. The Finance SPDR (XLF) is up less than 5% and the clear laggard. SPY is up around 6.5%.
Chartists can also create a relative performance chart by checking the box at the top left to set the first symbol as the benchmark. In this example, SPY is the benchmark and the chart shows relative performance for the four SPDRs. Relative performance is simply the change in the SPDR less the change in SPY. Relative performance is positive when the SPDR is up more than SPY (relative strength). Relative performance is negative when the SPDR is up less than SPY (relative weakness). In this example, XLY shows the most relative strength and XLF shows relative weakness.
The Sector Summary page is designed to help chartists find the best performing sectors, industry groups and stocks. Using a top-down approach, users start with the sectors to see a break down of the broader market. Click on a sector to see the industry groups in that sector and click on the industry group to see the stocks in that group. Chartists can also adjust the timeframe, sort the various columns, apply PerfCharts, use MarketCarpets and use some symbol groups in a Relative Rotation Graph (RRG).
There is a little indicator "hack" that chartists can use to update the McClellan Oscillator during the day. First, note that StockCharts has end-of-day (EOD) symbols for the McClellan Oscillators. Simply search for the term "mcclellan" in the symbol catalog. The symbols beginning with an exclamation point (!) come from the DecisionPoint merger and these indicators are also updated after the close. The ratio-adjusted McClellan Oscillator uses the ratio of net advances [(advances less declines) divided by total issues]. The traditional McClellan Oscillator simply uses net advances (advances less declines).
This hack works for the Nasdaq and NYSE McClellan Oscillator because StockCharts has intraday data for Nasdaq Net Advances ($NAAD) and NYSE Net Advances ($NYAD). First, create a chart for NYSE Net Advances ($NYAD), which is the base indicator for the NYSE McClellan Oscillator. Note that I made this base indicator invisible in the main chart window and added the 19-day EMA and 39-day EMA because the McClellan Oscillator is the difference between these two EMAs. For reference, I also added $NYAD as an indicator in histogram format below the main window and the NY Composite Index for reference.
Click this image for a live chart
Chartists can now create the McClellan Oscillator by adding MACD(19,39,1) as an indicator. This will plot the difference between the 19-day EMA of $NYAD and the 39-day EMA of $NYAD. For reference, I also added the NY McClellan Oscillator ($NYMOT) in the lower indicator window. The values are not exact, but they are very close and the line shapes are exactly the same. More importantly, the MACD version is updated during the day and the crosses above/below the zero line are the same for both indicators.
It does not always happen, but sometimes On Balance Volume (OBV) and the Accumulation Distribution Line (ACDL) diverge to paint completely different pictures. These two can diverge because they are calculated differently. First, note that both indicators use price and volume to detect accumulation and distribution. OBV, which was developed by Joe Granville, rises when the close is higher than the prior close and declines when the close is lower. On a daily chart, the period's volume is added on an up day and subtracted on a down day. Down days on big volume, therefore, will push the indicator lower.
The Accumulation Distribution Line (ACDL), which was developed by Marc Chaikin, measures the level of the close relative to the high-low range for the period. A close above the mid point of the high-low range indicates accumulation and the volume multiplier is then positive. A close below the midpoint indicates distribution and the volume multiplier is then negative. A stock, therefore, can close below the prior close and still have positive accumulation for the Accumulation Distribution Line.
Click this image for a live chart
The chart above shows Chevron (CVX) with the Accumulation Distribution Line (blue) rising from mid December and On Balance Volume (OBV) falling during this same timeframe. The red price bars and red volume bars show when the stock closed lower. These high volume declines pushed OBV lower. The green ovals on the price chart show two examples when prices closed lower, but the close was near the high of the day. This means the volume multiplier for the Accumulation Distribution Line was positive and these high volume bars pushed the indicator higher. You can read more about these indicators in our ChartSchool.