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Top Advisors Corner

David Keller: The Case for Bearish Engulfing Patterns

by David Keller

For long-term investors, candle patterns can provide an early warning sign that a trend change is afoot.  So when I noticed a proliferation of bearish engulfing patterns on the stockcharts.com technical scans, I dug deeper into the individual charts to look for signs of distribution. On January 29, 2018, there were 146 bearish engulfing patterns found, including 42 on NYSE-traded stocks.  If you’re not familiar, this is a two-bar pattern seen during an uptrend where you have one long up candle followed but a longer down candle.  The real body of the second candle “engulfs” Read More 

Top Advisors Corner

Scott Carney: Introducing the XABCD Harmonic Pattern Tool for StockCharts

by Scott Carney

After a great session this week with Tom and Erin of the StockCharts MarketWatchers program, I am happy to follow up with my first blog article to introduce the XABCD measurement tool we discussed during the program. The XABCD drawing tool is new to the StockCharts platform, and it can outline distinct M-type and W-type harmonic price structures.  These price formations represent the structural basis for harmonic patterns that can define unique levels of natural support and resistance. I initially defined the rules for harmonic patterns in my first book, “The Harmonic Read More 

Top Advisors Corner

Tom McClellan: Finally, An Actual Use For Bitcoin

by Tom McClellan

Bitcoin and the other cryptocurrencies have captured the hearts of millennial speculators around the world.  Their grandfathers may have traded gold during the run-up to gold’s big blowoff top in 1980, and their parents may have traded Internet stocks in the late 1990s, but the young hipsters want to play a more modern bubble for their “It’s different this time” denial.  Bitcoin was designed as an online medium of exchange, so that customers could use it to pay vendors for goods and services.  Its primary use lately has turned into being a speculative trading Read More 

Top Advisors Corner

Tim Ord: The Ord Oracle January 24, 2018

by Tim Ord

SPX Monitoring purposes; Long on 1/23/18 & 2839.13. Monitoring purposes GOLD: Neutral. Long Term Trend monitor purposes: Neutral. Momentum is the name of the game.  Momentum weakens first before a high in the market.  See red squares on chart above.  The RSI started to make lower highs as SP may minor new highs before a pull back started.  The situation going on now shows the RSI still is making higher highs as SPX is making higher highs and showing no divergence.  Also the McClellan Oscillator is back above “0” and bullish for the short term.  Long Read More 

Top Advisors Corner

Tom McClellan: Ending How It Began (Parabolically)?

by Tom McClellan

There is a lot of talk lately about the market “going parabolic”.  Most of the time when that term is used, people are thinking about prices swooping upward like the main cable on a suspension bridge, with each additional lateral increment seeing increasing vertical increments. But a parabola can also be seen in the path of a bouncing ball, which goes up the fastest at first, and then stalls out at the apex of its rise.  If you turn upside down a plot of a bouncing ball, you’ll get a pattern resembling a suspension bridge.  Parabolas are the same, even if turned upside Read More 

Top Advisors Corner

David Keller: Concerned About Commodities

by David Keller

Commodities as an asset class have been on an exceptional run for the last seven months.  However, a series of signals suggest potential short-term weakness for commodities as well as the Energy sector. Since bottoming out in June 2017, the Reuters/Jefferies CRB Index ($CRB) has gained over 16%, followed closely by the S&P 500 which gained 14% over the same period.  At the same time, bonds were essentially flat (-1%) and the dollar was the weakest of the four (-7%). A closer look at the CRB chart provides some cause for concern.  First, the index has traded Read More 

Top Advisors Corner

Tim Ord: The Ord Oracle January 17, 2018

by Tim Ord

SPX Monitoring purposes; Sold long SPX  1/10/18 at 2748.22=gain 2.45%. Long  on 12/27/17 & 2682.62. Monitoring purposes GOLD: Long GDX on 1/12/18 at 24.01 Long Term Trend monitor purposes: Neutral.   Above is the SPY chart going back 1 ½ years with its RSI.  It’s uncommon for the RSI to reach 80 and when it does the market either stalls and flips sideways or declines.  Friday the RSI closed at 84 and the highest level in 20 years.  On Thursday’s commentary, we said,  “We have circle in red the previous times the RSI closed >80. Monday is Martin Read More 

Top Advisors Corner

Mary Ellen McGonagle: Biotech Stocks Are Heating Up Again - How To Play The Move When The Fundamentals Aren't There

by Mary Ellen McGonagle

It’s been quite an explosive start to the New Year with a broad-based rally that has close to 200 stocks in the U.S. markets up 10% or more so far after only 8 days of trading. Dominating this list of top performers are many Energy and Medical related stocks with the highest gaining sub-group both in number of stocks and percent improvement year-to-date being in Biotechnology stocks. While the move into these highly speculative Biotech stocks points to an improved appetite for risk among already bullish investors, these stocks can be hard to embrace simply because the financials are Read More 

Top Advisors Corner

Tom McClellan: The Chart That Worries Me: HY Bond A-D Line

by Tom McClellan

There is no divergence yet between stock indices and the NYSE’s composite A-D Line.  But there is one in the High Yield Bonds A-D Line, and that is an early warning of big trouble to come. High yield bonds usually trade more like stocks than like T-Bonds, and so that has led a lot of analysts to keep an eye on junk bond ETFs like HYG and JNK, especially if they show a divergence relative to stock price indices.  Those ETFs tend to be dominated by high yield bonds that are related to oil exploration, and so the price of crude oil can move them around a bit. Read More 

Top Advisors Corner

Tom McClellan: Gold in Euros Not Confirming

by Tom McClellan

Since bottoming on Dec. 12, gold has had an impressive run higher, closing up on 13 out of the past 14 trading days.  Or at least that’s true for gold prices measured in dollars.  But gold prices measured in euros have had a much more tepid response, and have not even made a higher high yet.  It is not a bad rally in the euro price of gold, but it is not confirming the higher high in the dollar price.  History shows that this is a problematic sign for the gold rally.  Divergences are an important element of technical analysis.  But they Read More 

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