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July 2019

ChartWatchers

The Sweet Spot - 2 Stocks Reporting Soon That Are Poised For Big Moves

by Mary Ellen McGonagle

Historically, stocks that report strong earnings and sales results go on to outperform the broader markets - and not just by a little. Using William O’Neil’s famous CANSLIM formula, which emphasizes faster-growing companies, these stocks can outperform the S&P 500 by as much as 6,000%, as you can see in the chart below. Source: AAII While strong earnings is the primary driver, there are other characteristics evident in these winners – particularly at the beginning of their steep ascent. With earnings season entering full swing next week, I’d like to share some of these Read More 

ChartWatchers

The 5-Year Yield is in a Secular Uptrend

by Martin Pring

Editor's Note: This article was originally published in Martin Pring's Market Roundup on Tuesday, July 16th at 1:24pm ET. When we get to longer-dated securities, that's where I start to question if yields are likely to move much lower. Let’s start with the 5-year series, as shown in Chart 2. The red and green lines approximate primary trend movements. The main thing to note here is that the series of declining peaks and troughs, which had been in force since at least the 1990s, was reversed in 2017. This happened at around the same time the yield was crossing back above its 96-month Read More 

ChartWatchers

How To Get From a Table of Market Movers To a Trading Idea Based on RRG

by Julius de Kempenaer

StockCharts.com has an incredible wealth of technical tools available both for free users as well as subscribers. That said, though, users who subscribe will have a greater amount of tools and functionality available to them. Very recently, there was a panel discussion on MarketWatchers LIVE with Tom, Greg and Arthur, in which Tom moderated, Arthur used the site as a free user and Greg used the site as a (logged-in) subscriber. If you have not seen this segment, I recommend watching it here, as it gives excellent insight into the benefits of a subscription Read More 

ChartWatchers

Building A Sound Portfolio Using Relative Strength Leaders

by Tom Bowley

As you may already know, I've developed multiple portfolios using fundamental strength and technical price action, including relative strength, that have wildly outperformed the benchmark S&P 500 since their inception dates. I'm very excited about that, as well as the prospect of helping thousands of you to do the same. My primary Model Portfolio was launched on November 19, 2018, in the midst of a severe market correction and was not at all deterred by that market drop. In fact, the Model Portfolio recovered much faster than the S&P 500, as Wall Street is Read More 

ChartWatchers

Presenting the Bull Market Vacation Cheat Sheet

by David Keller

I’m currently on a cruise ship docked in Naples, Italy, on a two-week vacation with my family, along with a good friend from college and his family. Today, we toured the ruins of Pompeii, which meant very high temperatures but fascinating history lessons.  Source: Pixabay In preparing to write this article, I reflected on the fact that I promised my wife I’d “unplug” for our vacation.  This has proven to be exceptionally difficult.  I’m a big fan of books that, like Nancy Whitney-Reiter’s Unplugged, speak of the value of disconnecting from Read More 

ChartWatchers

Chartwise Women's "Pink Line"

by Erin Swenlin

Chartwise Women is a new show on StockCharts TV featuring myself and Mary Ellen McGonagle. Our mission is encompassed in three "E's": Engagement, Education and Empowerment. During each show, we talk conversationally about our "Wisdom of the Week", followed by "What's Cooking? From Data Farm to Table" and finishing up with one of our favorite segments, "YeahThat Happened". (You have to watch to find out what happened!) If you would like to see our first few episodes, you can find them on the StockCharts YouTube Channel. There is a playlist for Chartwise Read More 

ChartWatchers

SCTR Rankings Continue To Show New Stocks Breaking Out

by Greg Schnell

The SCTR ranking tool is one of my favorite tools on StockCharts. Exclusive to the website, it is a very powerful indicator that provides what is effectively a sports ranking system for stocks, keeping track of what is outperforming right now. On the Wednesday and Friday editions of Market Buzz, I covered how to use the SCTR to find nice setups.  This Anthem, Inc. (ANTM) chart looks excellent on the weekly. You can see that the chart has been accelerating to the upside; the SCTR has resumed its strength by moving back above the 75 level. After the pullback in the Read More 

ChartWatchers

Two Stocks Setting Up To Report Blowout Earnings Next Week

by John Hopkins

On Thursday morning, Delta Airlines (DAL) blew past revenue and EPS estimates, despite a challenging environment for airline stocks ($DJUSAR) in 2019. While DAL's results may have surprised quite a few people, they didn't surprise me. The best way to follow where Wall Street is placing their bets is not by watching CNBC -  rather, it's by following relative strength on the charts, as that tells us where big money is investing. Keep in mind that investment firms like Goldman Sachs send their analysts to meet with company management teams to find out the latest Read More 

ChartWatchers

Charting Robust AD Lines that Truly Reflect the Broader Market

by Arthur Hill

The NYSE and Nasdaq are fine as exchanges, but their AD Lines do not tell the entire story when it comes to breadth. The major stock indexes, such as the S&P 500 and S&P Small-cap 600, contain stocks from both exchanges. As such, robust breadth indicators should include stocks from both exchanges and represent the market as a whole, not just one of the two exchanges. Today we will dive into the AD Lines for the NYSE and Nasdaq, and then chart index specific AD Lines, which I consider more robust. Breadth indicators are important because they measure the degree Read More 

ChartWatchers

Gold is Doing Better Than The World's Major Currencies

by John Murphy

Editor's Note: This article was originally published in John Murphy's Market Message on Friday, July 12th at 11:39am ET. Gold is more than just a commodity. Gold is sometimes also viewed as an alternate currency. When global traders lose confidence in their currency, they often turn to gold as an alternative store of value. Since gold is quoted in dollars, it rises in value when the dollar weakens. That's one way for investors to preserve their wealth when the Fed starts to lower rates and weaken its currency. Gold recently rose to a six-year high on falling U.S. interest rates which Read More 

ChartWatchers

Mindful Investors Minimize Distractions

by David Keller

When you're a student pilot, your first couple of solo flights remain very close to your home airport. Basically, you get up in the air and do a couple laps around the landing pattern. This is meant to get you comfortable being in the plane by yourself, as well as help you gain confidence for the long solo flights. The long solo is where you actually travel away from your airport and go somewhere else. This involves navigation, communication with air traffic control and many other moving parts. Honestly, it ends up being fairly overwhelming. Read More 

ChartWatchers

Alert Yourself To Pullback Opportunities In Fast-Moving Stocks

by Mary Ellen McGonagle

It’s been quite a star-spangled week for the markets, with the S&P 500 and Nasdaq hitting a new high 3 out of their 4 sessions. One sector showing particular strength has been Technology, which also reached a new high as many underlying stocks are posting significant returns. While this bullish action may have you eager to jump into some of these fast Tech movers, chasing stocks hitting a new high in price can be the surest way to frustration, as the inevitable pullback will have you wishing you waited. By contrast, waiting for these pullbacks presents a much Read More 

ChartWatchers

Why U.S. Equities Are Poised For Another 40-50% Surge

by Tom Bowley

I want to discuss two charts that really need to be monitored closely as we enter the second half of 2019. A rise in these charts is synonymous with massive bull market rallies. They both make great common sense, so let's discuss them before visualizing the charts. 1. 10 Year Treasury Yield ($TNX) One very important lesson to understand about the stock market is that money comes from two places. One rather obvious source is new money entering the stock market. A simple example is deciding to use cash to buy a stock. The stock market goes higher based on more Read More 

ChartWatchers

CRB Still Caught in a Trading Range

by Martin Pring

Editor's Note: This article was originally published in Martin Pring's Market Roundup on Tuesday, July 2nd at 12:36pm ET. Back in May, I wrote an article entitled “Commodities: Down Now, Up Later?" in which I pointed out some of the long-term technical bullish potential for the commodity markets, as well as some of the near-term vulnerabilities. The thought was that prices would experience some near-term weakness, after which some of these bullish factors could come into play. As it turned out, the CRB Composite dropped about 10 points and subsequently regained 8 of them. As Chart 1 Read More 

ChartWatchers

EARNINGS: 2019 Q1 Finalized; S&P 500 Still Overvalued

by Carl Swenlin

The S&P 500 earnings for 2019 Q1 have been finalized. The following chart shows us the normal value range of the S&P 500 Index, as well as where the S&P 500 would have to be in order to have an overvalued P/E of 20 (red line), a fairly valued P/E of 15 (blue line) or an undervalued P/E of 10 (green line). There are three hash marks on the right side of the chart, which show where the range markers are projected be at the end of 2020 Q1. Since 2016, price has been well above the traditional value range, with the exception of the late 2018 price decline (which Read More 

ChartWatchers

The S&P Just Broke Out of a Two-Year Consolidation, But There are Still Some Pockets of Concern

by Julius de Kempenaer

A short, but strong, trading session just before the Fourth of July holiday pushed the S&P, along with the Nasdaq 100 and the DJ Industrials indexes, to new highs. Breaks to new highs are pretty strong signs and should not be ignored. At the end of the day, it's hard to be bearish when a market makes new highs. As I write this, daytime in Amsterdam on Friday, 5 July, the weekly close for these indexes in the US is not yet available. European markets are unchanged and probably waiting for guidance from the US. On the daily chart below, the Read More