Calling all scanners! The biggest thing since sliced bread has just hit the Advanced Scan Workbench.
Last week, we released a major upgrade to our premier scanning tool – the Advanced Scan Editor. This useful addition to the Advanced Scan Workbench is designed to make it both easier and faster to create and run your own custom technical scans.
When you write a new scan or edit a saved one, the new Advanced Scan Editor will automatically check the syntax as you type. It can provide shortcuts and suggestions, point out errors and give you real-time guidance to help complete your scan. It's like having a StockCharts scanning expert sitting next to you as work!
Now, if you're new to StockCharts and aren't too familiar with all of the features on the site, let me take a second to explain the Advanced Scan Workbench. Without a doubt, this is one of the most powerful – and popular – tools on StockCharts, allowing you to filter over 50,000 symbols in our database by any technical criteria you want in mere seconds. Whether you're looking for new 52-week highs, moving average crossovers, specific P&F patterns or anything else your charting mind can think of, just plug your specifications into the workbench; the Scan Engine will return a list of all the stocks and funds that fit what you're looking for. You can then save these scans to your StockCharts account and run them as often as you'd like.
In short, the Scan Engine lets you quickly and easily find new trading or investment opportunities, without the time and effort of manually browsing through hundreds of charts.
If you haven't yet incorporated our advanced technical scanning features into your investing/trading workflow, this is an invaluable tool that you can't afford to ignore. Plus, there's never been a better time to explore everything that the Scan Engine can do. With the helpful new Advanced Scan Editor, you'll be up and scanning in no time. To help you get started, let's take a look at some highlights of the new editor.
As you begin to type in the Scan Criteria box, the editor will automatically suggest potential clauses for you in a dropdown menu. Click one of the suggested scan clauses in the menu and it will instantly be added to your scan. This helpful menu feature is a big shortcut that makes finding scan clause additions much easier and less time-consuming.
Quick tip: You can launch the auto-suggestions dropdown menu at any time by clicking Ctrl+Space.
Detailed In-Line Errors and Warnings
The new editor brings much better error messages and warnings to the Scan Workbench. Errors are now listed right next to the problem line of your scan, making it easy to figure out which line you'll need to fix. We've also added various warning messages that alert you to potential problems that could prevent your scan from running properly or returning the intended results.
Quick tip: When you mouse over the red error or yellow warning icon to the left of the scan line, a popup message will give you more detailed information about any issues that the editor has found.
For select errors, the workbench can now fix your issues for you with one click of a button. For example, if you leave out the "and" between two clauses, you'll see a red error icon to the left of the line containing those clauses. If you mouse over the error icon, a message explaining what went wrong will pop up. Simply click on the error icon to automatically insert a fix into your scan.
Lastly, the new Reformat button (located at the bottom of the Scan Criteria Box) will automatically format the clauses in your scan, putting each clause on its own line. This auto-formatting feature makes it quick and easy to clean up a messy scan, preventing everything from simply extending far to the right on a single line.
Ready to see the editor in action? Here's what to do:
In the top right corner of the Scan Criteria panel, you'll see a button that says "Try the new Editor." Give that button a click and you'll notice that the format of the scan text box changes.
Start typing to create a new scan, or pull up a saved one and begin editing. You'll see the new Advanced Scan Editor begin to work its magic as you go!
Tell us what you think!
Once you've had a chance to play with the new Advanced Scan Editor, we'd love to hear your thoughts. Look for the message at the top of the Advanced Scan Workbench. You'll find a link to take our survey and can tell us a bit more about your experiences with the new feature (or click here to take the survey now if you've already had a chance to test it out).
p.s. Our custom scanning tools are only available for StockCharts Extra and PRO members. If you are not yet a member but would like to take advantage of these powerful features, start your free 1-month trial today and explore more of what StockCharts can do! To sign up now, Click Here.
Until next time,
Business Manager, StockCharts.com
Author, Trading For Dummies
Chart 4 shows the Consumer Discretionary SPDR (XLY) trading above its 200-day line in today's trading. That a positive sign for the economically-sensitive sector and the market. It's usually a good sign for both when cyclical stocks are leading it higher. Chart 5 shows the Biotechnology Index ($BTK) also trading above its 200-day line. That's giving a boost to the healthcare sector and the Nasdaq market. Interestingly, defensive stock groups like consumer staples are also having a strong day. That's likely the result of falling bond yields.
One's outlook often depends on one's timeframe. This outlook can also be influenced by recent price action or a recency bias. The S&P 500 surged 7.87% in January and recorded its biggest monthly advance since October 2015. This surge, however, was preceded by a deeper 9.18% decline in December and the biggest monthly loss since February 2009. Taking the two months together, the bears still have the monthly scoring edge.
The January gain is clearly impressive by itself, but the picture dims when we step back three, six and twelve months. Based on the January close, the index is essentially flat over the last three months (-.28%), down 3.98% over the last six months and down 4.24% over the last twelve months. These are not the Rate-of-Change figures one would normally associate with a bull market.
Rate-of-Change is perhaps the purest momentum indicator of all. One month momentum looks great, but three, six and twelve month momentum do not. Admittedly, the declines over the last three to twelve months are not dramatic and perhaps not worthy of a bear market label. However, traders looking for momentum names and leaders would surely pass on the S&P 500 with these Rate-of-Change numbers.
There are three areas of the market perking up nicely that you might not be hearing about much on the business news channels. These are Chinese stocks, Solar stocks and Industrial Metals.
For the Chinese stocks, I will use the KWEB ETF to represent a broad group of Chinese technology companies. The Chinese Technology ETF is turning up nicely. The SCTR is still very low, but some individual stocks in the ETF and the broader Chinese technology group look pretty strong. I talked more about these stocks on the January 23rd episode of Market Buzz.
Secondly, the Solar area of the Market is also perking up. I recently did a Don't Ignore This Chart article on JKS and also went through some other promising Solar stocks on Market Buzz February 1, 2019.
Here is the TAN ETF. Doesn't get much sunnier than this!
Lastly, the industrial metals group is starting to run. One particular US-listed stock that made new 52 week highs this week is BHP Billiton. BHP is a world leader in mining. I will be working through this industry group on Market Buzz on Wednesday morning at 10:30 ET. Watch it on StockCharts TV!
In general, the big commentary areas of the market continue to perform well, especially with some Fed comfort. Hopefully these other areas will give your portfolio a little bigger alpha to the market.
There are lots of my videos you can watch from over the past week. This is the latest Weekly Market Roundup.
I was on the MarketWatchersLive show with Erin Swenlin, where I presented Gold stocks. Click on the image to enjoy the video.
Here is this week's Canadian Technician Market Review.
If you would like to learn more about the basics of charting, check out Stock Charts for Dummies. The first section of the book walks through all the chart settings to get the charts you want, the second section explores why you might use charts for investing and the third section is about putting it all together.
Combining Earnings Strength And Seasonal Tendencies
by Tom Bowley
I love the seasonality tool here at StockCharts.com. It can potentially give you an advance notification of a price move before it happens. One of the more striking seasonal tendencies that I've seen has been the unbelievable historical performance of Bookings Holdings (BKNG) from January through May, where it's averaged the following monthly returns over the last two decades:
Add those up. That's a gain of 33.4% on average (!!!) from January through May over the past 20 years. Amazing! Want to know BKNG's average gain from June through December for that span? How about -0.7%? I know, it's crazy.
While seasonality can help to increase your investing and trading results, I treat it as simply one indicator and I don't overweight it. I'm a big fan of the Percentage Price Oscillator (PPO), but I don't buy a stock just because its PPO makes a bullish centerline crossover. It might be a confirming indication, but not a primary one. I use the seasonality tool in much the same way.
I buy stocks that report better-than-expected earnings and look solid on their chart technically. But it makes sense to me that combining all three - strong earnings, strong charts and strong seasonality - might be the best setup of all. So as we look out over the next three months, February to April, I've come up with two stocks in the retail area that you might want to consider. Why retail? Well, the S&P Retail ETF (XRT) is a well-diversified ETF that tracks areas of retail. Take a look at the seasonal performance of the XRT:
The seasonal strength from February to April jumps right off the chart at me. The XRT has averaged gaining 8.8% over this three month period during the last 14 years. The other nine months have produced an average return of just 1.5%. So more than 85% of gains in the widely diversified XRT have occurred from February through April. That's a seasonal stat worth delving into. Therefore, I've uncovered two retail stocks that look solid technically and are exceptionally strong this time of year. Earnings strength is just icing on the cake.
1. 1-800-FLOWERS.COM (FLWS):
This specialty retailer ($DJUSRS) just posted revenues ($571.3 mil vs. $554.4 mil) and EPS ($1.04 vs. $.97) that easily beat Wall Street consensus estimates. In addition, they raised guidance for FY19. Great earnings. Seasonally, FLWS shows tremendous strength in March, but the February to April timeframe has produced an average return of +14.9% over the last 20 years. FLWS has the "scent" of a possible outperformer over the next few months. Oh.....and did I mention the chart?
FLWS is short-term overbought with an RSI reading of 84, but it now has a SCTR of 97 (blue circle) and just cleared price resistance to break to its highest level since 2002 - all while mired in a cyclical bear market. The technical outlook here is solid to match its impressive seasonal trend. And the strong earnings and raised FY19 guidance won't hurt either.
2. Burlington Stores, Inc. (BURL):
BURL only has a 7 year track record, but I can't ignore the February and March stats over these 7 years:
Over 7 years, BURL has averaged gaining 11.6% during February and March and it's risen in both months every year. Of course, now that I'm pointing this out, it'll probably drop. But BURL has been a very solid performer and its technical picture is solid as well:
The prior uptrend is quite clear, as is the current consolidation zone between 145-180. In 2019, we've already seen multiple successful tests of the rising 20 day EMA, a bullish development. From an earnings perspective, BURL reported its latest quarterly results on November 28th and posted excellent revenues ($1.63 billion vs. $1.60 billion) and EPS ($1.21 vs. $1.06).
There's no way to predict how an individual stock will perform with absolute certainty. We can only review the price action and use the tools at our disposal to help manage risk, while trying to outperform the overall market. I believe the combination of strong earnings, strong charts and favorable seasonal conditions can help us achieve that goal.
If you want to keep up with the latest stock market happenings and consider actionable trading ideas, then please follow me every day at my Trading Places with Tom Bowley blog. My latest article "Bond Market Issues Major Warning" suggests that the bond market continues to predict economic weakness ahead and that could result in another leg down in stocks, despite the superb January performance we've just witnessed. While you're there, be sure to scroll to the bottom of my article and provide your email address in the space provided and click the green "Subscribe" button. After your FREE subscription, all of my Trading Places articles will be sent to the email address provided as soon as published. As always, thanks for your support! :-)
Earnings Season Brings with it Lots of Trading Candidates
by John Hopkins
We're now deep into earnings season, with hundreds of companies reporting last week alone. The reaction to earnings so far has been mostly positive - witness the nice move higher in the market. But we've also seen some earnings misses, with those companies taking it on the chin.
The very good news for traders is that, at some point, those companies that beat or missed expectations will become high reward-to-risk trading opportunities, both on the long and short side - especially for those traders who exhibit extreme patience. As an example, take a look at the chart below on Facebook, which easily beat earnings expectations when they reported their numbers last Wednesday.
You can see how sharply FB rose on its report, being up over 12% at its high on Thursday. Importantly, it rose above its 200-day moving average for the first time in almost 6 months. But unless you were holding the stock into its report - something we're always leery about - you missed the big move higher. And who wants to chase a stock that has risen double digits in less than 24 hours?
If the market continues to move higher, FB could move higher as well, with the next key level of resistance close to 180. If that were to occur, we could easily see a pullback to the $165 level, perhaps a level to consider buying on the dip with a tight stop. It's also possible the stock peaks here in the near term and, at some point, pulls back to its breakout level near $150, which could potentially provide an even better entry level.
On the flip side, there are plenty of stocks that have or will miss earnings expectations and, at the right time, could become short candidates. At EarningsBeats, we scan for companies that both beat and miss earnings expectations for the purpose of zeroing in on those that are ripe for a trade. So I've decided to conduct a webinar this Monday, February 4 to go over some specific stocks that just reported earnings, including those that fit the long or short category. If you want to join me for this FREE event, just click here.
There are many things that impact the market every day, including key economic reports, world developments and sudden surprises. But when everything is said and done, earnings are what matter the most to serious traders.
Two-for-One: How to Live Longer and Pass the Financial Baton to Future Generations
by Gatis Roze
“Yes, the fountain of youth really does exist, and academic research is increasingly proving it to be found amidst your investment portfolio. A growing body of scholarly research shows that, in many ways, life can get better as we get older and being an active investor can contribute in significant ways.” — Gatis Roze
I wrote those words over four years ago for my December, 2014 blog. What made me revisit that scenario was a recent Today Show program on what current medical and longevity research is telling us to do to that adds meaningful years to our lives. In this televised interview, Dr. Oz reinforced the usual health recommendations: proper diet, reduced sugar, lowered blood pressure, enough sleep, etc. But he also discussed the stressful negative impact of loneliness and the importance of making real connections with your significant other, your family, your friends and your personal community. Those connections are what may add the most years to your lifespan — a shockingly high number, according to Dr. Oz.
Over the four years since I wrote that first investor longevity blog, I’ve tried hard to personally adopt these principles as much as possible. But one of Dr. Oz’s recommendations has stood out above the rest. I’ve made sure to embrace my personal investing community in a unique manner (due to my own particular circumstances). Specifically, I’ve focused in on how to best pass the financial baton to my son. Based on the dozens of conversations I’ve had with many of my readers, I know that I am not alone in this concern.
A recent Wall Street Journal article asserted that what is happening in the USA presently is “the single largest generational wealth transfer in the history of the world.” I firmly believe this because the recent Spectrum Group’s Market Insight 2018 reports that there are close to 11,000,000 millionaires in the United States today. My point being that there are many of us challenged by how best to achieve this end. I won’t go into all the details on how I managed this baton-pass with my son since I described it at length in this blog written last year.
The key takeaways are these:
Encourage your children and grandchildren to learn about investing early. It will benefit all parties in big ways.
Present investing as a worthy part-time hobby that can offer a lifetime of insights and benefits.
Map out an informal program that will let you discuss finances, share interesting books, take investing classes together, etc.
Most important of all, make an effort and show interest in their progress.
Remember, it’s not just about showing your favorite stock chart to the next generation. It’s a learning process that means discussing asset allocation and diversification. It’s about helping them understand how a company’s earnings drive its success. It’s about addressing the “ big three” as well: behavioral control, discipline and routines. All of these topics will not only make your young investors more savvy financially, but will make them more productive human beings as well. Think of it as a hybrid approach where you blend topics. When you do, you will not only pass the financial baton, but you may well discover the best part of yourself. Dr. Oz assures us it’s a process that will enhance your own longevity as well, making it the quintessential “win — win — win.”
The bottom line is this. Start early and expand your thinking as to who could benefit from this kind of intergenerational collaboration. Include your spouse and any other significant people in your life circle. Just as so many aspects of investing involve the Investor Self, don’t let your ego get in the way. You, as a mature investor, are not acknowledging the beginning of the end with this collaboration. You are actually extending your life and making it more meaningful.
Side note: don’t let your financial advisors dissuade you from your self-help agenda. Go for it. You and all your significant others will be grateful!
Also, before I let you go...
Educational Opportunity: I have gone back over the past 30 years of trades to identify how and where my greatest trading and investment winners materialized. I will be sharing these findings in a 3-hour seminar at Bellevue College (Bellevue, WA). That seminar is coming up very soon on Saturday, February 9th. For more information, click here.
Grayson and I will be teaching another one of our very popular 2-day Boot Camp seminars here in Seattle at the end of February. I invite you into my very own trading office on Saturday and Sunday, and we share it all. With a small group of just 12 investors, it's an action-packed, all-you-need, everything-included weekend of investing talk and teaching, with lots of personal attention and powerful learning.
We've just had one seat open up at the last minute, so if you'd like to join us for this very unique, very exclusive event, now is your chance! Complete details and registration info can be found on our website at StockMarketMastery.com/bootcamp
Trade well; trade with discipline!
- Gatis Roze, MBA, CMT
New IT Trend Model for Dow - Rising Trend Channels Replace Ascending Wedges
by Erin Swenlin
Today, we had a new Intermediate-Term Trend Model (ITTM) BUY signal trigger on the Dow Industrials ($INDU). Additionally, the SPY (which is not on the Scoreboards) triggered a new ITTM BUY signal as well. Be sure to read Carl's DP Weekly Wrap for this week to read about that signal change in more detail. The other three large-cap Scoreboards will add similar signals next week unless price falls below the 50-EMAs.
Not only are we seeing several ITTM BUY signals appearing or nearly arriving, but the bearish ascending wedges have morphed into rising trend channels, which is certainly bullish. I've annotated on some of the charts below, using thick red lines to depict the previous rising wedges. While these are bullish indications, I would use caution; the PMO is overbought for a bear market configuration and the rising trend channels are all fairly steep in their ascent. That type of rising trend is difficult to maintain. On the Dow below, the declining tops trend line is holding up as overhead resistance.
The SPX missed an ITTM BUY signal by only two-tenths of a point. The only way for this signal to not trigger next week is if price falls below the 50-EMA, which is highly unlikely. The OBV is showing a reverse divergence (something that is on all four charts). We saw a pick-up in volume, putting the OBV tops at the same level. However, price did not follow suit, unable to push to similar tops despite good volume.
Another rising trend channel is on the NDX. The NDX looks pretty healthy in that we saw a breakout above the declining tops line in mid-January. The resistance level that price pushed through on Thursday links to the mid-January top, mid-December top and mid-October bottom, as well as the 200-EMA. Like the other Scoreboard indexes, the PMO can be considered overbought.
OEX barely broke above the declining tops trend line and is now hung up with the resistance of the 200-EMA. The PMO isn't as overbought as some of the others, but it's getting there. A new ITTM BUY signal is approaching (though it is not as close as the other three indexes) as the 20-EMA reaches toward the 50-EMA for a crossover. OBV tops are similar, having risen to the same level. Unfortunately, price tops did not follow suit.
Conclusion: Carl's Weekly Wrap is a must-read this week. During Friday's DecisionPoint show, I asked Carl if the new BUY signals are coming in on not only the DP Scoreboard indexes, but also on our Sector Scoreboard this week. There were 5 new BUY signals in the following sectors: XLC, XLF, XLB, XLI and XLB. This adds to the three ITTM BUY signals we had on XLRE and XLY. It's hard to deny that we could be looking at a buying initiation, which would lead to higher prices. There's also evidence from the OBV and VIX that there is a buying exhaustion lining up. Carl and I favor the exhaustion.
Watch the latest episode of DecisionPoint with Carl & Erin Swenlin LIVE on Fridays 4:30p EST or on the StockCharts TV YouTube channel here!
Technical Analysis is a windsock, not a crystal ball.
Using Relative Rotation Graphs To Break Down The Bloomberg Commodity Index Family
by Julius de Kempenaer
This article was published in the RRG blog on 31 January and takes a look at the Bloomberg Commodity Index Groups through the lens of a Relative Rotation Graph.
When possible, I prefer to use data-sets that come from the same family and creating a "closed universe." This is a universe where all securities on the RRG together make up the benchmark that is used for comparison.
For the US sectors, we often use the 11 SPDR ETFs and compare them against SPY. All these ETFs together make up SPY.
For commodities, we can achieve a similar setup by using the Bloomberg commodity index family.
Bloomberg Commodity Index Family
The Bloomberg Commodity Indexes are a family of financial benchmarks designed to provide liquid and diversified exposure to physical commodities via futures contracts.
You can read up on this index family on the Bloomberg website. That page will also provide you with plenty of resources and information to understand how these indexes are constructed and maintained.
One document which I want to highlight, can be downloaded from that website (just click on the image below), is the overview of the 2019 BCOM Target Weights.
This overview shows the breakdown of the overall Bloomberg Commodity Index ($BCOM) into six groups. Each of these groups contains a number of individual commodity contracts.
You can compare the groups with the sectors in the stock market, and the individual commodities are the individual stocks.
The table below shows the ticker symbols in the Stockcharts database that are connected to these commodity groups.
Just to be complete, for each of these symbols, including $BCOM, there is a Total Return equivalent available in the database. Simply add TR at the end of the symbol. So $BCOMTR is the Total Return equivalent of $BCOM and $BCOMPRTR is the TR equivalent of $BCOMPR and so forth.
Putting This Index Family On A Relative Rotation Graph
Putting these six groups on a Relative Rotation Graph and setting $BCOM as the benchmark gives the picture above.
To make things easy for you we have added this universe to the pre-defined groups on the RRG page. Just open the Groups drop-down selection and scroll down to the commodities section. The group in the RRG above is the first one in there, called Bloomberg Commodity Sub-indexes.
As you can see, here also, the rotational behavior of these groups around the center (benchmark) of the RRG shows up.
The first quick takeaway from this RRG is that Energy, which is the biggest group at 30% weight, is dragging the general commodity index down. This causes the other groups to cluster diagonally from the Energy group in order to keep the universe balanced around its benchmark.
On the opposite side, inside the leading quadrant, we find Precious metals still heading higher on the Jdk RS-Ratio scale but losing some relative momentum. The Industrial metals are about to enter the leading quadrant which may offer a good opportunity while we need to keep an eye on Softs as they are inside the weakening quadrant and rotating towards lagging.
Bloomberg Energy Subindex - $BCOMEN
The uptrend in the energy group helped $BCOM going higher from mid-2017 to mid-2018 but was not strong enough to keep things up much longer when $BCOM peaked in May. The Energy group was able to continue on its own for a little while until October.
But when this group broke its rising support line the down-move that had already started in $BCOM only accelerated. Very rapidly Energy dropped to the level of its long-term rising support line (light-red dashed line). The current rally, for now, has to be interpreted as a recovery within the established downtrend.
That trendline and the recent low near $32 are important levels to watch. Another break lower will certainly fuel a further decline in Energy and therefore most likely also $BCOM.
Bloomberg Precious Metals Subindex - $BCOMPR
Precious metals completed a bottoming formation in the second half of 2018 when they broke out a trading range / double bottom towards the end of the year. That break ignited a strong rally which took $BCOMPR to its current levels, where the group is now closing in on resistance offered by the falling trendline as well as the horizontal level coming off a former low. Both around $170.
The relative strength line already managed to break its falling resistance line and even tested that line as support in a pullback move. This means that the relative trend is now up and with both RRG-Lines comfortably above the 100-level a further outperformance may be expected.
A break beyond $170 will accelerate such a move.
How To Trade?
In order to trade commodities you need a futures trading account and then you can only trade individual futures contracts. Which is a different ball-game from trading stocks altogether.
The good news is that iPath, which belongs to Barclays, has created ETNs (Exchange Traded Notes) that track the performance of the individual futures contracts that make up the groups in this index family.
Although technically, under the hood, ETNs are not the same as an ETF but they behave very much alike, they track the performance of a group of underlying financial products and the can be traded on an exchange.
iPath takes care of all the weightings and the rolling of the futures contracts when they expire etc.
In the drop-down with predefined groups, you will find the second group in the commodity section. This group holds the ETNs that belong to the groups we used above.
Here is the RRG for that universe.
You may note that the ETNs are based on the Total Return indexes but that the picture does not differ much from the price based indexes. The same goes for the regular charts.
When the stock market goes through a rough patch, some diversification into another de-correlated asset class like commodities can be helpful. These ETNs provide an easy alternative to create "exposure" without having to go to the trouble of trading and managing multiple futures contracts.
My regular blog is the RRG blog If you would like to receive a notification when a new article is published there, simply "Subscribe" with your email address using the form below.
Julius de Kempenaer | RRG Research
RRG, Relative Rotation Graphs, JdK RS-Ratio, and JdK RS-Momentum are registered TradeMarks ®; of RRG Research
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