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Latest Posts

Infinera Breaks Descending Channel On Heavy Volume

by Tom Bowley

Infinera (INFN) gapped higher in February on massive volume, but has been falling in a descending channel ever since.  Volume accelerated on Friday as INFN clearly broke this down channel.  The reversal also is taking place after a key gap support level was filled and tested.  Take a look at the chart: The two blue arrows highlight the problems associated with the last two...  Read More

Back to Basics: Why do RSI divergences occur?

by Tushar Chande

I have an original, autographed copy of "New Concepts in Technical Trading System" by J. Welles Wilder, Jr.  The original signature is dated July 8, 1985, and made out to Stanley Kroll, who in turn gifted me his copy. I quite enjoy looking through the path-breaking book, as untold thousands have used the RSI and its other indicators over time. The original hand-written spreadsheets are  Read More

DecisionPoint Weekly Wrap -- Participation Fading

by Carl Swenlin

Last week I said that I was expecting the market to do a little more work on the downside before the bull market resumed, but the market had other ideas. Prices continued to rally, and on Thursday SPY broke to new, all-time highs. Volume expanded on that day, but it was still well below the one-year average of daily volume. Below we'll look at evidence that fewer stocks are participating in the...  Read More

Segmenting PnF Counts

by Bruce Fraser

Wyckoffians often break up a large Point and Figure count into smaller count objectives. A large count objective usually requires a significant period of time to be fulfilled and pauses will occur along the way. Sometimes these pauses result in a period of Reaccumulation prior to moving on to higher and higher price objectives. Segmenting PnF counts can help to identify and evaluate these  Read More

5/26 MarketWatchers Show Recap - Anatomy of a Trading Strategy - International ETFs

by Erin Heim

  Welcome to the recap of Friday's MarketWatchers LIVE show, your antidote for the CNBC lunchtime talking heads. Listen and watch a show devoted to technical analysis of the stock market with live market updates and symbols that are hot. Information abounds in our Monday/Wednesday/Friday 12:00p - 1:30p shows, but we will give you a quick recap. Be sure and check out the  Read More

Charts I'm Stalking: Action Practice #16

by Gatis Roze

So you've heard about Exchange Traded Funds (ETFs).  You've heard that they are cheap. You've heard that mutual fund managers cannot outperform ETFs. You've decided that a chunk of your nest egg should be in Healthcare. A friend suggested XPH because it holds stocks like Eli Lilly, Merck and Johnson & Johnson - companies  you've heard of. Buy, Buy, Buy!!  Whoa - slow down...  Read More

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GROWTH STOCKS ARE CARRYING MARKET HIGHER -- THAT'S MAINLY BIG TECHS

by John Murphy

GROWTH STOCKS ARE LEADING THIS YEAR'S STOCK RALLY... The S&P 500 and the Nasdaq hit new record highs yesterday, and the Dow isn't far behind. Large parts of the stock market, however, are lagging behind. That's not necessarily a good thing. The stock market is stronger when most of its stocks are rising along with it. Which brings us to the divergence between growth...  Read More

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Video - Weekly Market Review & Outlook - Still a Large-cap World

by Arthur Hill

.... Stocks Bounce without Biotechs .... Breadth Remains Bullish, but Weakening .... Nasdaq Stocks Support S&P 500  .... QQQ Hits Yet Another New High .... Small-caps Not Feeling the Love .... Sector Balance Clearly Bullish .... %Above 200-day Ranking for Sectors .... XLU, XLP, XLI and XLK Lead with Fresh Highs .... TLT Holds Surge and Breakout .... Gold also Holds Surge and Breakout...  Read More

Starbucks (SBUX) Enjoys New Highs Over A Latte

by Greg Schnell

Starbucks (SBUX) continues to brew higher highs. Recently the stock was under pressure because their new pre-order mobile app was too successful. While it is a problem, it is a good problem. Perhaps this chart is suggesting a positive outcome with the long wait times? As technicians, breakouts to new highs are clues we like. But the other underlying trend is lower coffee prices which are near...  Read More

Specialty Retailers Rally Off Support, Lead U.S. Stocks To Record Close

by Tom Bowley

Market Recap for Thursday, May 25, 2017 Retailers led another U.S. market rally on Thursday and helped provide leadership for the consumer discretionary sector (XLY, +0.88%), which outperformed the benchmark S&P 500 for one of the few times over the past 2-3 weeks.  There had been previous slowing momentum in place on the XLY:$SPX ratio and it was literally...  Read More

Commodities Countdown Video Recording For 2017-05-25

by Greg Schnell

Commodities had some wild swings this week. While Gold and Oil struggled, other charts started to perk up. Here is the Commodities Countdown Video Recording 2017--05-25. Commodities Countdown With Greg Schnell - 2017-05-25 21:00 from StockCharts.com on Vimeo. Good trading...  Read More

DP Alert: New PMO BUY Signals on All Four Scoreboards Too Late? - LT Trend Model SELL on Dollar

by Erin Heim

As noted in the DP Scoreboard Summary below, all four major indexes triggered PMO BUY Signals today as the PMO crossed above its signal line. This certainly confirms the ST Trend Model BUY signals that appeared after yesterday's strong rally. You'll note in their charts below that all made new intraday all-time highs. These breakouts above overhead resistance are impressive and do suggest we...  Read More

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Five Charts That Say Today's S&P Breakout Is For Real

by Martin Pring

Lots of supporting breakouts Confidence ratio on the verge of a major bullish breakout? Financials: trick or treat? The US is due for a bounce against the rest of the world Is it time to play the China card? Lots of supporting breakouts Last week I pointed out that the 10-day ROC of the (inverted) $VIX had reversed from the kind of level that is more normally...  Read More

Juniper Networks Trending Higher, Threatens Breakout

by Tom Bowley

Recently, competitor Cisco Systems (CSCO) broke out to a 15 year high.  While Juniper Networks (JNPR) hasn't seen its price move to decade and a half highs, it is on the verge of breaking to a six year high amid very heavy volume.  JNPR traded more than 25 million shares on April 26th following its blowout quarterly earnings.  Both revenues and EPS handily topped forecasts and...  Read More

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AIRLINES ARE LEADING INDUSTRIAL SPDR TO NEW HIGHS -- AIRLINE LEADERS ARE UAL, SOUTHWEST, AND JETBLUE

by John Murphy

INDUSTRIAL SPDR HITS NEW RECORD... Chart 1 shows the Industrial Select SPDR (XLK) trading in record territory today. Today's higher price action is pushing the XLI above a sideways trading pattern that's been in effect since the start of March. Its relative strength line (above chart) is also starting to strengthen. Among the XLI leaders are commercial vehicles &...  Read More

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SystemTrader - Trailing Stops versus Profit Targets for a Moving Average Crossover System

by Arthur Hill

..... Do stops really help?  .... Setting the Benchmark .... System Ground Rules .... Consulting, Software and Data .... Testing Some Basic EMA Crossovers  .... Base System and Sample Charts .... Trailing Stops, Profit Targets and Both .... Backtest Results .... Testing a Percent Profit Target .... Conclusions and Caveat Emptor .... Scan Code ....   Do stops  Read More

S&P 500 Breaks To Another Fresh All-Time High

by Tom Bowley

Market Recap for Wednesday, May 24, 2017 Seven of nine sectors finished higher to lead the S&P 500 to a record high close on Wednesday.  Materials (XLB, +0.67%) and utilities (XLU, +0.57%) led the advance as gold mining ($DJUSPM) and mining ($DJUSMG) both performed extremely well, rising 1.58% and 1.20%, respectively.  Steel ($DJUSST) was one of two industry  Read More

Canadian Utilities Close At New Highs - Higher Prices For Consumers Coming?

by Greg Schnell

Rolling through the various sector charts shows Canada all mixed up. Technology has been holding up but the anchor tenants of the Canadian market have not. A one month view shows the Material Energy and Financials spaces as mediocre, and the other areas driving the bus. While Healthcare is bouncing off huge multi year lows, it looks impressive, but not really. Shopify and a few other names have...  Read More

5/24 - MarketWatchers LIVE Show Recap - Home Builders - "What Would You Do?"

by Erin Heim

  Welcome to the recap of Wednesday's MarketWatchers LIVE show, your antidote for the CNBC lunchtime talking heads. Listen and watch a show devoted to technical analysis of the stock market with live market updates and symbols that are hot. Information abounds in our Monday/Wednesday/Friday 12:00p - 1:30p shows, but we will give you a quick recap. Be sure and check out the  Read More

Minding Three Gaps for Three Big Banks

by Arthur Hill

Banking stocks bounced on Tuesday as the 20+ YR T-Bond ETF (TLT) fell and the 10-yr T-Yield ($TNX) moved higher. These bounces reinforce the positive correlation with TLT and the negative correlation with $TNX. The chart below shows three big banks in long-term uptrends and six month stalls. Technically, Bank of America, JP MorganChase and Morgan Stanley are in long-term uptrends because they  Read More

Financials Lead As Banks Rally Amid Rising Treasury Yields

by Tom Bowley

Market Recap for Tuesday, May 23, 2017 Eight of nine sectors finished in positive territory on Tuesday as only consumer discretionary (XLY, -0.38%) failed to do so.  18 of 23 industry groups within the discretionary sector finished lower, with retail and home construction stocks clearly the weakest links.  After gapping higher initially on a strong quarterly earnings...  Read More

Can't Keep a Good Market Down

by Tushar Chande

The rapid rebound from the sell-off last week was impressive.  On the other hand, utilities made new highs and high-yield bonds resumed their rally.  The internals of the Russell 1000 index are pointing to weakness, even as trend-following models remain mostly bullish.  I look at some of the mixed signals from this sideways market. Chart 1: The breakout in utilities has pushed  Read More

DP Alert: STTM BUY Signals for Dow and OEX - Oil Shoots Higher

by Erin Heim

The market recovery since Wednesday has been remarkable. With this steady rally, last week's bearish signals are being erased. I did mention in yesterday's blog that ST Trend Model signals will whipsaw quite a bit but they do help us to characterize the market in the very-short term. These new BUY signals could be considered bullish confirmations of the new rally higher.  The...Read More

Caterpillar (CAT) Wiggles To All Time Highs

by Greg Schnell

Caterpillar continues to track higher on the price charts but in May the chart has reached an interesting level. Caterpillar broke above a 6 year consolidation in late April and has been consolidating since then. The above chart shows Caterpillar breaking out and holding the gains so far. The picture  above shows Caterpillar has lots of smaller equipment that is required in...  Read More

Industrial Suppliers Continue Impressive Bounce Off Support

by Tom Bowley

Market Recap for Monday, May 22, 2017 Utilities (XLU, +0.86%), technology (XLK, +0.80%) and industrials (XLI, +0.77%) were the sector leaders on Monday, aiding our major indices as they mostly have erased the big losses from last Wednesday.  The XLI has been a leader of late and is threatening an absolute price breakout and its highest relative close (vs. the S&P 500) since...  Read More

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Five Sectors Lead New High List - 10 Bullish Stock Setups

by Arthur Hill

.... XLF Lags as TLT Surges  .... A Classic Corrective Sequence for KRE .... TLT Holds Breakout and Nears 200-day  .... T-bond Correlations in Play .... Large-caps Continue to Lead New High List .... Utilities and Staples Lead Sector New High List .... Charts: MMC, CB, TRV, MDLZ, KHC, DPS, CMCSA, AAL, JBLU, MDT ....  XLF Lags as TLT Surges  The Finance SPDR (XLF) and the...  Read More

Gold's New BUY Signals - SPX Triggers ST Trend Model BUY Signal

by Erin Heim

I received some very important alerts this afternoon. Gold triggered a new IT Trend Model BUY signal as the 20-EMA crossed above the 50-EMA. In addition, Gold also saw a new PMO BUY signal; and, like the SPX, a new Short-Term Trend Model (STTM) BUY signal was triggered as the 5-EMA crossed above the 20-EMA. STTM signals can whipsaw quite a bit, but they can clarify the significance of...  Read More

Utilities Take the Lead with a Triangle Breakout

by Arthur Hill

The Utilities SPDR (XLU) is clearly one of the leading sectors in 2017 because it is trading at its highest level of the year. XLU, by the way, is the only sector SPDR that hit a year-to-date high on Monday. The chart shows XLU correcting into November 2016, breaking out in December and then consolidating from mid-March to mid-May. This consolidation just ended with an upside breakout and the...  Read More

5/22 - MarketWatchers LIVE Recap - Monday Set-ups - XLP/XLY Relative Ratio

by Erin Heim

  Welcome to the recap of Monday's MarketWatchers LIVE show, your antidote for the CNBC/FBN lunchtime talking heads. Listen and watch a show devoted to technical analysis of the stock market with live market updates and symbols that are hot. Information abounds in our Monday/Wednesday/Friday 12:00p - 1:30p shows, but in the MWL Blog will give you a quick recap. Be sure and check out  Read More

Will Technology (XLK) continue to lead the market higher?

by Julius de Kempenaer

The Relative Rotation Graph for US sectors shows four sectors with rotational patterns that catch the eye and deserve a further investigation. Inside the lagging quadrant, these are Energy (XLE) and Financials (XLF) and inside the leading quadrant, I am looking at Technology (XLK) and Consumer Discretionary (XLY). The balance of power on the RRG above is shifted to the leading quadrant. Five of...  Read More

A Reading List

by Greg Morris

In the 1970s there were very few books on technical analysis.  Now there a many great books available in the field of technical analysis and finance.  However, I'm going to keep these lists short and focused.  These lists contains many other wonderful books on technical analysis, finance, and behavioral analysis, but if I had to pick a library of only four books, this is it –...  Read More

Stocks Rebound On The Strength Of Industrials

by Tom Bowley

Market Recap for Friday, May 19, 2017 Industrials (XLI, +1.32%) and energy (XLE, +1.23%) were the two clear leaders on Friday.  The XLI represents one of the four aggressive sectors in the market so it's always nice to see strength there.  Commercial vehicles ($DJUSHR) had a huge day, rising more than 3% and are featured below in the Sector/Industry Watch.  While...  Read More

Northrop Grumman Awaiting Bullish Triangle Breakout

by Tom Bowley

Northrop Grumman (NOC) has risen ten fold since this bull market began in 2009 and its current bullish pattern suggests that this defense company is not ready to roll over just yet.  It's been a struggle to clear 250 price resistance the past 6-7 months, but the rising lows are an indication that we should expect another breakout - with this ascending triangle measuring to perhaps 280...  Read More

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Dollar Index Triggers Some Long-term Sell Signals

by Martin Pring

Dollar Index experiences major trendline breaks and MA crossovers Dollar sympathy relationships confirm a weaker dollar Emerging currencies are emerging Some currencies remain in bear market against the dollar Dollar Index experiences major trendline breaks and MA crossovers This week, the US Dollar Index ($USD) violated several key benchmarks, leading to the...  Read More

The Swiss Franc Raises Its Flag

by Greg Schnell

The Swiss Franc ($XSF) made a meaningful break of the downtrend this week. The correlation of the Swissie to other asset classes is worth noting.  Reviewing some of the history on the chart, 2011 shows the Swiss Franc at the summit of a Matterhorn peak with  major momentum going in. But the sudden plummet soon after aligned closely with a meaningful top and plummet in Gold...  Read More

Foreign Markets Retest The Highs

by Greg Schnell

With the big swing this week, some of the foreign markets are retesting breakouts. Below are just a few markets to watch in the next few weeks. Australia ($AORD) failed to hold the breakout to new highs and has now lost the 10 WMA. While losing the 10 WMA is not that big of a deal, the size of the downward stroke right after trying to break through previous highs suggests not  Read More

DecisionPoint Weekly Wrap -- Break and Bounce

by Carl Swenlin

In our Conclusions section of the Weekly Wrap last week, I expressed my heightened level of caution due to the negative condition of our indicators. On Monday a nice rally to new, all-time highs gave me cause to doubt my assessment, but the rally stalled on Tuesday, and the bottom fell out on Wednesday. But never mind, the market bounced off Thursday's low, and about half of the loss was...  Read More

Rising European Currencies Are Pushing the Dollar Lower

by John Murphy

While stocks were rebounding last week, the dollar wasn't. Chart 1 shows the Power Shares Dollar Index ETF (UUP) falling again Friday to the lowest level since November. It may seem surprising to see the dollar continuing to drop with bond yields bouncing along with stocks. The dollar drop, however, may have more to do with improving European currencies. Chart 2 shows the...  Read More

The New Nifty Fifty

by Bruce Fraser

The 'Nifty-Fifty' era for stocks started in the 1960s and went into the early 1970s. These fifty or so stocks were consistent out-performers. Their earnings, sales and stock price growth stood apart from most other stocks. These stocks grew in value, year after year. They became known as 'One Decision' stocks. These companies could be bought and held forever. Buy them and forget them. The  Read More

Broad REIT ETFs Hit Interesting Junctures, but Hotel and Retail REITs Weigh

by Arthur Hill

The REIT iShares (IYR) and the Vanguard REIT ETF (VNQ) are at interesting junctures because they corrected within an uptrend. Even though both are at potential reversal zones, chartists should be careful because retail REITs and hotel REITs are weak spots within the REIT universe. The chart below shows IYR with an uptrend since November and a recent pullback to the rising 200-day EMA in May.  Read More