Trend Check with Tushar Chande

Tushar Chande
About the author: , PhD, MBA, is the inventor behind an impressive collection of technical indicators, including the Aroon and Stochastic RSI. He has written several books, holds both a PhD in Engineering and an MBA in Finance, and has over two decades of experience trading the financial markets. Follow Tushar in this blog as he highlights his new "Trend Meter" indicator and shares his analysis of current market conditions.

Latest Posts

Trend Check with Tushar Chande

Markets Fall Out of Parabolic Patterns After Well-timed Warning

by Tushar Chande

After my well-timed warning last weekend, the markets fell out of their parabolic patterns on Monday, responding to the external trigger of rising rates.  For example, the New York Composite was the first to fall out of the pattern and fell decisively all week (see Chart 1).  The external trigger was the rise in rates (see Chart 2).   I had discussed the risk of  rising bond yields in a earlier post on January, 11.   The stock market conveniently reversed after reaching the upside Dow target range that I identified two weeks ago (see Chart Read More 

Trend Check with Tushar Chande

Risk of Reversal Rises with Parabolic Move

by Tushar Chande

The powerful January rally has turned "parabolic" across all key indexes, increasing the risk of a market reversal.  The sheer flow of investment dollars into stocks has driven the acceleration in prices, but this flow is also nearing an extreme (see BAML), increasing the risk of a reversal.  Eventually this rocket will run out of fuel and the so-called parabolic rise will lead to a correction.   Chart 1: The strong move in January has the look of an accelerating parabolic advance.  Note how the stochRSI in the lower panel has not dropped below 0.20 since early Read More 

Trend Check with Tushar Chande

5 Lessons from Trend Analysis of Vanguard ETFs (And How to Profit From Them)

by Tushar Chande

Vanguard allows us to take a keen look at a very well diversified portfolio of ETFs.  Analyzing their trend strength offers insight in to market action, and offers guidance into constructing profitable portfolios for our own purposes. Chart 1: This trend strength distribution analysis of the universe of Vanguard ETFs shows that fully 60% (mostly equity related ETFs) are trending higher strongly.  Bond and bond-related ETFs are at the right hand edge, trending lower strongly.   1. Market Trend Strength is broad and deep Read More 

Trend Check with Tushar Chande

Strongest Semiconductor Stocks (Plus: Will this Market Ever Pullback?)

by Tushar Chande

Topics: Semiconductor stocks breakout; ESIO bottoms; KSS and TCF breakout; is the Dow within hailing distance of a pullback?  The semiconductors which were hit hard in November during the rotation into Financials have rallied to new highs. I will show the strongest stocks propelling this rally.   Chart 1: The $SOX index broke out to new highs, after enduring a significant sell-off during the rotation in to Financials in November.  It's bounce has largely followed my analysis (see here and here).   $SOX Makes New Read More 

Trend Check with Tushar Chande

Strong Stocks Leading to Bear Market in Bonds and Men?

by Tushar Chande

Bill Gross announced irreverently that there is now a bear market in bonds and men.  Elsewhere, Ralph Acampora opined that this market is stronger than the 1990s stock market.  Both may be right at least on the markets: the charts certainly support their contention. Elsewhere, airlines are taking flight, and oil services are pumping profits.   Stock Market Is Very Strong I had remarked last week that the broad market is very strong (see Chart 4 of that post).  This week we Read More 

Trend Check with Tushar Chande

Which are the Strongest (and Weakest) Dow 30 Stocks?

by Tushar Chande

With the Dow closing above 25,000 for the first time ever, I take look at the components of the index and show which ones are strongest (and the ones driving the index higher).  I also look at NVDA and the $SOX index to show that the sell-off that caused the rotation out of tech and into financials has been mostly reversed within the past few days.  The broad market continues to be very strong, and I use the NY Composite chart to illustrate this point.  Lastly, I look at the key index and sector ETFs and show how they compare to the SPY ETF. Chart 1: The mythical "average" Read More 

Trend Check with Tushar Chande

2018 S&P 500 Forecast: Flat and Volatile (With New Sector Comparison Tool)

by Tushar Chande

Topic:  Historical model forecast suggests a flat 2018, with the potential for a volatile year.  The impact of tax law changes and mid-cycle elections could be the wild cards posing the biggest risks to my forecast.  A flat market forecast implies technical analysis will be more relevant than ever: so I show a new tool using SCTR and the Chande Trend Meter to make a joint measurement of relative and absolute trend strength. Chart 1: The 2018 forecast assuming a starting value of $SPX 2682.  The model is essentially flat, i.e., it is not expecting strong trends, but Read More 

Trend Check with Tushar Chande

Beneficiaries of Tax Reform

by Tushar Chande

How to find beneficiaries of tax reform? Well, four stocks stood out today: Blackberry (BB), FedEx(FDX), Wells Fargo (WFC) and Verizon (VZ).  They broke out to new highs as the tax reform legislation completed its journey through Congress.  One way you can search for the beneficiaries of tax reform is to look at jumps in SCTR or the Chande Trend Meter (CTM).  Another is to look at industry group trend strength via the CTM. I will briefly illustrate both approaches below. Chart 1: FedEx jumped higher as it is expected to benefit from the new tax regulations. Read More 

Trend Check with Tushar Chande

What Causes a MACD Divergence? (With Scan Code to Detect MACD Divergences)

by Tushar Chande

This blog post is for short-term players looking for counter-trend opportunities. This blog post explains why we observe divergences between the MACD indicator and stock prices.  I also describe the scan code for automatically detecting divergences using the StockCharts scan engine on daily and weekly data.  Short-term and swing traders can now automate the search for MACD divergences via this post.  Longer-term players will gain insight into how the MACD works.        Read More 

Trend Check with Tushar Chande

S&P 500 Pauses to Refresh

by Tushar Chande

Topics: Market consolidates under all time high; guessing support for $SPX; gold breaks down; semiconductors find support; dollar forms higher low, looks stronger technically.  A big thank you to Tom and Erin for inviting me to their Market Watchers Live show (on 12/06/17) and to all their listeners who tuned in and responded with questions and comments.  There are some references for you below (that connect to the discussion on the show).   Chart 1: The year-end forecast can be found here and here.   Read More 

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