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

Will Rising Utilities Eclipse the Mega Cap Rally? (With Scan Code For the Top Trending Utilities)

by Tushar Chande

2017 has been the year of the Mega Cap rally, as Mega Cap stocks have handily outperformed other capitalization sectors (see Chart 1).  However, a majority of Mega Cap stocks have just turned lower on a medium-term basis. Is this the start of a correction in the market's leading cap-weighted sector?  In the meantime, utilities are trending higher as a group, when measured with the Chande Trend Meter.  Will Utilities eclipse Mega Caps? (I also include a scan code to find the strongest utilities, which you can edit to find the strongest sector or socks of your choice.) Read More 

Trend Check with Tushar Chande

Has The Curse of Year 7 Finally Caught up with the Market?

by Tushar Chande

Bad things have happened in the stock market during years ending in 7.  However, 2017 has been remarkably calm, and our year-to-date draw-down is the smallest since at least 1947 (see Chart 1). Will the market now play catch-up (or is catch-down?) to its Year 7 history over the next few months?  Inevitably, the sample size is small, but you can read about the quirks in Year 7 returns from LPLresearch ,  Dana Lyons, and Safehaven. Chart 1: The worst yearly draw-down for years ending in 7 since 1947 shows that the 2017 year-to-date Read More 

Trend Check with Tushar Chande

Small Cap Stocks Show Significant Weakness

by Tushar Chande

Small cap stocks have broken down in a noteworthy way, as the down-move I anticipated roils the market. Typically, weakness in small cap stocks is an early warning of weakness in their larger cousins.  First, a majority of stocks in the S&P 600 Small Cap Index have turned lower in all four of my trend following models (see Chart 1).  Second, $SML, the Small Cap index has broken below its 200-day simple moving average (see Chart 2).  Third, the broader Russell 2000 Index has also reached its 200-day simple moving average (see Chart 3).  All three, taken together Read More 

Trend Check with Tushar Chande

Do Large Down-side Gaps In Leadership Stocks Point to Start of Mini Correction?

by Tushar Chande

A change in sentiment is now evident, as profit-taking has opened up down-side gaps greater than 10-day average true range in the charts of key leadership stocks (such as Amazon and Coherent) starting a mini correction as measured by the Guggenheim Equal Weight ETFs: in the short-term only 4 of 9 equal weight ETFs are long, two are flat and two are trending lower.  The data are summarized in Chart 1.  Two sectors, Industrials (RGI) and Health Care (RTH) are in short-term down-ternds.  Two, Materials (RTM) and Technology (RYT) are flat.  Energy (RYE), Consumer staples Read More 

Trend Check with Tushar Chande

July 2017 Review: All Green, With a Small Divergence

by Tushar Chande

My trend-following models are all green, across all four time frames and market breadth at month-end.  However, even as the Dow 30 made new highs over the past few days, other key indexes declined, and one has to watch if this divergence persists, because looking at all the positive July returns in the SPX since 1950, there is only a 24% chance that both August and September will be positive. Chart 1: The trend-following models are bullish, across multiple time frames and market width varying from 30- to over 2000 stocks.   Read More 

Trend Check with Tushar Chande

Is Volume Expansion Necessary for a Successful Breakout?

by Tushar Chande

Conventional wisdom has it that volume expansion must accompany price expansion in order for the price expansion to succeed, i.e., for the breakout to mature into a trend.  But is volume necessary for a successful price breakout? Does price follow volume? A fish out of water illustrates the necessity of water for fish to live. If there is no water then, then there is no fish (Is water? = False results in Is fish? = False).  For us, does Is Volume? = False always mean Is Trend? = False?  (Photo courtesy www.goodfreephotos.com).   Read More 

Trend Check with Tushar Chande

Can this Reslient Market Rally Continue?

by Tushar Chande

This remarkably resilient market is closely following the post-election path I calculated in April.  The rally goes on despite going more than a year without a  5-percent dip, strange headlines, central bank policy changes and the largest (-20%) underweight allocation by top managers since 2008. Is it really that bad?  Can this rally continue? Chart 1: The current market rally is closely following the average of the historical performance during administrations identified in the chart.  The market has shrugged off headline risk Read More 

Trend Check with Tushar Chande

Investing Tips from Warren Buffet's 2016 Purchase of Apple

by Tushar Chande

Last week I wrote about buying a pull-back from recent highs. Here I will discuss buying a mega pull-back. In a bid to learn from the best, I studied the Berkshire Hathaway entry setup for Apple.  Naturally, I only looked at the technical set up from the charts, since I have no idea what factors were actually used to enter the position.   Was the purchase a pure value play, or simply buying growth at a reasonable price?  If you are interested, you will find a lot written about the fundamental factors used in Warren Buffet's decisions, but I have found no technical Read More 

Trend Check with Tushar Chande

Has Gold Broken Head and Shoulders Pattern Neckline?

by Tushar Chande

The SPDR Gold Shares ETF (GLD) seems to have broken a head-and-shoulders pattern neckline, and spent several days below that neckline, suggesting that the pattern has been "definitively" broken.  Gold's correlation to bonds has slipped a bit.  The Chande Trend Meter is below 20, implying trend-following models detect a down-trend.  What is the projected downs-side target, and will GLD get there?   Chart 1: GLD the Gold Shares SPDR ETF shows a clear head-and-shoulders pattern, pointing to a down-side target in the 109-110 range. Observe that the Chande Trend Meter is Read More 

Trend Check with Tushar Chande

Back to Basics: Understand the Duration of Your Bond ETF or Bond Clone

by Tushar Chande

The declines in global bond markets this week points out the need to be aware of your bond ETFs duration, which measures the sensitivity of the bond or ETF to changes in interest rates.  Duration is expressed in years, and the longer the duration, the greater the change in the price of the bond (or bond ETF) for a given change in interest rates.  You may also own bond clones, or ETFs which are closely linked to the bond market, such as an ETF with utilities.  Since such funds have stocks, there is no way to  know their effective duration.  I looked at the universe Read More 

Subscribe to Trend Check with Tushar Chande to be notified whenever a new post is added to this blog!