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About this blog: is our free newsletter for individuals interested in technical trading and chart analysis. It is sent out twice a month via email. This blog contains early-access, preview versions of the articles that later appear in the official newsletter.

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ChartWatchers

Recent Pullback in Commodities Is Likely Tied to Stock Correction

by John Murphy

My January 27 message wrote about a bullish breakout in commodity prices to the highest level in two years. I took that as another sign that inflation pressures were starting to build. The weekly bars in Chart 1 show that bullish breakout taking place in the Bloomberg Commodity Index (circled area). During February, however, commodity prices have sold off enough to call that upside breakout into question. In my view, it probably doesn't. Commodity prices have been rising on signs of a growing global economy which increases demand for raw materials. As a result, commodities and stock prices Read More 

ChartWatchers

Big Scores Made Possible through Extreme Patience

by John Hopkins

I'm sure most traders get tired of being told to be patient when the market or a specific stock is climbing day after day. Missing out on nice rallies can be extremely frustrating. But if there ever was a time when patience paid off big time it was over the past few weeks. Before I share the results of some recent trade results with you I want to point out our formula at Earnings Beats, because it's simple. We scan for stocks that beat earnings expectations - top and bottom line - examine the market reaction to the earnings and then wait for pullbacks to strategic levels that could prove Read More 

ChartWatchers

Natural Gas In February - Yes Really

by Greg Schnell

Natural Gas has been testing the $2.60 level for two weeks now. I have placed arrows around the centre of the first quarter in each of the last six years. By watching Natural Gas closely right now, there can be a great 4-6 week trading opportunity that is not correlated to the equity market indexes.  Zooming in on the daily, Natural Gas is testing the lows. I have included the Commodity Channel Index (CCI) Indicator below the chart. One of the reasons to look for a bounce here is the test of the 4th quarter lows. It is not uncommon for Natural Read More 

ChartWatchers

History And Fibonacci Say We Topped On Friday

by Tom Bowley

Fear ramped up with the early February selling and a capitulatory bottom (at least short-term) printed.  The Volatility Index ($VIX) doesn't hit the 40-50 zone often and, when it does, it typically coincides with a panicked selloff and bottom.  The last time we saw panicked selling (before the past few weeks) was in August 2015.  Let's take a trip down memory lane: The drop was a little more than 10%, the VIX spiked to 50, a major counter trend rally topped at the 61.8% Fibonacci retracement level and we experienced a false breakout above the 20 day EMA - all Read More 

ChartWatchers

Where Did All Those New Lows Come From?

by Arthur Hill

Stocks rebounded this week as the S&P 500 Equal-Weight Index ($SPXEW) recovered most of the losses from the previous week. On a closing basis, the index fell around 10% in nine days and then recovered around half of this loss with a 5.4% gain the last six days   What a ride! Despite the strong recovery, the 10% decline did some technical damage and I was surprised by the surge in new lows on the NYSE and Nasdaq from February 5th to 9th. In fact, the surge in new lows was the largest since February 2016 and previous occurrences suggest that the market may need more time Read More 

ChartWatchers

Bull or Bear Market Rules?

by Erin Swenlin

Today on MarketWatchers LIVE, I did a workshop on bull and bear market rules. You'll hear many technicians discuss "bull market rules apply" or vice versa. The question is pertinent and timely right now. The jury is still out on whether we are about to enter a bear market phase but that doesn't mean that you don't want to think about 'bear market rules'. We are currently in a bull market. Based on DecisionPoint timing signals, the 50-EMA is above the 200-EMA. However, what about the correction? Let's quickly consider what constitutes a bull or bear market. As I said Read More 

ChartWatchers

Bond Yields Climbing, Gaining on Stocks

by John Murphy

Bond yields are rising a lot faster than a lot of people expected. And that's starting to worry stock holders. The weekly bars in Chart 1 show the 30-Year Treasury Yield rising over 3.00% for the first time since last March and heading up for a challenge of its early 2017 peak near 3.20%. A close above that more important chart barrier would be very bad news for holders of long Treasury bonds which are falling. The bigger news, however, is coming from the faster rise in 10-Year yields. The weekly bars in Chart 2 show the 10-Year Treasury Yield trading at a four-year high and nearing a Read More 

ChartWatchers

Every Setback Presents Fresh Opportunities

by John Hopkins

Traders who are "all in" on the long side hate days like this past Friday when the market got slammed big time, with the Dow down 2.6%, the NASDAQ down 2.1% and the S&P down 2%, the worst overall showing in two years. And if you're wondering if traders were scared on the selling all you have to do is take a look at the VIX which shot up 30% as it reached levels not seen since late 2016. Maybe the most interesting thing - or not - is earnings season has been determined by the analysts to so far have been quite successful with anywhere from 70-80% of companies beating expectations Read More 

ChartWatchers

The NASDAQ 100 And Its Best Seasonal Candidates In February

by Tom Bowley

Identifying The Candidates I've included the month-by-month seasonal information for all NASDAQ 100 ($NDX) stocks in an Excel spreadsheet.  In an effort to identify the best seasonal stocks on the NDX, I first considered the number of years history for each stock.  For instance, I eliminated JD.com (JD) because it only has 5 years of history.  JD performs very well beginning in February, but I want a more representative sample size to feel good about its seasonal tendencies.  For this ChartWatchers article, I eliminated NDX stocks having less than 10 years of Read More 

ChartWatchers

Lithium (LIT) And Rare Earth Metals (REMX) Need Attention

by Greg Schnell

  Lithium LIT Rare Earth Metals REMX Steel SLX Coal KOL Book starts shipping next week! Lithium, Steel and Rare Earth Metals all had a pretty good 2017. Each week on Commodities Countdown, I roll through the commodity markets. Steel (SLX) and Coal (KOL) have been performing well recently, but this week has slowed most charts. Lithium was an all-star performer in 2017 but looks shakier here. If you are a fundamental investor, you are in love with Lithium because of the electric car battery potential. Rare Earth Metals have also been rising on some of these fundamental Read More 

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