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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

Latest Members Dashboard Update - #AWESOME!

by Chip Anderson

Hello again, everyone!  Just a quick note to tell you about an awesome new feature that we just rolled out.  We've updated the Members' Dashboard so that it is now even more customizable and useful.  The change is subtle - you would probably miss it if you weren't reading this article - but it is very powerful. There is now a new little "Gears" button in the top right corner of the Members' Dashboard.  If you don't see it, click on "Members" and then look above the top right corner of the "Market Movers" panel next to the "ChartLists" button.  See it?  Good Read More 

ChartWatchers

Internet Stocks Overbought Amid Slowing Momentum

by Tom Bowley

Internet stocks ($DJUSNS) have climbed roughly 44% since their bottom in late June 2016.  But there are now negative divergences appearing across various time frames and that suggests the summer time could be a period of consolidation, or even a correction.  First, let's take a look at the daily chart: The daily RSI is currently at 73 and there's gap support near 1330 and the rising 50 day SMA support (pink arrow)  - a likely target given the negative divergence in play - at 1339.  Also, Friday's breakout was accompanied by volume that was just below average - another Read More 

ChartWatchers

Finding New Opportunities in an Overbought Market

by John Hopkins

The market has been on fire lately with all of the major indexes hitting all time highs. In spite of some recent weak economic reports, including a miss on Friday's jobs report, and in spite of all of the political "noise" swirling around, stocks have powered higher. In fact, both the NASDAQ and S&P are technically overbought with the Dow not far behind. And the VIX is right near all time lows as it dipped back into the 9's on Friday showing traders are very willing to own stocks. When the market gets stretched like it is now it starts becoming harder to jump in; who want to jump in Read More 

ChartWatchers

Midcaps May Show Truer Picture of US Stocks

by John Murphy

Several of my recent messages have focused on the divergence between large and small cap stocks. Wednesday's message suggested that part of that divergence was due to stronger foreign markets. Large cap multinationals do better when foreign markets are strong, which is the case at the moment. Small stocks are more closely tied to the U.S. economy. So which one is giving us the right story? Midcap stocks may be giving us the truest story of the state of the U.S. market. That's because they're right in between the two other extremes. So far this year, midcaps have gained 4% which is half as Read More 

ChartWatchers

Are You Watching Energy Stocks?

by Greg Schnell

Energy stocks have been declining since December for the most part. This would be one of the best clues that the investors do not like the trends inside the industry. Now the Bullish Percent Index for Energy is under 20%. Here is the good news. The sector can stay down here for a while, but eventually, these stocks will come to life. As a matter of fact, there is a nice rhythm in the momentum for energy stocks. Let me put a few charts up to whet your appetite for a little black wine sometime later this year. First of all, here is the Bullish Percent Index for Energy ($BPENER). We can Read More 

ChartWatchers

The Most Important Assumption in Trading

by Arthur Hill

Trading and investing are all about putting the odds in your favor, and chartists can increase their odds with one key assumption: the trend will remain in force until proven otherwise. Coming from the writings of Charles Dow, this assumption means a trend in motion is expected to stay in motion. In other words, assume that the trend will extend, not end. Using a top-down approach, you can incrementally increase your odds of success by starting with the broad market trend, and then extending your trend analysis to the sector, the industry group and the stock. This article will show Read More 

ChartWatchers

S&P 500 and SPY Trigger New Weekly PMO BUY Signals

by Erin Swenlin

The S&P 500 garnered a new PMO BUY signal on the weekly chart. Now we have two Scoreboards that are completely green. Technology has been a darling for quite some time so it is no surprise to see the oldest BUY signals residing on its Scoreboard. The two SELL signals remaining on the Scoreboards are on the Dow and OEX. The weekly charts for all four Scoreboards are below. Price has stayed consistently over the 17-week moving average since the election. Price is testing the top of the rising trend channel, but of course could move higher and remain within it. My Read More 

ChartWatchers

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 a lot of support for the breakout. The 40 WMA is just below and the first test of the Moving Average is usually a bounce. The lower channel is around 5400 with the 40 WMA about halfway in the channel. Read More 

ChartWatchers

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 Euro surging to the highest level since last October. Improving economic conditions in the eurozone (as reflected in strong stock prices), as well as an uptick in inflation, are supporting that currency. The Euro has the Read More 

ChartWatchers

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. The ETF held just above this EMA and firmed the last two weeks. It got a bounce on Thursday-Friday and a breakout at 79 would reverse the April-May pullback. The Read More 

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