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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

3 Stocks Awaiting A Possible Earnings Explosion

by Tom Bowley

Analysts meet with the management teams of companies and then return to their firms and either buy or sell based on the information they gather.  It's the primary reason why technical price action precedes fundamental information.  If you understand the dynamics on Wall Street, you're in a much better position to profit from it.  Over the past 3-4 months, the stock market endured much volatility and turmoil, sold off hard and then rallied strongly.  Many stocks appear to be technically sound, however, holding up well during the Q4 misery, and are poised for solid Read More 

ChartWatchers

New Pre-Defined Groups And A Look At FAANG Stocks On Relative Rotation Graphs

by Julius de Kempenaer

If you are a regular user of Relative Rotation Graphs you are probably aware of the pre-defined groups (universes) that you can choose from when you open the drop-down box at the top op the chart. In order to make life easier (for our users) and provide structure, I am working on a project to get more pre-defined groups added to that list. A few months ago the group "Asset Allocation" was already added at the top of the list and a few headers were inserted in the list to make it more readable. The most used and probably most Read More 

ChartWatchers

Separating the Contenders from the Pretenders

by Arthur Hill

The S&P 500 is in the midst of a big run that lifted most boats, especially financial stocks. Even though these stocks are leading with the biggest gains over the last three weeks, most big financials are still in downtrends overall and below their 200-day SMAs. Take Citigroup for example. Even with the big surge, Citigroup remains below its November-December highs and nowhere close to a new high. The stock has merely returned to the breakdown zone in the 65 area. This suggests that it is more pretender than contender. True contenders (leaders) are above their November-December highs Read More 

ChartWatchers

January Stock Rebound Continues

by John Murphy

Editor's Note: This article was originally published in John Murphy's Market Message on Friday, January 18th at 11:01am ET. All major U.S. stock indexes have exceeded their 50-day averages (blue lines). That still leaves their 200-day averages to contain the rally. But there are a couple of other resistance lines that still need to be tested. Chart 1 shows the Dow Industrials nearing a test of their 200-day average (red arrow). In addition, the falling trendline drawn over its October/December highs should also provided stiff overhead resistance. The Dow would have to clear both barriers Read More 

ChartWatchers

Railroads Are Rolling

by Greg Schnell

Railroads are back in an uptrend after the fourth-quarter correction. I like to keep track of the railroads and their relative strength compared to the $SPX. Most recently, the relative strength panel pulled down to the trend line and bounced off again; a nice bullish setup. Moving to the individual railroads, Kansas City Southern had a monster week. Price soared almost 8%! This follows an already big week last week. Since the December lows, the stock has gone up a massive 22%. The SCTR shows that KSU is moving into the top quadrant for price Read More 

ChartWatchers

Earnings Season Kicks into High Gear - Be Prepared to Profit

by John Hopkins

Earnings season began in earnest last week, with major financial companies being rewarded and helping to lead the market higher. It's one of four time periods during the year when publicly traded companies share their earnings results so that investors can get a sense of the financial health of each company. The response to each earnings report can be quite different. For example, Goldman Sachs reported their numbers last week, with the stock soaring 10% as traders cheered their results. However, for every company that beats expectations and is rewarded handsomely, there's another company Read More 

ChartWatchers

Utilities Sector (XLU) Lights Up a New PMO BUY Signal

by Erin Swenlin

Sector rotation continues to favor the defensive sectors of Health Care, Consumer Staples, Real Estate and Utilities. Some of the more aggressive sectors are perking up now, with Financials actually making the biggest gain of the past month. Utilities in that same timeframe haven't done so much, but, in the short term, they are starting to look bullish. Here's the Sector Summary for the past month. Financials are beginning to lead, which is positive, but technology could use a boost. In the past year, the clear "winners" have been the Read More 

ChartWatchers

2019 Stock Market Forecast And My Report Card For 2018 Forecast

by Tom Bowley

Before I look ahead to what we might expect in 2019, let me rewind for a bit and check out last year's forecast.  Here's a recap, summarizing a few of my "expectations".  I've graded my predictions with a slight curve.  Feel free to agree or disagree.  :-)  (1) Reviewed both renewable energy ($DWCREE) and home construction ($DJUSHB), the two best industry performers in 2017.  I evaluated both heading into 2018, but preferred the DWCREE and warned about losing the rising 20 week EMAs as that could signal a trend reversal.  I mentioned that Read More 

ChartWatchers

Wringing In The New Year

by Greg Schnell

With a wretched finish for the fourth quarter of 2018, I found many colleagues and friends weren't so much ringing in the new year as they were wringing it in. With almost every professionally-managed portfolio holding meaningful levels of the FAANG stocks, there was a dark shadow cast across the money managers for ignoring the risks of declining momentum. With major portfolio dips, everyone is wondering what to do next. The markets already went down 20% from the highs, so it could be expected that a rally will start the year. It is the question of how the year 2019 is going to Read More 

ChartWatchers

EARNINGS: S&P 500 P/E Overvalued, But Back In Normal Range

by Carl Swenlin

S&P 500 earnings for 2018 Q3 have been finalized. The following chart shows us the normal value range of the S&P 500 Index. It shows us where the S&P 500 would have to be in order to have an overvalued P/E of 20 (red line); fairly valued P/E of 15 (blue line), or an undervalued P/E of 10 (green line). There are three hash marks on the right side of the chart to show where the range markers are projected be at the end of 2019 Q3. Last year price was well above the traditional value range; however, the recent price decline has lowered the P/E to 19, and the market is back within Read More 

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