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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

You Must Master These Two Things To Trade Successfully

by Tom Bowley

Trading is difficult, emotional and can be quite lonely.  We have seen volatility ($VIX) shoot higher, rising from an 11.61 close on October 3rd to a high of 28.84 on October 11th.  Since then, we've remained above the key 16-17 support level that typically holds during bear markets.  I don't believe we're in a bear market, I'm just pointing out that the last two bear markets saw VIX declines down to 16-17, no further.  Bear markets require a certain level of fear to thrive in.  So far, the VIX is cooperating.  A VIX break below 16 would be a bullish Read More 

ChartWatchers

Taking the Temperature of the Stock Market

by Arthur Hill

The Momentum Factor iShares (MTUM) and the Minimum Volatility iShares (USMV) represent opposing sides of the market. High flying stocks can be found in the momentum ETF, while the more boring issues dominate the minimum volatility ETF. Using these two ETFs, chartists can quickly take the temperature of the stock market and adjust their strategy. The market is running hot and then risk appetite is strong when momentum stocks outperform (risk on). Conversely, the market is running cold and the risk appetite is weak when low volatility stocks outperform momentum stocks (risk off). Read More 

ChartWatchers

You Really CAN Make Money in a Rough Market Environment

by John Hopkins

The quarter beginning 10-1-18 has been challenging for a lot of traders. The NASDAQ has lost almost 10% while the S&P has lost 6%, both well off the quarter's low. Volatility has reigned with the VIX at elevated levels for most of the quarter. It has been challenging for us at EarningsBeats as well, though you might not know it from our results even though, of the 29 trade alerts we issued to our members since October 1, 18 stocks came off with losses. But on a risk adjusted basis - assuming an equal amount of money invested in all 29 stocks - so far we've seen a net gain of over 2.5% Read More 

ChartWatchers

NEW! Introducing "Chart View" For Market And Industry Summary Pages

by Grayson Roze

The more charts, the better. That's my motto, especially this week. I'm happy to announce that our Market Summary and Industry Summary pages have recently received a major upgrade – "Chart View" is here!  We've expanded the functionality of these two important pages, making them even more useful resources to help you track and analyze the current markets. Market Summary Page On our new-and-improved Market Summary page, you'll now see two tabs at the top – one for the original "Table View" and a new tab for "Chart View." This new view Read More 

ChartWatchers

Money Managers Report Lowest Exposure Since Early 2016

by Erin Swenlin

One of the sentiment indicators that I update MarketWatchers LIVE viewers on each Friday is the National Association of Active Investment Managers (NAAIM) exposure reading. A few things you should know about these guys. NAAIM’s membership ranges from small regional firms to large national firms, including hedge fund managers, mutual fund companies and a variety of other firms that provide professional services. Many of them are technicians. They will sometimes be "right" in their exposure in the very short term, but in the intermediate term, price reversals nearly always occur. Read More 

ChartWatchers

The Reason Short-Term Rallies are Failing is Because Weekly Charts Look Even More Negative

by John Murphy

Editor's Note: This article was originally published in John Murphy's Market Message on Wednesday, November 14th at 1:39pm ET. The weekly bars in Chart 2 show the last upleg of the S&P 500 uptrend that began in early 2016. And it shows that uptrend weakening. It shows the October price drop falling below its 40-week moving average (red line) by the widest margin in more than two years, and a rising trendline drawn under its 2016-2018 lows. This week's attempt to regain those two previous support lines is failing. The two weekly indicators in Chart 2 also paint a negative picture that Read More 

ChartWatchers

Experimenting with breadth on Relative Rotation Graphs

by Julius de Kempenaer

Various breadth indicators are used to analyze the underlying strength or weakness of a broad market index like the S&P 500 index or NYSE. Over the years a number of different breadth indicators have been developed and/or used in their work by well known technical analysts. A few names that spring to mind here in the Stockcharts community are Tom McLellan, Carl Swenlin and Greg Morris. "Market breadth" groups a number of indicators that derive data from the underlying market that they cover. Things like the A/D Line, the advance-decline line Read More 

ChartWatchers

These Material Stocks Are Leading

by Greg Schnell

The week that finally bounced! It is always difficult to buy stocks near the lows. The volatility is high and your afraid of further drops. While we never know when the final low will be in advance, we have lots of tools that helps us see an oversold market. That was the case for the bounce we experienced this week as well.  With the bounce, its always good to see what sectors try to lead out of the hole. Materials were clearly one of the leaders.  Within Materials, there were a couple of themes.  CF and Mosaic are both in the Fertilizer space. They both shot up. In Read More 

ChartWatchers

3 Upcoming Earnings Reports I Can't Wait To See

by Tom Bowley

I'm not a fan of buying (or short selling) stocks and holding them into quarterly earnings reports.  It's simply too difficult to manage risk.  Yes, there are options strategies that you can employ to reduce risk so we could debate back and forth the merits of holding stocks into earnings.  For me, though, it's just not something I'm comfortable doing.  I'd much rather trade a stock after its earnings report is in the rear view mirror so I can eliminate one major risk factor. Having said that, I know many of you do like to anticipate positive Read More 

ChartWatchers

Market Overvalued Even on Forward Earnings

by Carl Swenlin

Charts of fundamental data are as useful as price charts in helping us visualize fundamental context and trends. In the case of earnings, the following chart 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). I have added three hash marks on the right side of the chart to show where the range markers are projected be at the end of 2019 Q2. Currently, price is well above the traditional value range; however, assuming no major price advance or decline, and assuming Read More 

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