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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

Three Stocks To Bolster Your September Returns

by Tom Bowley

It's widely known that September historically has been a difficult month for U.S. equities.  Since 1950, the S&P 500 has risen during the month of September 30 times and moved lower 38 times.  It's the only calendar month where the bears have had long-term success.  The September annualized return of -5.58% is one of only two calendar months with negative annualized returns.  The other is August, which has produced annualized returns of -1.04%.  There are several well-known, large cap companies that have bullish track records in September Read More 

ChartWatchers

Combining Relative Rotation Graphs and the (dynamic) yield curve tool

by Julius de Kempenaer

In one of my recent articles, I high lighted that Relative Rotation Graphs can do (much) more than just show equity sector rotation by showing how RRG can be used to analyze rotation among the different commodity groups against a broad commodity index. In this post, I want to expand that a little further and show how you can combine the relative rotation of the various segments of the (US) yield curve with the, relatively unknown, dynamic yield curve tool that we have available here on Stockcharts.com. There is no holy grail Read More 

ChartWatchers

When the Minority becomes the Majority - Weighting the Sectors

by Arthur Hill

The S&P 500 hit a new high in August, but only four of the ten sector SPDRs joined in on this high: the Consumer Discretionary SPDR, the Technology SPDR, the Health Care SPDR and the Real Estate SPDR. This suggests that the other six are lagging in some way shape or more. Even so, this is not a problem for the S&P 500 because the four that hit new highs account for around 57% of the index. Leading versus lagging is important when selecting individual sectors, but the weight of the evidence is what really counts for broad market analysis. The customized Read More 

ChartWatchers

Climactic Indicators and Sentiment Suggest Weakness in Week Ahead

by Erin Swenlin

The market made new all-time highs this week, but with the upcoming holiday and short trading week, look for consolidation or continued sell-off. The indicators in the very short term and short term are suggesting a selling initiation. Add to that the highly bullish sentiment charts and it spells weakness in the week ahead. The ultra-short-term indicators of breadth and the VIX show declining breadth numbers. Granted today advances did outrun declines, but the reading is still lower than the previous positive readings from earlier in the week. The VIX is getting very close to the lower Read More 

ChartWatchers

Late August Rebound in Foreign Stocks Helped Push U.S. Stocks to New Record

by John Murphy

Editor's Note: This article was originally published in John Murphy's Market Message on Wednesday, August 29th at 12:33pm ET. Before leaving on vacation on August 15, I expressed concern about the fact that foreign stock ETFs were lagging too far behind the U.S. which could threaten the uptrend in the S&P 500 which was nearing a test of its January high. The message suggested that U.S. stocks needed more help from foreign stocks in order to reach new highs. In the two weeks since then, foreign stock ETFs have actually risen more than in the states. That helped support new highs Read More 

ChartWatchers

Powerhouse Earnings Power Market Higher

by John Hopkins

Here's a fact: Traders gravitate towards companies that beat earnings expectations. Why? Because they know they are putting their money to work in companies that outperform. Here's another fact. MANY companies that report and beat earnings expectations often gap up - move higher - on positive news and ALWAYS (at some point) pullback to levels that make them attractive trading candidates. Here's a prime example below: As you can see from the above chart on GrubHub, they reported and beat earnings expectations that resulted in a significant gap up on extremely high volume on July 25. The Read More 

ChartWatchers

Facebook: Next Stop Is $150

by Tom Bowley

Facebook (FB) has been an internet and stock market leader for the last five years, but I believe the run is over.  Not only did FB report quarterly revenues that missed Wall Street consensus estimates for the first time in more than four years, but they also lowered future operating margins to the mid-30s% range.  Wall Street was expecting 44% and 45% for the next two years.  That type of operating margin reduction requires a steep discount in valuation and Wall Street is in the midst of revaluing FB.  While the deterioration in fundamentals resulted in a huge Read More 

ChartWatchers

This Week's Scoreboard Shake Up - Momentum Weakens

by Erin Swenlin

This week the market was rocking and rolling with large price swings. The DecisionPoint Scoreboards reflect new negative momentum for each of the indexes, but after logging those Price Momentum Oscillator (PMO) SELL signals, the market did an about-face and began to pull PMOs back up or slow their descent. The SPX and OEX have similar features to their charts so I'll talk about them first. The first thing that I noted visually was the possible head and shoulders pattern that could be developing on both indexes. This is very early in the formation stagethe right shoulder hasn't Read More 

ChartWatchers

Staying on the Right Side of the Market

by Arthur Hill

The first rule of trading is to stay on the right side of the broad market trend. There are different indexes and indicators we can use to determine the broad market trend, but few are as efficient as the S&P 500 and its 12-month EMA. The chart below shows monthly bars for the S&P 500 with the Percentage Price Oscillator (1,12,0), which measures the difference between the 1-month EMA and the 12-month EMA. Note that the 1-month EMA is essentially the monthly close. The long-term trend is up when the PPO is positive and down when the PPO is negative. Showing the PPO as a histogram Read More 

ChartWatchers

Cash Flow Stocks Break Out

by Greg Schnell

Investors in growth stocks had another troublesome week. The bifurcation continued as the NASDAQ 100 $NDX breadth data had a tough week while the $SPX breadth improved. Three stocks of interest showed up on the most active list for the $SPX to highlight the trend. Equifax had a data breach last year in September. While it has rallied well off the lows, this week it started to push above the resistance that has been in place since January.  With the SCTR moving above 80 and the MACD turning up while staying above zero, this looks like a good momentum move. Equifax Read More 

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