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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

Climactic Breadth Readings: Buying Exhaustion or Initiation? - Whipsaw BUY Signal for SPX

by Erin Swenlin

The SPX whipsawed into a Price Momentum Oscillator (PMO) BUY signal, suggesting a short-term rally is up next. Climactic breadth indicators popped on Friday and the VIX penetrated the upper Bollinger Band. When I see these types of readings, I classify them as a buying exhaustion or buying initiation.  Below you can see in the thumbnail that the PMO triggered a SELL signal on Thursday, but Friday it went back on a BUY. I've been discussing in prior blogs and on the MarketWatchers LIVE show that if the market is to avoid a bear market, it needs to bounce off the rising bottoms Read More 

ChartWatchers

Toys Are Starting To Surge Again

by Greg Schnell

The toy business has been in a massive uptrend if you are in the right stocks. It is a fickle business group as they seem to treat the shares aggressively. Buy the good ones quickly, sell the weak ones even faster.  This week, Activision (ATVI) closed above 5-week highs on the strongest positive volume in a year. This stock seems to give one full stochastic signal a year, and it just gave us a signal here. The three year weekly chart is shown. Electronic Arts (EA) also had a strong week. With huge volume Thursday and above average volume on Read More 

ChartWatchers

The Bird's Eye View: Big Advances Deserve Big Corrections

by Arthur Hill

2018 has been a tough year for stocks with the S&P 500 SPDR (SPY) basically unchanged (+.08%) for the year. During this journey to unchanged, SPY was up around 7% at its late January high and down around 5% at its February low. The index has since gyrated within the range set from this high and low.  The chart below shows this year's price action with a large triangle taking shape as the range narrows. The overall trend is still up because the 50-day SMA is above the 200-day SMA, the 200-day SMA is rising and price is still above the 200-day SMA.  Read More 

ChartWatchers

Stocks Are Ending The Week On a Strong Note

by John Murphy

Editor's Note: This article was originally published in John Murphy's Market Message on Friday, May 4th at 3:50pm EST STOCKS REBOUND OFF 200-DAY LINES Chart 1 shows the Dow surging more than 300 points after surviving another test of its 200-day average yesterday. Chart 2 shows the S&P 500 doing just as well. Both indexes still need to exceed their 50-day average and their mid-April peak, however, to signal that stocks are turning higher. The Nasdaq market is doing even better. Chart 3 shows the PowerShares Nasdaq 100 (QQQ) trading back over its 50-day average. The Technology Read More 

ChartWatchers

Profiting from Weak Earnings

by John Hopkins

Analysts will tell you that this earnings season has been a great success. In fact, many companies exceeded earnings expectations and were handsomely rewarded by the market. However, there were also plenty of companies that missed earnings expectations and/or provided worse than expected guidance, taking those stocks lower, and some very substantially. For example, take a look at the chart below on SNAP, a company that reported its earnings after the bell last Tuesday. As you can see, the stock lost 25% of its value in just two days at its low on Thursday, predominantly because it Read More 

ChartWatchers

Commodities Taking Over From Equities?

by Julius de Kempenaer

For a very long time equities have been the dominating asset class, stuck at the right-hand side of the Relative Rotation Graph showing six different asset classes. That situation is now changing. Equities (SPY) is still at the right hand (positive) side of the RRG but inside the weakening quadrant, since seven weeks, and heading towards the lagging quadrant. Fixed income related asset classes are all inside the improving quadrant and rotating towards leading while Real-Estate is showing a very wide rotation with a very long tail and showing up at the highest Jdk Read More 

ChartWatchers

Bloomberg Commodity Index Testing Its 2018 High -- Upside Commodity Breakout Would Signal Higher Inflation -- Rising Commodity Prices Push Bond Yields Higher

by John Murphy

Editor's Note: This article was originally published in John Murphy's Market Message on Thursday, April 19th at 12:11pm ET BLOOMBERG COMMODITY INDEX IS NEAR AN UPSIDE BREAKOUT This week's surge in commodity prices is starting to attract a lot of attention. That's because rising commodity prices are a leading indicator of inflation. Rising commodity prices have a lot of intermarket implications. For one thing, rising commodity prices usually cause Treasury bond prices to fall and yields to rise (as they're doing today). That usually helps Read More 

ChartWatchers

Go Away In May? Not If You Own This NASDAQ 100 Stock

by Tom Bowley

One of the most over used cliches in the stock market, in my opinion, is "go away in May".  First of all, it's simply bad investment advice.  Since 1950 on the S&P 500, the May 1st to July 17th period has produced annualized returns of 6.00%.  So if you decide to "go away in May", where will you park your long-term money in today's environment and beat 6%?  Granted, that 6% return is not guaranteed, but it is the historical return for the period listed above and it's not bad considering that a 10 year treasury note yields 2.95%. A better piece Read More 

ChartWatchers

Three Strike Trend Following with the PPO

by Arthur Hill

The Percentage Price Oscillator (PPO) is mostly used as a momentum oscillator, but chartists can also use it to define the trend, even the long-term trend. Chartists interested in trend signals can simply ignore the wiggles and the signal line, and instead focus on zero line crossovers.  As noted in ChartSchool, the PPO is the percentage version of MACD because it measures the difference between two EMAs. The PPO takes MACD a step further by dividing this difference by the longer EMA. MACD shows the absolute difference, while the PPO shows the difference as a percentage of the longer Read More 

ChartWatchers

What a Trip! PMO Finds Two Travel & Tourism Stocks Poised To Take Off

by Erin Swenlin

This afternoon I ran one of my PMO scans (you'll find the link to my most popular scan in the link at the bottom of this article) and found two Travel & Tourism stocks that I found quite interesting. What I look for are Price Momentum Oscillator (PMO) readings that are rising or have had a positive crossover along with a favorable price chart. TripAdvisor (TRIP) and Booking Holdings (BKNG) both fit the bill. TripAdvisor (TRIP) hasn't yet broken out above resistance at $42 and declining tops line resistance is also right around there. I am looking for a breakout here Read More 

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