Recent Posts from Chart Trader and System Trader:
Six Leaders, but One Is Getting Real Frothy
After sharp declines into mid April, stocks rebounded over the last three weeks and the S&P 500 SPDR (SPY) came within 1% of its March high. This March high acts
ChartTrader – SPY and QQQ Hit their Make or Break Levels – Symbols: KBE, VRTX, CLFT, UNP, ORCL, VRNS (Premium)
There is no change in the broader market situation. Short-term, SPY and QQQ are at their make or break levels for this oversold bounce. Why? Because the short-term breadth indicators have yet to show enough upside participation
ChartTrader – SPY and QQQ Hit Moment of Truth – Symbols: ITB, LEN, DHI, CIBR, CRWD, SKYY, IGV (Premium)
SPY and QQQ are at their moment of truth for the current bounce. Stocks surged the last three days with SPY gaining 3.24% and QQQ advancing 4.44%. The current bounce started after oversold conditions in mid April. Over the last 11 days
Is this a Dead-Cat Bounce or a Bounce with Legs?
Stocks fell sharply into late April and then rebounded over the last two weeks. SPY fell 5.34% from March 28th to April 19th and then rebounded with a 3.26% gain the last two weeks. Does this bounce have legs? Chartists can separate
ChartTrader – Correction within Uptrend for SPY/QQQ, Symbols: TLT, XLV, XBI, KBWB, IGV, CIBR, SKYY, SOXX (Premium)
The Fed has come and gone, but earnings season remains in full swing and SPY is in corrective mode. This is not an ideal time for stock setups and signals. Volatility is above average and I prefer to avoid setups in stocks with upcoming earnings reports. As such, today’s report focuses on ETFs
ChartTrader – Correction within Uptrend, Oversold Bounce within Correction, Symbols: TLT, $TNX, XLU, XLP, PBJ, URA, SOXX, TXN ADI, MCHP (Premium)
Volatility is on the rise as we saw outsized declines into mid April and breaks below the 50-day SMAs for SPY and QQQ. Both rebounded the last six days and they are approaching the underside of their 50-day SMAs, which may turn into resistance. Overall, the long-term evidence remains bullish for stocks, but the short-term evidence
ChartTrader – Defensive Sectors Lead, Offense Lags, Correction Underway, Correction Lessons from META and NVDA (Premium)
Some 75% of stocks in the S&P 500 and Nasdaq 100 report earnings in the next three weeks. Ugh! META reported last night and the stock fell around 13% in after hours trading. Microsoft (MSFT) and Alphabet (GOOGL) report after the close today. AMZN reports on April 30th, Apple
ChartTrader – Finding Clues to Signal an End to the Correction, Tech ETFs Lead Lower, Defensive ETFs Hold Up (Premium)
Stocks were hit with strong selling pressure in April, but the weight of the evidence remains bullish. This means the decline is viewed as a correction within a bigger uptrend. Most stock-based ETFs and stocks will remain under pressure as long as SPY and QQQ are in corrective mode. I am marking
ChartTrader – Outsized Declines, Bearish Breadth Thrusts, Oversold Conditions and Correction Targets (Premium)
Stocks were hit with strong selling pressure here in April. This selling pressure triggered outsized declines and bearish breadth thrusts. The uptrend, which began with the November breakout, has been derailed. Even so, the longer term indicators are still bullish and this is considered
ChartTrader – Downside Participation Expands, SPY Breaks, QQQ Holds, Yields Rise, SOXX Joins ITB and XRT (Premium)
SPY fell 3.6% so far in April and is below its 50-day SMA for the first time since October. This looks like the start of a pullback because downside participation expanded significantly, just as it did in mid August. Some 83% of S&P 500 stocks were above
Using Outsized Moves to Identify Trend Reversals – Checking in on ITB and SOXX
Trends often start with outsized moves. But how do we measure and identify such moves? Chartists can measure moves in Average True Range (ATR) terms using the ATR Trailing Stop SAR indicator (ATR-SAR). ATR is a volatility indicator developed by Welles Wilder.
ChartTrader – ATR-SAR Holds for SPY/QQQ, Beaks for XRT/ITB, Yields Rise, Breakouts Fail for ADI/MCHP (Premium)
Weakness is spreading as the 10-yr Treasury Yield rises above 4.5%. Even though the rise is not that sharp, the market is re-pricing interest rate expectations going forward. This is especially visible in the Consumer Discretionary sector and Small-caps. Selling pressure increased markedly over
Internet Boom, Apple’s Run, AI and Nvidia
I am mostly a technical analyst and trading system developer, but I also like to understand the companies behind the
ChartTrader – 4wk HL% Triggers, but Short-term Evidence Still Bullish – Symols: FAN, PRNT, BR, MCHP, NBIX, NTNX, NVDA (Premium)
The weight of the long-term evidence remains bullish, but the short-term evidence is starting to turn as the 4-wk High-Low Percent indicator combo turned bearish. I consider this strike two against the short-term bulls. Strike one was the gap down
ChartTrader – ST Evidence Bullish, IWM Lags, Symbols: XLE, XLC, XLK, IGV, SKYY, CIBR, AMD, FTNT, LLY, HPE – (Premium)
Stocks fell on Tuesday and then recovered somewhat on Wednesday. Overall, SPY is leading the market with the strongest short-term uptrend. QQQ stalled since March 1st, but this is just a consolidation within a bigger uptrend.
ChartTrader – Long and Short Term Uptrends, Watching TLT and $TNX, Symbols: CPER, URA, XBI, VRTX, REGN – (Premium)
The weight of the evidence is bullish for the long-term and the short-term. Long-term, the Composite Breadth Model is positive. Short-term, 4wk High-Low Percent for the S&P 500 and Nasdaq 100 remains net bullish, while SPY and QQQ continue to stair-step higher.
Overbought Conditions Reflect Strength and Said Strength Drives Momentum Rotation Strategies
Momentum and trend strategies are off to a roaring start here in 2024. More often than not, these strategies buy leading stocks that appear overbought. Buying stocks that appear overbought often goes against our “gut feel”, but overbought conditions reflect strong buying pressure and this is clearly
ChartTrader – Participation Broadens, XLV Surges, XLK Stalls – Symbols: IWM, SOXX, XBI, IDXX, HON, MARA (Premium)
The first chart shows 4wk High-Low Percent for the S&P 500, Nasdaq 100, S&P MidCap 400 and S&P SmallCap 600. There is a detailed explanation below the chart. This SPX/NDX combo turned bullish on November 2nd
ChartTrader – 52wk High vs 4wk Highs – Symbols: HUBS, ILMN, SQ, FINX, NOW, IGV – (Premium)
The weight of the evidence remains bullish for stocks, both long-term and short-term. Some groups within the Nasdaq 100 corrected over the last two months. S&P 500 stocks picked up this slack as 52-week highs
An Indicator to Define the Trend and Quantify Momentum
The 200-day SMA is perhaps the most widely used long-term moving average. As its name implies, it is a simple indicator that chartists can use for trend-following and momentum strategies. For trend-following, we just need to know
ChartTrader – Bull Run Extends, Symbols: MDY, URA, GPN, ADSK, DDOG, SWK, VRTX – (Premium)
The bull run continues with the S&P 500 SPDR (SPY) surging 2% the last three days and hitting another new high. Four of the eleven sectors hit new high (Finance, Industrials, Communication Services and Materials). We also saw new highs in several economically sensitive groups: Home Construction ETF (ITB), Retail SPDR (XRT)
ChartTrader – Market Overview – Symbols: IGV, MSFT, ADBE, CIBR, CRWD, CYBR, PANW, ZS, $TNX, XLRE, XLU (Premium)
The weight of the evidence remains bullish for stocks, but I continue to see sizable pockets of short-term and medium-term weakness. Upside participation within the Nasdaq 100 and S&P SmallCap 600 is deteriorating. The S&P 500 is still holding strong and the 4wk High-Low Percent combo
20+ Yr Treasury Bond ETF Resumes its Downtrend
The 20+ Yr Treasury Bond ETF (TLT) failed again at the falling 40-week SMA and looks poised to resume its bigger downtrend. Keep in mind that bonds and yields move in the opposite direction. A resumption of the
Oil & Gas Equipment & Services ETF Resumes its Uptrend
The Oil & Gas Equipment & Services ETF (XES) is showing strength here in March as it breaks back above its 40-week SMA. More importantly, the long-term trend is up and this week’s breakout argues for a continuation of this uptrend.