Finance

With a string of positive economic reports lifting stocks this week, the S&P 500 ETF (SPY) closed higher for the fifth consecutive week. Friday was a big reporting day with Factory Orders showing strength, IWM Services indicating expansion and the employment rate coming down. These positive reports should not come as a surprise because stocks,...

The FOMC meets next Tuesday-Wednesday and will make its policy statement Wednesday afternoon. With stocks surging and recent economic reports buoyant, the bond market may be looking ahead to this meeting with trepidation. The first chart shows the 10-year Treasury Yield ($TNX) rising sharply the last three day. Treasury bonds rise when treasury yields falls....

The Nasdaq 100 ETF (QQQ) is showing relative strength this year with a triangle breakout and surge above its early December high. On the daily candlestick chart below, QQQ surged in October and then consolidated in November-December. This consolidation started wide in November and then narrowed in December as a lower high and higher low...

The Retail SPDR (XRT) remains one of the strongest ETFs in the market. As a core part of the consumer discretionary sector, retail is one of the most important industry groups and Christmas is perhaps the most important season. A lot is riding on the consumer this holiday season. The chart below shows XRT bouncing...

While gaps are not what they used to be, there were a few island reversals on the charts this week. The chart below shows the Nasdaq 100 ETF (QQQ) with a large island reversal over the last three weeks. A bullish island reversal forms with a gap down, a consolidation and then a gap up....

A number of bearish developments have emerged on the weekly chart for the Russell 2000 ETF (IWM). This weekly chart extends two and a half years to cover the long-term situation. First, the ETF broke support with a sharp decline in August and then exceeded the July 2009 trendline. Second, the subsequent bounce met resistance...

Earlier this week I noted that the Nasdaq 100 ETF, the Russell 2000 ETF and the S&P 500 ETF were testing broken resistance. The October surges produced breakouts and it is important that these resistance breakouts hold. Basic technical analysis teaches us that broken resistance levels turn into support. Failure to hold these breakouts would...

The US Dollar Index ($USD) was hit hard this week with a 2.2% decline. Weakness in the Dollar buoyed oil and stocks, which have been negatively correlated with the greenback. Dollar weakness and Euro strength is also associated with the risk-on trade. Despite this week's decline, the bigger trend is still up and support is...

After hitting resistance at a key retracement this month, the Technology ETF (XLK) fell with what looks like a continuation of the bigger downtrend. First, notice that the ETF formed a massive Triple Top that extends from January to July. XLK became oversold with the July-August breakdown and then retraced 61.80% with the bounce back...

The S&P 500 peaked in early July and declined sharply into early August. There has been a rebound from this low, but all sectors are still down since July 8th – except one. The Utilities SPDR (XLU) is the only sector SPDR showing a gain since July 8th. The first PertChart shows absolute performance for...

The Euro Currency Trust (FXE) opened strong on Monday, but moved lower throughout the week and closed near its low for forge an outside reversal. An outside reversal occurs when the high is above the prior high and the low is below the prior low. A close below the prior open reinforces the reversal. While...

Selling pressure since July 1st pushed the Consumer Discretionary SPDR (XLY) from a market leader to a market laggard. These Sector PerfCharts show the performance for the nine sector SPDRs relative to the S&P 500. The percentage change shown is the relative change, which equals the percent change in SPY less the percent change in...