Posts tagged as Technicals

One of the "Sharpest" Rallies in 60 Years Is Rolling Over

The S&P 500's rally over the past year has been one of the best risk-adjusted rallies in its history, generating a high Sharpe Ratio.

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A Sharpe Rally Thrusts Stocks Into Historic Territory

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The Most Important Index in the World Has Doubled - Now What?

The S&P 500 has doubled from its intraday low, the 9th time the index has doubled.

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As Stocks Double, A Record Run with Record Low Participation

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Mid Year Trade Signal Review

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With Yet Another Positive Month, A Historic Set of Precedents

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Own Any Stocks? There's a 70% Probability You're Underperforming

For one of the few times in history, only 30% of stocks in the S&P 500 are outperforming the index itself.

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Correlations Between Factors Are Plunging

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The Oldest Technical Trading System Just Triggered a Sell Signal

With a decline in the Dow Industrials and Transportation averages, a Dow Theory sell signal has triggered.

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A Dow Theory Sell Signal

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Where Are We in the Typical Sentiment Cycle?

Based on correlations to various parts of a Typical Sentiment Cycle, investors are now in the Enthusiasm phase, and have been for months.

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Stocks Haven't Done This for More Than 6 Months

The S&P 500 has gone more than 6 months without a 5% pullback from a high, a historically long stretch since 1928.

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Over 6 Months Without Even a 5% Haircut

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After These Signals, Gold Usually Couldn't Hold

For the first time in more than 3 months, gold has crossed above its 200-day moving average.

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An Important Window for Gold's Attempted Trend Change

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Watch This for a Big Clue About the Shanghai's Potential

The Shanghai Composite has coiled into an extremely tight range, and which way it breaks will say a lot about its likely future.

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Small-Caps Did This Right Before the Pandemic Plunge

The ratio of Small-Cap stocks to the S&P 500 just fell to a multi-month low, just days after the S&P was sitting at record highs.

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Like Tech Stocks, Small-Caps Plunge to Relative Lows

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When Tech Stocks Do This, It Doesn't Bode Well

The ratio of Technology stocks to the S&P 500 has slid to its lowest level in nearly a year, a bad sign for the sector.

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Tech's Relative Weakness Suggests More To Come

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Nobody Wants to See This Kind of Climax

After hitting 52-week highs, many stocks in the S&P 500 suffered reversals, leading to one of the largest spikes in buying climaxes in 30 years.

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A Historic Surge in New Highs, and Reversals

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This Measure Suggests the IPO Bubble Has Popped

The IPO Index has been consistently underperforming the broader market, setting relative lows against the S&P 500.

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Why this year is putting a nail in technical analysis

This year has shaped up to be one of the worst ever for technical trading strategies as defined by Bloomberg.

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The worst year ever for trading

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Why it has paid to buy on Thursday and sell on Tuesday

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A horrible quarter for safe havens

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The last hour has been a bear

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A chart looks nice, but...

The Nasdaq enjoyed a positive key reversal day on Friday, but history shows that it's an unreliable pattern.

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The best small-over-big start in 20 years

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Speculative volume skyrockets as smart money sells

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A key reversal pushes trends to important junctures

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Short covering in the dollar as the trend turns

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Energy stocks trying to turn golden

For the first time in over 2 years, the energy sector is on the cusp of a Golden Cross, with the 50-day moving average crossing above the 200-day.

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Energy sector on cusp of becoming golden

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The fewest losing streaks in history

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Interest rates turn "golden"

The 50-day average of the 10-year Treasury yield has crossed above the 200-day average, forming a "Golden Cross."

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Uptrends and records are the norm

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6 signs of the coming apocalypse

Warnings by a widely-followed money manager and a major business publication highlight potential risks for stocks ahead.

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Signs of the apocalypse

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Gold just did this for the 1st time in 9 months

For the first time in almost 9 months, gold fell below its 200-day moving average.

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We haven't seen extremes like this in 15 years

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Building on a very good year

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Why are correlations plunging?

The 10-day volatility of the average stock in the S&P 500 has jumped, but the 10-day correlation among them has plunged, an extremely unusual setup.

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Energy sector tries to reclaim its long-term average

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Small options traders come back as buyers press

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The probability of a new bear market is rising, but...

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A surge of small proportions

The small-cap Russell 2000 has seen enough of a push that its 50-day moving average moved more than 8% above its 200-day average.

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Small-caps power broader surge

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A record gap up open

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Oil's historic reversal

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Utility stocks see surge in new uptrends

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For the 1st time in months, yields near their long-term average

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SPY gaps and tail hedges

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Tech stocks see broad, and impressive, recovery

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Energy stocks have been sucking the hind teat for a very long time

Energy stocks have been the worst-performing among all major sectors for 85 sessions in the past year along, ranking among the worst all-time.

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Energy slips into one of the most-hated sectors of all time

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Almost all financial stocks are below their medium-term averages

Almost all financial stocks are below their 50-day moving averages for the first time in months. And most are below their 200-day averages, too.

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Most financials lose their medium-term uptrends

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Russell 2000 is the first to lose its long-term trend

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The dollar's trend seems to be turning, but...

For the 1st time in months, the U.S. dollar has managed to rise above its 50-day moving average.

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The dollar ends its medium-term downtrend amid sour sentiment

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Another correction marks the 4th in only 3 years

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Gold has affirmed its 'pet rock' status over the past 30 days

Over the past 30 days, gold has formed a 'triangle pattern' of consolidation with no new highs OR new lows.

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Gold's triangle pattern will be key tell for miners

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Days after turning negative, Nasdaq breadth surges

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Nasdaq's waning momentum clarifies its analogs

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The Nasdaq's momentum bubble gets pricked

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If the Nasdaq is peaking, it should look like this

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The Nasdaq has run and run and run

The Nasdaq's run over triple time frames has been matched only twice before in its nearly 50-year history.

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The Nasdaq's run, and potential end

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Environment turning healthier but sentiment still a risk

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New highs - with asterisks

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Gold's price path has looked like this about a dozen times before

The past 100 days in gold have seen a remarkable run, but there have been about a dozen times that look very similar. Same with its correlation to tech stocks.

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Gold's analogs and its tight correlation with tech stocks

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The last 100 days have been just like...

The last 100 days have seen a massive, protracted rally in stocks. While it is like the post-2009 recovery, there are higher-correlated periods.

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The last 100 days are the most like...1970?

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Market environment and momentum vs sentiment

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A tale of two S&P's

The S&P 500 Total Return index has hit a new high, but the Equal Weight version of the index is still more than 7% below its own high.

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Two sides of the S&P 500 - total return vs. equal weight

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SPY stretches far above its average traded value

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Stocks are calming down after near-record volatility

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One of the most consistently positive years for the Nasdaq

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More than a quarter of S&P 500 stocks are trailing by double-digits

Even as the S&P 500 index has climbed close to its 52-week high, more than 25% of stocks in the index are trailing the index's returns by 10% or more.

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The highflying Nasdaq 100 stocks have become the "safe" ones

Even as the big tech stocks drive the Nasdaq 100 to new highs with big moves, that index has oddly become "safer" relative to the broader market.

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Too many S&P stocks underperforming by 10%

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Even as big tech soars, they become "safer"

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Copper joins the S&P's technical buy signal

Copper's 50-day moving average has crossed above its 200-day average (a Golden Cross) for the first time in months, but it's an unreliable buy signal.

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Copper turns golden along with stocks

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Tech titans show sign of fatigue with spike in buying climaxes

Monday's reversal in the Nasdaq 100 was confirmed by a near-record number of buying climaxes in those big tech stocks.

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As Nasdaq indexes rallied, oddities have risen

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The S&P 500 and dollar undergo trend changes

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Looking at the last week of a big quarter

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High beta indexes are jumping

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The S&P suffers a weekly reversal, then enjoys a daily one

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Equal-weighted S&P 500 finally starts to shine

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The Nasdaq is almost all the way back

The Nasdaq Composite has almost fully recovered from more than a 30% drawdown from a 52-week high.

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The Nasdaq's short road back to even is golden

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Weekly Wrap: Short-term speculation within long-term recovery

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A wide spread between trends

Almost all stocks in the S&P 500 are above their 50-day averages, but relatively few are above their 200-day averages.

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The most important index in the world has recovered from a devastating deviation

The S&P 500 has closed above its 200-day average after having been more than 20% below it. This is its quickest-ever recovery.

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So many recoveries in trend, it's historic

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S&P fully recovers from its long-term deviation

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A complete recovery in medium-term trends

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The S&P 500 is stuck between time frames

The S&P 500 has been stuck, trading above its 50-day average but below its 200-day average, for over a month.

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Big positive holiday gap

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Weekly Wrap: Signs of speculation continue to pop up

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Stocks have been trapped between time frames

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FOMO takes hold as the S&P can't mount its long-term average

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Bullish percent index shows growing sell signals

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Weekly Wrap: Questionable price and breadth action, with a jump in speculation

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A top-heavy market tends to topple

The top 5 stocks in the S&P 500 have driven 24% of its gains since the March low. That's among the most top-heavy recovery rallies in 30 years.

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The top 5 stocks are driving this rally, and that's not good

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A technical rejection

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What happens when stocks soar during a bear market

The S&P 500 has soared more than 7% above its 50-day moving average, the most since 2011. Yet it's still below its 200-day average.

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Timeframe tensions

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A rally that's powered while traders sleep

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The Nasdaq goes positive

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A front-loaded rally as gains peter out

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The media is focused on a "V" shaped recovery

There has been a record spike in the number of news articles mentioning the possibility of a v-shaped (as opposed to u-shaped) recovery.

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Is it a "V", a "U", or something else entirely?

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Weekly Wrap: A strong start even as economic data plunge

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Rally path given how sectors are reacting

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Stocks have rarely done this before

The S&P 500 has gained at least 1% at some point intraday for the last 6 days. That's one of the longest streaks in nearly 40 years.

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S&P notches yet another big intraday gain

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Small-cap stocks assert dominance

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A record string of gaps

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Russell 2000 sprints ahead of other indexes

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Weekly Wrap: Mixed sentiment during the continued recovery, with divergent sector momentum

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The right sectors aren't leading us out of the bottom

If we take a detailed look at sector leadership heading into the market peak and subsequent bounce, the "right" sectors aren't leading.

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The right sectors aren't leading this rally

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Failed vs successful bear market rallies

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Weekly Wrap: Stocks keep soaring despite poor fundamentals

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An unequal rally

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Where we are in the typical Sentiment Cycle

The typical Sentiment Cycle of investor attitudes has been a good guide over the years and suggests we're in the "discouragement" phase.

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Sentiment cycle is "discouraging"

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Initial surge shouldn't give much back

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Stocks rally on lower volume as gold suffers dislocations

The gold market has suffered dislocations, with spot trading below futures, as speculators gamble. The S&P 500 is rallying on lower volume.

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Big tech trying to push the Nasdaq 100 above its 200-day average

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A historic reversal, but...

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"Just a bear market rally"

The perception is that this is just a bear market rally, but it has clawed back a large part of the decline. Articles about dividend suspensions have spiked.

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It's the retracement that counts

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The importance of follow-through on a big gap up open

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Recovering from under the 200 day average

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Looking to financials for a bottoming clue

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Weekly Wrap: Initial signs of a recovery, even with weak breadth and bad economic data

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S&P's technical sell signal lacks punch

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Weekly Wrap: Historic plunge, compressed stimulus, and massive buying thrusts

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Weekly reversal in S&P 500 and its stocks

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Looking for an intraday change

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Largest reversals from a low

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Uncharted waters as Panic Button hits record

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Russell 2000 falls 20%

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Opening crash even as oversold signals pile up

The largest ETF in the world has suffered one of its worst opening gaps down in history. The selling pressure has triggered a bevy of oversold signals.

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Biggest panics

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A(nother) week for the ages

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What a week

The Nasdaq Composite is the only "big four" index to hold above its 200-day average. Our CNN Fear & Greed proxy model fell to 0%.

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A week for the ages

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Quick pullback from all-time high

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Another panicky morning

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Bulls' nightmare week

The past 2 days have seen a historic selloff in stocks, cycling from new highs to multi-month lows. This week saw back-to-back 90% down days.

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Warnings spike as streaks end

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Island Of Misfit Bears

The S&P 500 formed an island formation. Crude oil has now dropped for 5 straight weeks.

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Market & fundamentals overview: the rally continues

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Stocks, Oil Diverge As Corrections Spike

Stocks are near highs while crude oil hits a 52-week low. The percentage of S&P 500 stocks in correction territory has spiked.

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Dow Turns Negative YTD Amid Rare All-In Risk-Off Days

The Dow Industrials turned negative year-to-date for the first time in 2020. We just saw back-to-back all-in risk-off days across markets.

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Retail Traders Storm Back As Key Reversals Spike

Trading activity at retail brokerages has spiked. Within the S&P 500, more than 10% of stocks suffered key reversal buying climaxes.

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Leading Indicators Lag As S&P Suffers Key Reversal

The Leading Economic Indicators is showing the worst growth in years. The S&P 500 suffered a key reversal day from a high.

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As Good As It Gets For Trend Followers

The S&P 500 has gone 3 months with great gains and very little volatility. There has been a jump in breadth extremes in defensive sectors.

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Writers Have Been Right As Stocks Emerge From Bear Markets

Newsletter writers have been very bullish for 13 straight weeks. Fewer than 10% of stocks in the S&P 500 are now in a bear market.

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Asset Managers Have Record Exposure As Wall Street Favors Technicals

Asset managers are net long a record amount of equity index futures. Wall Street analysts have raised price targets but not earnings estimates.

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Dip-Buyers Are Determined As Volatility Subsides

S&P 500 futures keep selling off overnight then rallying during the day, and volatility has been low for over 30 days.

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Market & fundamentals overview: new year and new decade

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Market & fundamentals overview: Santa Claus rally

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High Yield Funds' RSI Is Overbought

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CRB Index Golden Cross

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Market & fundamentals overview: post-trade war rally?

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MSCI All World and NYSE Composite Indexes Break Out

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Market overview: not QE

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Market overview: examining short term risks

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A Cluster Of Warnings

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Cluster funkIf we focus on one particular data point too much, then we risk getting blindsided by a structural market change or simply a failed signal. That’s ...

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A Bad Case Of The Splits

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.A bad case of the splitsThe Nasdaq exchange continues to see an abnormally large number of stocks hitting 52-week highs and 52-week lows. More than 3% of ...

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Market overview: pullback ahead?

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Double Trouble

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Double troubleFor the first time in several months, two technical warning signs triggered on the Nasdaq exchange. There hasn’t been a cluster, and they ...

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S&P 500 rallies while low volatility stocks fall

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Double technical warning sign on Nasdaq

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Stocks Haven't Done This For 7 Years

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.There’s always tomorrowSince early October, holders of the S&P 500 have not had to suffer back-to-back losses. It’s been 25 sessions since the S&P faced ...

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Risk Is Back, Baby

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Risk on assetsOver the past 50 days, a handful of “risk on” assets have all returned more than 2.5%, while “risk off” assets have all lost more than -2.5%, ...

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Pension Tension

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Public pension tensionPublic pension funds have been adding to their stock allocation, raising it significantly over the past year. They’ve also dropped their ...

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Value Line arithmetic index breaks out to new high

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Market overview: breakout

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Nasdaq new high with < 50% of stocks above 200-day average

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Market overview: with stocks at all-time highs, what's next

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Everything is rallying this year

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Market overview: weighing the bullish and bearish evidence

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Econo-Dread, Options Fear, Money Tree, Dollar Impact On Earnings Season, Transports, Hated Commodities

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3 breakout attempts

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Market overview: lots of chop, no clear direction

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USA Leading The World In Surprises (Both Good And Bad)

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Leading the worldMost of the ways the U.S. has been surprising the world have not necessarily been the good kind. When it comes to economic reports, though, ...

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What I'm looking at - S&P and MSCI trailing earnings, high yield spreads, Sweden PMI, Dow Transports

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Market overview: should you be concerned along with everyone else?

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What I'm looking at - VIX Put/Call, ISM vs S&P, USD trend, small cap earnings

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Market overview: no fat pitch

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Market overview: a little less bullish

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Market overview: almost at an all-time high

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Wednesday Color - Russell vs Nasdaq, Sector Divvies, Bond Whipsaw, Jumps Above BBands

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Market overview: some more signs of macro weakness

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Market overview: looking at the stock market from multiple angles

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Wednesday Color - Stocks Down + Bonds Up, MACD Sell, Energy Lows, Gold RSI

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Market overview: facts over opinion

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Timing A Move Out Of Stocks, As They Whip Around And Bond Spreads Blow Out

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Bond blowoutThe riskiest segment of the corporate bond market has been suffering, while safer bonds have been less of a focus for sellers.That raises the ...

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What I'm looking at - small caps vs. large caps, corporate earnings, bonds, daily swings, RV's

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Stocks Have Gone Absolutely Nowhere

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Going nowhereThe most benchmarked index in the world has gone nowhere for over a year and a half. The S&P 500 was just trading at the same level it was at in ...

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Financials As A Sick Canary

Financial correctionLess than three weeks ago, financial stocks within the S&P 500 were within spitting distance of a fresh 52-week high. Now they’re mired in a correction, having pulled back more than 10% from their high.That’s a quick turnaround, which always worries investors. This was not a ...

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One Of These Curves Is Not Like The Others

Bulls yieldStocks plunged on Wednesday, with the most common excuse being renewed fears of recession due to a further inversion in the Treasury yield curve. Between various maturities, 60% of the curve is now inverted. That preceded a prompt and severe drop in stocks in 2000, but the three other ...

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Monday Color - 8 Straight 1%-ers, Large Calls, Corrections, Gold Buyers, Emerging Momentum

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The Stock-Bond Relationship Is Out Of Whack

Strained relationshipThe drop in stocks over the past week didn’t happen in isolation, as traders fled to the perceived safety of the bond market. That moved the Stock/Bond Ratio to an extreme level, even while the S&P remains in a generally positive environment.This has typically resolved in ...

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Shocks' Strong Tendency To Recover

Shocking^3We’ve looked at “shock days” quite a bit over the years, most recently in May. Monday’s session exceeded the one in May, with a move more than 3 deviations beyond what investors have become accustomed to over the past year.Swift, sharp declines like this almost never end up morphing ...

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Only Black Monday And 9/11 Were Worse Than This

Cluster muckSigns of a “split” market started to trigger in mid-July and continued to accrue into the first days of August. This has been one of the tighter clusters of warning signs we’ve seen over the past 50 years.By the time some of these trigger, stocks have already declined somewhat. By ...

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Tightest Cluster Of Small-Cap Weakness Since '99

A large “small” divergenceOver the past 30 days, there have now been 6 sessions when the S&P 500 was at or near a 52-week high, but the ratio of the small-cap Russell 2000 index to the S&P sunk to a 52-week low. That’s the tightest cluster of days since April 1999.Large, rounded peaks in the ...

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Tuesday Color - Gold vs Yen, Russell Lag, S&P Divergence, Mexican Breadth, Smart Money Selling

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Hindenburg Omen Triggers For The 1st Time In 3 Months

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Thursday Color - Dovish Fed, Sector Extremes, Round #, Value Line Lag, Twitter Bulls

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This Has Only Happened Twice In 40 Years

High confidenceDumb Money Confidence has recovered from its dip below neutral territory in May. Now above 77%, it’s to a level that has preceded weak annualized returns in stocks.As a signal, the first reading above this level after a dip below 50% has led to mostly weak short- and medium-term ...

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Monday Color - Short-Term Optimism, Funds Vs Options, Lagging Small Caps And Surprises, Bulls Return, Bonds

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Tuesday Color - Tech's Recovery, Gold Loss, Sector Breadth, Semi's, Japan's Surprises

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After This Happened, Stocks Fell 15%

A trio of laggardsEven though the S&P 500 recently hit a fresh all-time high, several sectors have been trailing. Small-cap stocks, transports, and banks have all hit new 52-week lows relative to the S&P.This is atypical behavior, with a tendency to lead to selling pressure. When two of the ...

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Tuesday Color - Less Confident, Relative Lows, Bond Optimism, Gold Surge

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350 Days To Nowhere, And Why Lagging Energy Isn't A Problem

350 days to nowhereThe Dow Industrials Average is trying to break out for the third time. It hasn’t gone anywhere since late January 2018, which was 350 days ago. It saw minimal upside and substantial downside since then.If we go back to 1900, there have been a handful of times it went this long ...

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Wednesday Color - Everything Rallies, Bond Flow and Vol, Within 1%, Energy, France

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3rd Time's The Charm?

Rush for the exitThe latest BofAML survey of fund managers showed one of the largest monthly declines in exposure in 20 years. That seems like it should be a contrary indicator, but has been decidedly not, with consistent declines in the months ahead and almost no rallies, which contrarians ...

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Buying Thrust Off A Low

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Wednesday Color - Gaps, Tuesday's Jump, Breadth Recovery, Bitcoin, Corn

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Why This Has Been A Healthy Pullback

From new high to downtrendBarely a month after it was sitting at an all-time high, the S&P 500 fell far enough and fast enough to close below its 200-day average.This is one of the index’s quicker turnarounds from being at a multi-year high to falling below its average. When it had spent at ...

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S&P Cycles From New High To Downtrend

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Stocks Just Did Something They Haven't Done All Year

Shock dayOver the past year, investors have grown accustomed to certain magnitudes of market movements, and Monday’s session was far outside the norm. More than 2.5 standard deviations from the norm, which could be considered a shocking day.When coming within a couple weeks of a multi-year high, ...

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Thursday Midday Color - First Pullback, Weak Sectors, Returning Investors

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The Dow Is Being A Dud

Dow dudThe Dow Industrials dropped below the 50-day average for the first time in months. When it loses its trend after such a long time, and when so near a multi-year high, it has tended to snap back. It was an even better sign for the S&P 500.It was also the only one of the “big four” equity ...

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Dow Drops Below 50-Day Average

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Wednesday Midday Color - Vol Surge, Dow Drops, Sector Extremes

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Friday Midday Color - Momentum Market, Energy Washout, Russell Breakout

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Wednesday Midday Color

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Tech's Perfect Signal

Tech’s fully recoveryOut of the S&P 500’s 11 major sectors, only one has made a fully recovery from the December decline, and it’s an important one. The information technology group has fully recovered from its decline of more than 24%.Other times it fully recovered a drop of 20% or more within ...

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Dumb Money Does A 180

Full recoveryOver the past 50 days, Dumb Money Confidence has averaged 70%, the highest since early 2018. This marks a complete cycle from the extreme pessimism in December. When the 50-day average first breaches the 70% level, it has typically coincided with a temporary reprieve in unrelenting ...

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Surge In S&P For The Quarter, Off A Low, And With Bonds

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Russell's Failed Rally With A Yield Curve Warning

Bear patternThe Russell 2000 rallied for almost two weeks, then failed on Friday and set a lower low. That triggered a classic failed bear market rally attempt.Historically, that hasn’t meant much in the shorter-term, but over the medium- to long-term, risk tended to be higher than reward. These ...

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Dollar Fails And Transports Keep Lagging

Dollar failureThe U.S. dollar hit a new high in early March, and optimism was high. That proved to be a headwind again, and the buck has since reversed to close at a 30-day low.This is an unusually quick reversal and quick reversals in the dollar like this have been a negative sign. During the ...

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Transports / S&P Ratio Hits New Low

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No Pessimism Even As Small-Caps Struggle

No pessimismOn Monday, the last of our core indicators that was showing a hint of pessimism dropped off. At the same time, 40% of them were showing optimism. The last two times that happened, the S&P formed a kind of rounded peak.Since 1999, many of the positive returns were clustered in 2017, a ...

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Hedgers Are Hedging As Transports Lag Amid Momentum Ebb

Hedgers actually hedgingHedgers in the major index futures pared their positions by more than $10 billion at the end of February. That’s one of their larger one-week increases in hedging activity.When they’ve made such big changes in the past, it has been a bit of a negative for stocks.Dow ...

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Wednesday Midday Color

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Tuesday Midday Color

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Options Bulls Return As Investors Get Whipsawed

Options bulls returnThe smallest of options traders spent nearly 60% of their volume last week on bullish strategies, either buying call options or selling puts to open. That’s among the most aggressive bullishness using real money since the financial crisis.There were some weeks that showed ...

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Monday Midday Color

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Sector Correlations During The Rally

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Nasdaq Hugs Its Average As Volatility Recede Despite Recession Risk

A tight hugThe Nasdaq Composite has hugged its 200-day average for more than a week.Bulls and bears could both make an argument for what that might mean, but since 1971 the Nasdaq has powered higher in the longer-term when it showed this kind of indecision around the widely-watched metric, ...

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Crossing A Flat 200-Day Average As Optimism Follows The Thrust

Jumping over a flat averageThe S&P 500 finally closed above its 200-day average after a couple of months below. Because the decline was not that severe or long-lasting, the average was flat.When the S&P has ended a streak below its 200-day average and that average was flat, its returns were ...

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Failing At The 200-Day After Mirror Image V-Shaped Rebound

FailedAfter two months below its 200-day average, the S&P approached it this week but then took a step back on Thursday, closing more than 1% below.Other times it approached its 200-day after at least a month below, and then showed signs of failure, it tended to close above its average soon, but ...

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Nasdaq Escapes Bear Market As Investors Pull Out

Escaping the bearThe Nasdaq Composite has ended its bear market, at least according to two metrics. Unlike its rallies during the 2001 and 2008 bear markets, this time it has managed to exceed the 61.8% retracement of the decline. And it has rallied 20% from its low, the accepted definition of a ...

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Nasdaq Escapes Its Bear Market

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Good Overbought; Dow Leads Above 200-Day

Good overboughtAfter reaching an extreme oversold reading in December, the long-term McClellan Summation Index has cycled back to an overbought reading. What’s notable about this is just how quickly the Summation Index has cycled up to 500 after being so depressed just a month ago. The only time ...

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Emerging Markets Rise Above 200-Day Average

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Last-Hour Binge Buying; Shutdown Ends; Consumers' Flagging Expectations

This is an abridged version of our Daily Report.Happy endingOver the past month, the S&P 500 has rallied more than 0.3% on average during the last hour of trading, one of its largest-ever clusters of gains.Not only has it been aggressive, it has been consistent. As noted by the fine folks at ...

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Holding The Trend; Retail Investors Are Still Active

This is an abridged version of our Daily Report.Holding the trendAs noted by Investor’s Business Daily, the S&P 500 has managed to climb back above its widely-watched 50-day moving average and hold above it for a week straight. This ends a streak of more than 70 days without being able to do so, ...

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S&P 500 Above 50-Day For A Week

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Narrowing Smart-Dumb Spread; 4 Straight Up Weeks

This is an abridged version of our Daily Report.Narrowing spreadAs stocks rally, Dumb Money has become more confident while Smart Money has increased their hedging activity. The spread between the two hit a multi-year extreme before Christmas and is now nearing zero for the first time in ...

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S&P Gains 1% Four Weeks In A Row

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S&P Gaps Following Multiple Up Days In Downtrend

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S&P Nears 50% Retracement; Financial Sector's Big Buying Cluster

This is an abridged version of our Daily Report.Fibonacci hurdlesThe S&P 500 has erased nearly 50% of its October – December decline.Following a loss of more than 15%, this retracement in only 16 sessions is the 3rd-fastest ever. On average, it took a median of 39 trading days to get to the 50% ...

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ETF Traders Not Buying The Rally; Nasdaq Is First "Big Four" Above Average

This is an abridged version of our Daily Report.Not buying itIn the three weeks following the December low, leveraged ETF traders have abandoned long funds while flowing into inverse (short) funds, suggesting they’re betting against the rally. When we look at the largest leveraged index ETFs ...

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The Anti-Hindenburg Omen; Fed Recession Risk Rises

This is an abridged version of our Daily Report.The anti-HindenburgA compelling reason for caution last fall was the kind of split market that triggered a cluster of Hindenburg Omen warning signs. Over the past two weeks, there has been a cluster of signals that are the exact opposite of the ...

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Sentiment Cycle; Ending The Correction

This is an abridged version of our Daily Report.Sentiment cycleDecades ago, Justin Mamis outlined an ideal Sentiment Cycle from greed to fear and back again. Quite a few cycles since then have adhered closely to the ideal.According to a Twitter poll by the well-respected Helene Meisler, most ...

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Best-Ever Retracement; VIX Is Awfully Low

This is an abridged version of our Daily Report.Best-ever retracementTwo weeks into a recovery from a major decline, the S&P 500 has made back more than 40% of its losses. If we go back to 1928 and look at every time the S&P declined more than 15% from a multi-year high within a year’s time, ...

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Starting The Year Off Wrong

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Swift, Severe Decline; Up Volume Thrust; Low TRIN

This is an abridged version of our Daily Report.Stocks just suffered one of the largest, swiftest pullbacks in 70 yearsThe S&P suffered a 17% loss in less than four months.That’s unnerving but is not the kind of decline that happens before or during economic recessions. They are mostly ...

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A Pre-Holiday Review

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Another Volatile Session

This is an abridged version of our Daily Report.Another volatile sessionSome early optimism on Thursday was quickly erased, and stocks dove to new lows for this move. In the process, it triggered several extremes:* The Nasdaq is on the threshold of a 20% decline.* The percentage of securities ...

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New Low Spike; Heavy Selling Cluster

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Equity Risk Premium Collapses; A Day Of Notable Moves; VIX Not Jumping

This is an abridged version of our Daily Report.Equity premium collapsesThe premium that investors are willing to pay for stocks’ earnings has collapsed relative to the yield available on bonds. The one-year z-score of the Equity Risk Premium is now 4 standard deviations below average, a ...

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Long-Term Bears; Russell 2000 Bear Market; S&P Drops On Friday/Monday; Spike In 52-Week Lows

This is an abridged version of our Daily Report.Long-term bearsBuilding on what we looked at last week, we take a longer-term, multi-year look at prior bear markets, including their median loss and standard deviations. We also look at returns following major peaks in Consumer Confidence.The ...

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Investors Flee Equities; Highly-Correlated Declines; December Selling

This is an abridged version of our Daily Report.Leaving en masseInvestors yanked $46 billion from equity funds this week. Even accounting for the usually mid-December outflow, as a percentage of total fund assets, this is the largest outflow in at least 15 years.After the other weeks when there ...

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Bear Market Roadmap; Pessimistic CFOs

This is an abridged version of our Daily Report.Bear market roadmapThere have been 20 bear markets in U.S. stocks since 1950. If we look at their average price path during the next year, the S&P’s performance since September shows a high correlation to 10 of them.After those 10 bear markets were ...

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New Lows In Financials; Buy-The-Rally Is Dead, Too

This is an abridged version of our Daily Report.Financial troublesMore than half of the stocks in the S&P 500 Financials sector have declined to a 52-week low, the most in more than two years.After investors have sold so many in a single sector to this low of a level, it has tended to bounce. ...

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Buy The Dip Is Dead; December Reversal; Smart Money Is Covering

This is an abridged version of our Daily Report.Buy-the-dip is deadOver the past six months, there has been a dramatic decrease in the probability that buyers will step in after weakness. After reaching a 20-year high earlier this year, the probably that investors will buy the drip has dropped ...

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Follow-On Selling

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Largest Gap Since '11; Presidential Services

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A Weak Retracement; A Dollar Milestone

This is an abridged version of our Daily Report.A weak retracementAt its high point of the bounce during the past two weeks, the S&P never managed to retrace more than 61.8% of its pullback from the September peak.It has now started to fail and fall back to the lower end of its range. While ...

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Bear Market In Stocks; Small-Cap Stumbles

This is an abridged version of our Daily Report.A bear market in stocksWhile the major indexes are far from a 20% decline, many S&P 500 components have declined more. At the depths of the decline in October, more than 40% of the S&P reached bear market territory.That often served as a low point ...

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A Bad Month; Wide Confidence Spread

This is an abridged version of our Daily Report.A bad monthThe S&P suffered 16 negative days in October, tied for 3rd worst since 1928 and the most since 1970.The pressure was enough to trigger a sell signal for a popular trend-following strategy, with a close below its 10-month average, that ...

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Massive Sell Programs; Hard, Fast Pullback, Near-Record Negative Momentum

This is an abridged version of our Daily Report.Everybody outDuring the past 3 weeks, we’ve seen a near-record amount of sell programs at some point during the trading day.The lowest NYSE TICK during that stretch is now the 2nd most extreme in history, with an average of more than a net 40% of ...

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A Non-Recessionary Correction; The Trend Is No Longer Your Friend

This is an abridged version of our Daily Report.Non-recessionary pullbackMost recession models show a low probability of an imminent economic recession. If we use a simple, non-optimized, real-time model, it’s currently showing 0% probability.In that kind of environment, 10% pullbacks in stocks ...

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Stocks, Sectors In Correction; Nasdaq's Bad Day; S&P Negative YTD; Spike In Pessimism

This is an abridged version of our Daily Report.Stocks in correctionThe S&P still hasn’t suffered a correction, if we define it by a 10% decline from a 52-week high. With the severe loss on Wednesday, it has just barely missed the cut. Most of its stocks haven’t been so fortunate, however. With ...

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Major Reversal; Jump In New Lows; Dumb Money Purge

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Gap To New Low

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Correcting Oversold; Quick Change In Character; Every Dow Stock Rises

This is an abridged version of our Daily Report.Correcting oversoldThe McClellan Oscillator has gone from extremely oversold to neutral. It was below -90 just a few days ago and is now up to -10.Such a rapid change in character has been a good sign during uptrends, and that context was important ...

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V-Shaped Bounces And Explosion In Hedging

This is an abridged version of our Daily Report.V-shaped probabilityFollowing declines like the past month, v-shaped bounces were common. Almost 40% of the precedents formed a bottom within a couple of sessions. While some short-term volatility was normal, all but a few of the precedents ended ...

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Quick Change In Character; Smart Money Steps In; Emerging Stocks Rebound

This is an abridged version of our Daily Report.A quick change in characterThe S&P went from 52-week high to below its 200-day average in only 3 weeks. That ended a streak of more than six months above its 200-day average. Other times it underwent a quick change in character, from a 52-week high ...

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Index Corrections As Panic Spreads

This is an abridged version of our Daily Report.CorrectionsAfter ending long streaks in uptrends, the Russell and Nasdaq fell into corrections. That has typically led to a poor risk/reward in the months ahead for both.PanicThe selling pressure on Thursday generated at least a couple readings of ...

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Crap And Gap

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Streaks End As Concern Rises

This is an abridged version of our Daily Report.Streaks end as concern risesMajor indexes ended some notable streaks, which were nearing record lengths. The S&P 500 ended months without a 1% move by tripling that to the downside. The Russell 2000 and Nasdaq Composite both ended long periods ...

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A Little Panicky

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Follow-Through Selling

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Just A Whiff Of Panic As Streaks End

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NDX Breaks 50-Day, Breadth Momentum Rolls Over

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Small Starts To Struggle As Confidence Leads To Dollar Peaks

This is an abridged version of our Daily Report.Small hasn’t been so beautifulWhile leading year-to-date, small-caps have been lagging the S&P over the past few months. The ratio of the Russell 2000 to S&P 500 is very close to falling to a multi-month low, a worse sign for small-caps than ...

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Small Business Has Never Been Better As Hong Kong Slides Into A Bear

This is an abridged version of our Daily Report.Never betterSmall business owner optimism is at record highs, surpassing two other periods since 1979.Despite worries about labor, owners have exceptionally high confidence about future conditions. It is backward-looking for stocks, though, and ...

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A Week Of Warnings As Transports Break Out

This is an abridged version of our Daily Report.A week of warningsEvery day last week triggered a Hindenburg Omen or Titanic Syndrome technical warning signal.While they are much-maligned and not immune to failures, similar clusters of these warning signs preceded consistent weakness across ...

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Stocks Shrug Off Economic Reports Amid Buying Follow Through

This is an abridged version of our Daily Report.Shrugging off disappointmentEconomic reports haven’t kept up with economists’ outlooks, but it hasn’t mattered as the S&P 500 has rallied to all-time highs. When stocks hit a 200-day high and economic surprises a 200-day low, future returns were ...

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Dollar Fails As S&P Momentum Stalls

This is an abridged version of our Daily Report.A dollar failureThe U.S. dollar ended a long streak without a new high in early August by closing at its first 52-week extreme in more than 400 sessions.Since then, it rallied more than 1%, then failed by closing below its breakout price, which has ...

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Dow's Long Correction With Positive S&P Breadth

This is an abridged version of our Daily Report.The Dow’s long correctionThe Dow has gone 130 days without a new high or 20% loss, one of its longer stretches in purgatory. Other periods when it got stuck in a correction mostly resolved higher, with a choppy 1-2 months generally leading to new ...

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Leaders Become Laggards As Traders Bet On Volatility

This is an abridged version of our Daily Report.Leaders become laggardsThe Nasdaq Composite and Russell 2000 have lost their 50-day averages after months above, a change from June when both were leading the market. Even with the S&P 500 and Dow Industrials above their averages, future returns ...

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Risk Appetite Wanes As Small-Caps' Trend Ends And Funds See Outflows

This is an abridged version of our Daily Report.Lack of risk appetiteDiscretionary stocks are at a multi-month low relative to defensive Staples.That sign of risk-off behavior is unusual with the S&P near a high but has not been a good excuse to sell stocks.Another trend endedThe small-cap ...

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S&P Nearly Ends Its Correction And Staples Their Downtrend

This is an abridged version of our Daily Report.Still waiting for the cigarThe S&P 500 rallied to within 1% of its previous high, nearly erasing the 10% pullback it suffered earlier this year.Other times it got so close to a high, it took an average of another 4 days to reach it, with generally ...

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Good Growth During Earnings Season As Nasdaq Leads

This is an abridged version of our Daily Report.A great season of earningsEarnings season is expected to bring another quarter of impressive growth.When that growth is high, however, earnings season carries more risk than reward.Tech is leading the chargeThe Nasdaq Composite is leading the four ...

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Russell's Band Bounce And Lack Of German Confidence

This is an abridged version of our Daily Report.Russell band bounceThe small-cap Russell 2000 has bounced from its lower Bollinger Band to its upper in just a week’s time.That kind of rebound has preceded impressive gains over the next six months.German vote of no confidenceA German economic ...

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Stocks Are Stuck As Turnover Explodes

This is an abridged version of our Daily Report.Stuck exactly in the middleThe S&P ended its first half stuck exactly at the midpoint of its year-to-date high and low.It’s more typical for stocks to be near the upper or lower end of their range by mid-year. Similar years led to weak returns over ...

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Emerging Stocks' Uptrend Ends As S&P Suffers 4th-Longest Pullback

This is an abridged version of our Daily Report.Emerging stocks’ long-term uptrend is goneEmerging markets have ended one of their longest-ever long-term uptrends.Risk was high after the others ended, especially over the next two months. They’ve already seen an 8% drop since the trended ended, ...

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Dow's Streak Snapped As China ETF Nears Bear Market

This is an abridged version of our Daily Report.Had to happen sometimeThe Dow Industrials Average ended its 2-year streak of holding above its 200-day average, its 7th-longest streak in an uptrend since 1900.It wasn’t a death knell for the index, especially when the Leading Economic Indicators ...

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Emerging Market's Negative Surprises Even As Nasdaq Hits June High

This is an abridged version of our Daily Report.Emerging disappointmentEconomic surprises in emerging markets have been consistently, and increasingly, negative.That has led to mostly poor returns in emerging market stocks and currencies. It has been better for emerging market bonds (in ...

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Lots Of Up Days Without Much Impact As Dollar Hits Overbought And VIX Spikes

This is an abridged version of our Daily Report.All icing, no cakeThe S&P showed a gain on 57 out of the first 100 days this year, one of its best “first 100 days” ever.Even so, it showed a meager year-to-date gain, suggesting that all those up days didn’t pack much punch. Similar years led to ...

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Russell Breaks Out But Suffers Buying Climax

This is an abridged version of our Daily Report.Small-caps follow breadth to new highsThe Russell 2000 hit a new all-time high intraday on Monday. That’s the first 90-day extreme, high or low, for the index in more than three months.A move to new highs after that long, and with such positive ...

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S&P Breaks Out As Tech, Energy Highs Surge And

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Economic Uncertainty During Midterm Summers As Stocks Form Lower Highs

This is an abridged version of our Daily Report.Midterm summer bluesThe summers of midterm election years are weak more often than not. Supposedly, it’s supposed to get even worse if investors are uncertain about government economic policy.Going back to 1900, however, that doesn’t seem to be the ...

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A Long Correction As Bond Yields Hit Overbought

This is an abridged version of our Daily Report.The correction that won’t endRallies keep failing, and the S&P is now more than 50 days into its correction.A lengthy time in correction territory has led to some severe declines, but even more rallies. Times when the S&P recovered quickly from a ...

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Cancelling Dow Theory Sell Even As Volume Declines

This is an abridged version of our Daily Report.Cancelling the Dow Theory sell signalAfter the Dow Industrials and Transports fell into a Dow Theory sell signal, Transports have caught fire. They just hit a 50-day high, which technically doesn’t cancel a sell signal but it might as well.Forward ...

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Back Above A Technical Level As Volatility Drops And A/D Line Hits A High

This is an abridged version of our Daily Report.Indexes reclaim technical levelsAccording to media reports, Tuesday’s jump in the Dow and S&P above their 50-day averages was important. The Dow does tend to have markedly better annualized returns when trading above its average.But as an all-clear ...

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A "Bearish" Pattern As Traders Flee Dollar Funds

This is an abridged version of our Daily Report.“Bearish” engulfingThe price pattern in the S&P does not look promising, according to textbook technical analysis. Friday arguably was a bearish engulfing pattern that suggests weak buying interest and eager sellers.It has not been a successful ...

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Smart Money Drops As Traders And Economy Favor Dollar

This is an abridged version of our Daily Report.Smart money collapseMonday nearly saw a 20-year record decline in the Smart Money Index that compares first hour vs last hour trading. The past 30 days has consistent seen selling in the SMI, suggesting dumb money buying and smart money ...

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Earnings Season As A Savior As Stocks Get Stuck

This is an abridged version of our Daily Report.Good earnings as a saviorAnalysts expect robust growth in earnings as companies report them over the next four weeks. Good growth is also expected to save stocks as they just corrected ahead of earnings season.This has been a shaky leg upon which ...

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Successful Test As Pessimism Spikes

This is an abridged version of our Daily Report.A few good daysThe S&P dropped down to challenge its February low on March 23. Since then, 3 of the last 6 sessions have been “good” with either a 1% gain or 80% up volume.Over the past 30 years, that has indicated a successful test of a low.Forget ...

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Failed Bounce And Put Purchases

This is an abridged version of our Daily Report.Failed bounceBefore some modest after buying interest, the most important index in the world triggered a failed bounce.That’s one of the most feared patterns for bulls because it shows a complete lack of buying interest. The S&P did suffer ...

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Corporate Bonds Struggle As Newsletter Writers Retrench

This is an abridged version of our Daily Report.Corporate bond strugglesOver the past 30 days, investment-grade corporate bonds have had some of the worst breadth readings in 13 years. Fewer than 42% of bonds advanced, and more than 12% of them hit 52-week lows on average.Forward returns after ...

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SPY's Red Monday Leaves An Island And Death Crosses

This is an abridged version of our Daily Report.A red bull market MondayBull markets sometimes suffer heavy selling following weekend news events, but even so, Monday was severe. It ranked in the bottom 3.5% of all bull market Monday’s since the inception of the popular SPY fund.Other times it ...

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Lopsided Volume Swings As MLPs Suffer Pessimism

This is an abridged version of our Daily Report.Everybody out, then in, then out againDuring the past month, volume has been gyrating wildly between losing, winning, then losing securities. A 3-day average of the Up Volume Ratio keeps swinging from one extreme to the other.During uptrending ...

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Down Days And MLPs

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A "Good" Correction As Silver Specs Give Up

This is an abridged version of our Daily Report.Good vs bad correctionsIn these first two weeks following the Dow’s drop into a correction, it has followed the path of many “good” corrections. Those are times when the Dow fell 10% from a high, then no more than a further 7% during the next ...

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Shades Of '87 In Stock/Dollar/Rate Moves As 50-Day Fails

This is an abridged version of our Daily Report.Shades of ’87 (among others)Over the past year, stocks have rallied, and the dollar has collapses as the Fed raises rates.That is similar to 1987, but there were also other dates that didn’t lead to nearly such dramatic results. After similar ...

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Best Recovery Ever As Investors Flee Bonds

This is an abridged version of our Daily Report.Best recovery everAfter falling into a correction a week ago, the Dow Industrials index has rallied every day and added 5.6%. That ranks among its best-ever recoveries after falling more than 10% below its high for the first time in months.Other ...

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Six-Month Analogs With Record Momentum Shift

This is an abridged version of our Daily Report.Six-month comparisonsLooking at analog comparisons of different time periods is fraught with data-mining risk, but they can still prove useful in some contexts. Looking at how stocks have traveled since August, there have been 26 six-month time ...

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Panic And Reverse

This is an abridged version of our Daily Report.Panic and reverseStocks suffered a panic day on Monday, then reversed early losses to close higher. That matches several other instances that led to consistent returns going forward.There was volatile back-and-forth then another run at the prior ...

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Unfolding Momentum

This is an abridged version of our Daily Report.CrashMonday’s trading – and post-close moves – are the types of action only seen a few times in history. Large, swift declines from a high have tended to lead to capitulatory moves that lead to rebounds in the medium-term. The possible liquidation ...

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Dollar Ignores Rates As S&P Shows Exhaustion

This is an abridged version of our Daily Report.Ignoring the rise in ratesDespite a steady rise in interest rates, the U.S. dollar has declined more than 10% over the past year.That’s unusual, especially given the magnitude of the fall in the dollar and the rise in rates. The other times it ...

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Burst Of New Highs As Optimism Hits 30-Year High

This is an abridged version of our Daily Report.A rare burst of new highsMost of the major indexes and sectors had more than 25% of their stocks hit a 52-week high on Tuesday. Only Staples and Utilities saw fewer than 10% of their stocks hit a new high. On average across indexes and sectors, 27% ...

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Global Momentum Spurs Melt Up Chatter

This is an abridged version of our Daily Report.Global synchronized momentumMost major stock markets are not only rallying, they’re showing extreme momentum. The weekly Relative Strength Index across 6 major global indexes is now the highest in history.High readings in that indicator suggest ...

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Opening Enthusiasm As Wall Street Upgrades

This is an abridged version of our Daily Report.Don’t sleep or you’ll miss itSo far in December, the stock market’s gains have come overnight, with regular trading hours showing a net loss. That is unlike what we’ve seen for most of this year. The Smart Money Index looks at early-morning versus ...

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Record Small Business Optimism As Investors Buy The Dip

This is an abridged version of our Daily Report. Near-record optimism (again)Small business owners are showing nearly the highest optimism readings in 45 years, confirming other surveys that are showing somewhere between multi-year to multi-decade extremes in optimism.High levels in the past led ...

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Closing On Lows, Discretionary Streak

This is an abridged version of our Daily Report. Closing on the lows (WHAT?!)The S&P 500 fund, SPY, has closed near the day’s intraday low for the past two days, an unusual sight during this strong uptrend that has seen so many intraday dip-buyers. It hasn’t closed on the low on consecutive days ...

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Silver's Inconsistent Signs

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Breadth Thrust In Euro Stocks

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Spike In Buying Climaxes

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All Four Major Indexes At New Highs

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3-Month Lows In November

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Gap And Go?

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Reversal Day As A Bottoming Signal

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Big Currency Declines

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Reversing The Reversal

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Streak Without A 1% Loss About To End?

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Biotech Is Taking Off

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Telecom Stocks Fall Into Shorter-Term Downtrends

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The 50-Week / 100-Week "Death Cross" Is Yet More Bunk

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Nasdaq Composite Loses Its 200-Day Avg

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Golden Cross With A Rising 200-Day Average

The Dow Jones Industrial Average is about to enjoy a "golden cross", when the 50-day average crosses above the 200-day average. We've looked at this in various markets over the years, typically with the conclusion that it's mostly useless.The wrinkle being discussed this time is that the 200-day ...

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Crude Oil On Cusp Of 7th-Largest Intraday Reversal

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Crude Oil About To End Record-Breaking Streak

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Back-To-Back-To-Back Reversal

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Every Major Telecom Is Above Average

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Getting Out When Averages Cross

Basic, long-term trend-following systems have become all the rage. Backtested results show that owning stocks, or almost any other asset class, when they are above a long-term moving average (such as 10 or 12 months), and not owning them when below the average, is superior on a risk-adjusted ...

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