Art's Charts

QQQ Holds Small Channel as SPY Holds Flag Breakout

Stocks edged higher in the morning and lower in the afternoon. As a result, the major index ETFs finished mixed on the day with the Russell 2000 ETF (IWM) closing slightly higher and the Dow Industrials SPDR (DIA) closing slightly lower. The Energy SPDR (XLE) led the sectors with a 1.41% surge and hit a 52-week high. XLE is up over 10% from its mid April low and, like the rest of the market, looking ripe for a correction or consolidation. The trend line extending up from mid April defines the short-term uptrend. Broken resistance turns into first support in the 79-80 area.

Charts of Interest: ANF, BSBR, FDX, FNSR, STLD

BSBR Gets Set for another Go at Resistance.
FDX Breaks Pennant Resistance.
Plus ANF, FNSR, STLD

Channels Extend for SPY and QQQ

There are simply no sellers out there. We can argue about low volume levels, the artificial Fed affect and lackluster economic data, but there are clearly more buyers than sellers in the stock market and stocks are rising. Admittedly, stocks are getting quite overextended again and ripe for a rest. Timing such a rest, however, has proven difficult because buyers step in at the first sign of weakness. The S&P 500 ETF (SPY) bottomed on April 18th and is up over 7% since then. The four offensive sectors are up 8% or more. The Basic Materials SPDR (XLB) and Energy SPDR (XLE) are up more than 9%. These six sectors are in runaway train mode, but we will see a correction at some point.

Dollar and Stocks Lead in the Inter-market Arena

Stocks and the Dollar are performing well as both trade near six month highs. This strength is at the expense of Treasuries and gold, which are trading well below their November levels. The US Dollar Index ($USD) is trading at its highest levels since last summer. Spot Gold ($GOLD) has been hit the hardest and is trading near multi-year lows. 


Click this image for a live chart.

AD Lines and AD Volume Lines Hit New Highs

There is no change in the indicator summary as stocks extended their gains again this week. The AD Lines and AD Volume Lines hit new highs. Net New Highs remain firmly positive. Momentum is bullish, if not short-term overbought. However, as we have seen since mid November, the term overbought does not mean much and tends to be over used. Techs are starting to outperform again and the consumer discretionary sector remains the strongest sector in the market.

XHB Forms Bearish Engulfing as Treasuries Surge

Stocks were trading flat most of the day, but got hit with selling pressure in the final hour. As a result, the major index ETFs closed modestly lower. The S&P MidCap 400 SPDR (MDY) and S&P 500 ETF (SPY) fell around .50% on the day. Eight of the nine sectors were down with the Technology SPDR (XLK) sporting the only gain. A bullish reaction to Cisco earnings fueled a rally in the Networking iShares (IGN), which helped the technology sector. Within the consumer discretionary sector, the Home Construction iShares (ITB) and the Retail SPDR (XRT) were down over 1%. The chart below shows the Homebuilders SPDR (XHB) forming a bearish engulfing after a 10+ percent run the last four weeks. Also notice that the stock is overextended as it moved above the upper trend line of a rising channel. Broken resistance and the 50% retracement mark the first support zone in the 30-30.5 area.

Charts of Interest: ALTR, ANN, BG, CIEN, EMC

ALTR surges and forms small flag.
ANN breaks wedge resistance with good volume.
Plus BG, CIEN and EMC.

SPY Hits Channel Trend Line - USO Breaks Support

Stocks extended their uptrends with modest gains. All of the major index ETFs moved higher with the S&P MidCap 400 SPDR (MDY) and S&P 500 ETF (SPY) leading the way. Both were up just less than 1%. Eight of the nine sectors were up with only the Energy SPDR (XLE) moving lower. The Finance SPDR (XLF), Utilities SPDR (XLU) and Consumer Staples SPDR (XLP) led the way higher with gains near 1%. A strong Dollar weighed on precious metals as gold and silver plunged. Gold’s appeal is further diminished when stocks are strong and bonds are weak. The chart below shows the Oil & Gas Equipment/Services SPDR (XES) surging to resistance in the 40-41 area and stalling the last five days. A break above consolidation resistance would signal a continuation higher, but a break below 39.75 would argue for a downswing.

Plunge in Treasuries Fuels Stock Market Surge

Stocks surged and closed strong with small-caps leading the charge. All of the major index ETFs were up, but the Nasdaq 100 ETF (QQQ) and Nasdaq 100 Equal-Weight ETF (QQEW) lagged with relatively small gains (less than .50%). Apple was down sharply and weighed on QQQ. Relative strength in small-caps is positive though and the IWM:SPY ratio has been moving higher the last two weeks. All sectors were up with financials leading the charge. Homebuilders and Retailers were also strong as the Home Construction iShares (ITB) and Retail SPDR (XRT) hit new highs. Stocks were fueled by a plunge in Treasuries as money rotated out of relative safety and into relative risk. Weakness in the 20+ Year T-Bond ETF (TLT) indicates that the bond market is becoming more positive on the economy and employment picture. The Dollar also moved higher as the Euro Currency Trust (FXE) held its support break at 129.

Charts of Interest: ABC, FLIR, HPQ, PG, T

ABC Forms Bear Flag.
FLIR Traces out Rising Wedge.
Plus HPQ, PG, T