StockCharts Blogs - Don't Ignore This Chart!

Waiting for the Breadth Thurst ($RHNYA)

Click here for a live version of this chart

The Record High Percent Index is a market breadth indicator created by dividing the number of 52-week highs for a given market by the sum of the number of new highs and the number of new lows.

Record High Percent = New Highs / (New Highs + New Lows)

The values range between 0.0 and 1.0. A value of 0.0 means that there were no new highs on that day. A value of 1.0 means that there were no new lows on that day. A value of 0.5 means that the number of new highs and new lows were equal.

StockCharts.com computes and publishes three versions of the Record High Percent Index - one for the NYSE ($RHNYA), one for the Nasdaq ($RHCOMPQ), and one for the American Stock Exchange ($RHXAX).

The Record High Percent Index is the basis for another popular index called the Breadth Thrust Indicator. First developed by Martin Zweig, the Breadth Thrust Indicator is equal to the 10-day simple moving average of the Record High Percent Index.

According to Zweig, a "Breadth Thrust" occurs when the Breadth Thrust indicator rises from below 40% to above 61.5% within 10 trading days. The signal occurs when the given market is in the process of changing from an oversold condition to one of strength, but has not yet become overbought. Zweig goes on to say that this signal typically occurs before most bull markets.

"Breadth Thrusts" are rare but significant.  When the market is really ready to rally again, expect to see the red line on this chart to jump.

Chaikin Money Flow Study ($SPX)

Click here for a live version of this chart.

Often we get asked "What settings should I use on my indicators?  What's the best?" and our answer is the always infuriating "It depends."  The chart above shows why "It depends" is always going to be our answer.

I've added six different versions of the Chaikin Money Flow (CMF) indicator to this chart of the S&P 500.  Notice the different frequency with which the CMF lines cross the zero line and turn red.  The shorter the frequency, the more often (in general) the CMF turns red.

What's interesting on the chart above is all the whipsawing done by the 80-day CMF between July 08 and February 09 - and by tge 100-day CMF in March 09.  Very unusual.

Catapulting Bulls (PL)

Click here for a live version of this chart.

The "Bullish Catapult" P&F pattern is a great way to find stocks that are breaking out above resistance.  Today, Protective Life Corp. (PL) was the only high volume stock to create a new Bullish Catapult pattern when it moved above 6.0.  Right now, the catapult line is short but the P&F Price Objective is at PL's recent support line of 8.0.

(Click here for an explanation of P&F Price Objectives.)

Bullish Percent Sector Indices Moving Higher

Click here for a live version of this chart.


Click here for a live version of this chart.

Bullish Percent indexes show the percentage of stocks in a given group that have a "Buy Signal" on their P&F chart.  Above are charts with the 11 different sector-based Bullish Percent Indexes that we calculate here at StockCharts.com (with the S&P 500 BPI thrown in for good measure).

All of the BPIs started moving higher at the start of the month however some appear to be running out of steam right now.  Financial stocks are leading right now with Energy stocks close behind.  Smart investors always know where these Bullish Percent Indexes are going - they are some of the best market sentiment indexes available anywhere.

Singing in the (Ticker) Rain (FAS/FAZ)

Click here to start watching Ticker Rain

This is not your typical stock chart.  This is what you see after running our Ticker Rain program for a while.  It can show you what tickers are popular on StockCharts.com.  More importantly, it can show you what everyone else is looking at.  Each column represents a bunch of chart requests for a particular symbol.  The columns "grow" over time with the more popular symbols growing faster.

For instance, are you aware of the FAS/FAZ frenzy that's going on these days?  FAS (#3) and FAZ (#1) are relatively new "3x" ETFs that lots of traders are using to try and trade the market.

Of course SPY (#2) is always popular, but what about some of those other spikes?  Fire up Ticker Rain for yourself and mouse over the columns to see what people are charting.  I'm sure you'll get a couple of good ideas almost immediately.

Bouncing Off Bollinger Bands (MTXX)

Click here for a live version of this chart

How are your money management skills these days?  Here's a real test for you:

Over the past 10 months, MTXX has been bouncing up and down between roughly 14 and 19.  One of the first signals that the stock is about to start moving higher again has been when it penetrates its lower Bollinger Band (blue arrows).  While extremely risky by themselves, those signals have often been confirmed by MACD Histogram crossovers within a couple of days (red arrows).

By practicing good money management skills (tight stops, well defined exits, etc.), agile traders may be able to take advantage of MTXX's recent history now that it has gone and done it again (green arrow).  The rest of us can watch with interest to see if history will repeat.

Berkshire's "Flight to Safety" Breakouts (BRK/B)

Click here for a live version of this chart.

Continuing to look for "leading" technical signals that pointed to the market's recent crash.  It's always interesting to see how the country's "best" investor did.  Warren Buffet's Berkshire Hathaway had a couple of interesting jumps in its stock price during the period in question.  Comparing the percentage performance of BRK/B to $SPX, we can see two big jumps in 2007 (chart above) and one jump in 2008 (chart below).  Of course, not all jumps in BRK/B are signs of an impending crash - but these charts show that they shouldn't be ignored either.

Click here for a live version of this chart.

Gold at 700 was the Beginning of the End

Click here for a live version of this chart.

The S&P 500 Index (yellow line) hit its most recent high in early October of 2007 (red arrow).  Since then it's been all downhill.  Were there any clear warning signs before the plunge began?

It's interesting to compare $SPX to $GOLD (the red line).  After creeping upwards consistently (on a log scale chart) since early 2001, gold spiked up to 715 in mid-2006 but quickly retreated back to its normal uptrend line.  However, gold's rate-of-increase increased as soon as it crossed 700 the second time in late August (blue vertical line).  $SPX began its fall soon afterwards.

Last November $GOLD retreated back to 705 before rallying again in the face to more bad economic news.  This suggests that the 700 level is important for both stocks and gold.  $GOLD probably needs to move below 700 in order to $SPX to begin a sustained recovery.

S&P Bullish Percent Chart Turning Upwards ($BPSPX)

Click here to see a live version of this chart.

Bullish Percent charts track the percentage of stocks in a specified group that have a P&F "Buy Signal" on their charts.  While the large-scale Bullish Percent indexes - the NYSE's ($BPNYA) and the Nasdaq's ($BPCOMPQ) - are still in a downward column of O's, the S&P 500's ($BPSPX) reversed today(!) and is heading higher.  Will the others follow the S&P 500's lead?

Large Caps, Mid Caps or Small Caps?

 
Click here for a live version of this chart.

Long term answer: Mid caps.  Next question?