StockCharts Blogs - Don't Ignore This Chart!

Silver and Gold Perfchart

It has been a big year for gold, but an even bigger year for silver. As the Perfchart shows, $SILVER underperforms $GOLD on the way down and outperforms on the way up. Silver was down more than gold in April and July, but up more than gold in June and August. Notice that silver was already up over 5% when gold turned positive in early September.

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FTSE plunges on Dubai concerns

The London FTSE ($FTSE) dropped over 3% on the prospects of a sovereign default from Dubai. Even with this sharp decline, the medium-term trend is up as the index recorded a new reaction high just two weeks ago. Major support is set in the 4950-5000 area. A break below this level would definitively reverse the uptrend.

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Dollar weakness not helping oil

Despite strength in stocks and weakness in the Dollar, the US Oil Fund ETF (USO) is down for the month of November. It is not much, but it is still surprising and merits attention. Strength in stocks points to strength in the economy, which should increase demand for oil. Commodities also benefit from Dollar weakness. Something is not quite right here.


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Energy lagging in November

The sector PerfChart from 30-Oct to 23-Nov shows energy as the weakest of the nine sectors. The shaded S&P 500 tab means performance is measured relative to the S&P 500. The percentage changes are not absolute, but rather over or under performance relative to the S&P 500. Consumer staples, utilities and finance are also lagging the S&P 500 in November. Click here for more on PerfCharts.

Wells Fargo shows relative weakness

Even though the S&P 500 is up sharply over the last four weeks, Wells Fargo (WFC) is just flat and shows relative weakness. After a surge the first few days of November, WFC traded flat with a small triangle. Watch this neutral pattern for clues on the future. An upside breakout would be bullish, but a downside break would be bearish.


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Healthcare showing relative strength

The Healthcare SPDR (XLV) broke above its October high two weeks ago and continued above 30 this week. Even though stocks were weak across the board on Thursday, healthcare managed to show relative strength with a smaller loss. Eight of the nine sectors were down in early trading Friday, but healthcare was sporting a small gain and again showing relative strength.


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An island reversal in MDY

With a gap up on Monday and a gap down on Thursday morning, the S&P 400 MidCap ETF (MDY) has an island reversal working on the 30-minute chart. There were no trades around 127.6, which creates a floating island around 128. Even though this gap is negative, MDY landed right at support from last week’s low. Further weakness would reverse the short-term uptrend.

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Regions Financial Bounces off 200-day SMA

Regions Financial (RF) is showing signs of life with a high-volume bounce off the 200-day simple moving average and a key retracement. Notice that the Sep-Nov decline retraced a Fibonacci 62% of the Jul-Sep advance. The stock firmed around 4.75 in early November and surged over the last three days. 

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DIA enters retracement zone

With the advance above 100, the Dow Diamonds (DIA) entered the 50-62% retracement zone. Such retracements can be measured using the Fibonacci Retracements Tool on Sharpcharts. These zones can mark resistance areas and price action merits a close watch.



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Scanning the Aroon oscillator in the market carpet

Friday’s mailbag answered questions on the Aroon oscillator, which is a trend identification indicator. Basically, a strong uptrend exists when the oscillator is above +50 and a strong downtrend exists when the oscillator is below -50. Even with the market gains of the last few weeks, I was surprised to see so many negative readings in the Aroon oscillator. The sector averages are negative for finance, energy, consumer discretionary and materials sectors. 

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