Investors Party Like Its 1999; Market Top or Breakout?
by kimblechartingsolutions - May 5th, 2019 7:05 pm
Courtesy of Chris Kimble.
After enduring a deep stock market correction in late 2018, investors quickly bought up stocks. And the bull market resumed.
It’s been a decade since the financial crisis lows, and two decades since the 1999 stock market blow-off bubble top. In today’s chart, we put our party hats on as we look at an interesting stock market ratio; The S&P 500 / NYSE Ratio
As you can see in the chart below, this ratio is testing the highs that it made in 1999.
This comes at a time when the market is still trying to confirm a broader breakout to new highs. While the Nasdaq and S&P 500 are at all-time highs, the Dow Industrials and Russell 2000 are not.
Will this ratio top out here? Or will it break out to new highs? The outcome may determine how long the party lasts.
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Crude Oil Rally Stalling? Stock Market Bulls Hope Not
by kimblechartingsolutions - May 2nd, 2019 7:16 am
Courtesy of Chris Kimble.
The 4-month rally has been broad-based, with other risk-on assets like crude oil rallying in stride.
This isn’t a surprise, as crude oil will often perform in line when the economy is on track.
Currently, the correlation between stocks and crude oil remains up.
But if crude doesn’t get its act together, it may become a headwind for stocks. See the chart below for more color.
Last week, Crude Oil created a large bearish reversal pattern while testing its 61.8% Fibonacci level at (1).
In my humble opinion, stocks would receive a short-term negative message if crude oil turns weak here. Stay tuned!
This article was first written for See It Markets.com. To see original post CLICK HERE.
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Doc Copper Suggesting Slower Economic Growth Ahead?
by kimblechartingsolutions - May 1st, 2019 9:30 am
Courtesy of Chris Kimble.
Is Doc Copper of late suggesting the economy is about to slow down? Possible!
Copper futures have remained in a trading range since last summer, with resistance around $2.95 and support near $2.60.
Over the past couple of months, Doc Copper has traded sideways near the top of this trading range at (1).
The past couple of weeks Doc Copper has declined in price, taking it below short-term rising support as lofty momentum is attempting to turn down.
A break of support this week opens the possibility that Copper could head back towards the bottom of the range. If it does fall to the bottom of the range (-10% decline) odds increase ole Doc Copper is suggesting a slight slowdown in the economy.
Keep a close eye on Copper futures to see if they starting heading towards the bottom of the range at (2).
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2000 Topping Pattern In Stocks Happening Again?
by kimblechartingsolutions - April 30th, 2019 7:51 am
Courtesy of Chris Kimble.
Is a very broad stock index of late creating a pattern similar to the 2000 highs? Possible!
This chart looks at the Wilshire 5000 on a monthly basis over the past 35-years. The index has spent the majority of the past 30-years inside of a bullish rising channel.
In early 2000 the index created a bearish reversal pattern at (1). Months later it tested the old highs at (2), where a double top ended up taking place and stocks fell hard.
Turning the page to this past year, the index tested the top of the rising channel again, where it looks to have created a monthly bearish reversal pattern at (3). The rally off the December lows as the index testing the highs of last year at (4).
If this broad index breaks above last years highs, the chance of a double top will be eliminated and sharing this chart was a waste of your time.
The bullish case for stocks would receive a negative message if a month from now stocks are much lower, which would increase the odds that a double top formed.
Keep a close eye on this broad index over the next month as we enter in the seasonal sell in May time frame.
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Coffee About To Heat Up And Breakout?
by kimblechartingsolutions - April 29th, 2019 8:20 am
Courtesy of Chris Kimble.
Coffee has been anything but hot over the past 3-years, as it has declined nearly 50%. Is cold Coffee about to heat up? Possible in the short-term!
This chart looks at Coffee futures over the past 16-years. The 50% decline is coffee has it testing its 2005 lows and the bottom of a 3-year falling channel at (1).
While testing this support zone two weeks ago at (1), it created a bullish reversal pattern (bullish wick).
No doubt the trend in Coffee is down and this one-week bullish reversal pattern does NOT change the trend!
If Coffee can break above resistance at (2), look for it to heat up in the short-term.
Currently, hedgers have a very big bet in play that Coffee will rally. Keep a close eye on Coffee and Coffee ETF JO over the next couple of weeks, as an upside bullish breakout test is in play.
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Gold Miners Create Bullish Reversal While Testing Support
by kimblechartingsolutions - April 28th, 2019 9:36 am
Courtesy of Chris Kimble.
Two months ago Gold Miners ETF GDX created its first bearish reversal pattern (bearish wick) while testing falling resistance. A couple of weeks later it created another bearish reversal pattern (Bearish wick) and then selling pressure took over and GDX fell 10% quickly.
The decline of late now has GDX testing rising support, where GDX created a bullish reversal pattern (Bullish wick) to close out the past week at (2).
Several bullish reversal patterns have taken place over the past 9-months along this rising support line.
What is the desired price action of miners bulls the next week or two? A rally off rising support at (2), taking it back to restest old highs at (1).
If upside action does not take place and 9-month support is broken at (2), look for GDX to start moving towards trading range support at the $17.34 level.
What GDX does the next week should send a very important message from the mining sector.
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Crude Oil Could Be Peaking Here, Impacting Stocks, Says Joe Friday
by kimblechartingsolutions - April 26th, 2019 10:26 am
Courtesy of Chris Kimble.
Crude Oil and the S&P 500 peaked last fall together and bottomed at the same time in December. Could they both be peaking together again this week? Joe Friday suggests keeping a close eye on the Crude Oil pattern this week.
Crude and the S&P both created topping patterns at each (1), then both fell over 15%.
Crude and the S&P both created bottoming patterns at each (2), then both rallied over 15%
Crude and the S&P are both testing resistance levels at each (3).
Joe Friday Just The Facts Ma’am– Crude Oil could be creating a bearish reversal pattern (bearish wick) while testing resistance this week. If Crude would turn lower from current levels, it could influence stocks to do the same.
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Transportation Index Creating A Topping Pattern?
by kimblechartingsolutions - April 25th, 2019 7:05 am
Courtesy of Chris Kimble.
This quote comes to mind when I look at the chart above; bottoms are often events and Tops are a process. Could the Dow Jones Transportation be creating a “Topping Pattern” over the past 15-months? Possible!
In this monthly chart of the Transports index, we applied Fibonacci extension levels to the 2003 lows and the 2008 highs at each (1).
The rally off the 2009 lows saw the Transports index test the 261% extension level as resistance in January of last year, where a strong upward trend stopped on a dime. It has now spent the past 15-months attempting to break above this Fibonacci extension level, which comes into play as resistance.
While testing this resistance level, the Transports could be creating a “Head & Shoulders topping pattern!”
The bullish case for stocks would receive quality good news if Transport can take out this resistance zone! Keep a close eye on the Transport index the next few weeks as they are dealing with what looks to be a very important price level!
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Technology Sector Is Sending Bullish Message As Stocks Hit All-Time Highs
by kimblechartingsolutions - April 24th, 2019 10:16 am
Courtesy of Chris Kimble.
The stock market rally off the December 2018 lows has been very impressive.
In many ways, it’s also been persistent. Every time market bears think they have an opening to drive stocks lower, the major stock market indices surge higher.
Though the rally has been broad-based, it’s also had clear leadership: the technology sector and tech stocks.
In the chart below, we look at the Equal Weight Nasdaq 100 (QQEW), the Nasdaq 100 ETF (QQQ), and the Semiconductors ETF (SMH).
Note that all three major technology indexes and sectors are at all-time highs (1). Each of the charts shows a gap and go breakout as well. This is bullish for the broader market.
Tech is clearly sending a positive message to the broad market with each of these tickers hitting all-time highs at the same time.
This article was first written for See It Markets.com. To see original post CLICK HERE
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Tech Indicator Sending Bullish Message To S&P 500
by kimblechartingsolutions - April 23rd, 2019 10:46 am
Courtesy of Chris Kimble.
How long as Tech been stronger than the S&P 500? 16-years! QQQ has outperformed than the S&P since the NDX 100 hit lows back in 2003.
This chart looks at the QQQ/SPY ratio over the past 3-years. The ratio peaked 10-months ago and then declined into November of 2018. Since the lows of last fall, the ratio has been moving higher.
Last week the ratio broke above last years highs, which puts the ratio at all-time high levels.
This breakout reflects continued strength by Tech over the broad market, which historically sends a short-term positive message to the S&P 500. If this ratio continues to push higher, it increases the odds that the S&P will move above last years highs.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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