The big question this week: Will the SPY and the Major Indexes close their gaps, or do they stop here?   On January 4th., the markets gapped down at the open. The gaps have yet to be closed. The SPY closed at 138.90 on Friday, just 3.72% away from closing its 144.07 gap. But, at the same time, the SPY tested its October/May resistance line on May 2nd and May 6th. The SPY was unable to penetrate the resistance both times. The SPY has moved lower since its May 6th […]

The government reported a decline in crude inventories and this news sent the United States Oil Fund ETF (USO) to new highs. This report may have sparked today’s move, but a new high is not that surprising given the strong uptrend in oil. After breaking resistance in February, USO consolidated and broken resistance turned into support. Chart 1 shows the ETF successfully testing support around 79–80 in late March and early April. With a gap up on Monday and a strong gain today, USO moved to a new high to […]

INDUSTRIAL METAL BREAKOUTS… Three of the top performing material stocks are tied to industrial metals. The strongest is US Steel which just recently broke out to a new record high.  Right behind it is Freeport McMoran Copper & Gold (which is tied more to copper than gold). FCX is breaking through a “neckline” drawn over its December/February highs. Its relative strength ratio is near a new high as well.   Alcoa moving up to challenge overhead resistance near 40. A decisive close over that chart barrier would be a bullish breakout […]

WOW…What a week!!! Let’s see if I can recap this past week by posting a few headlines. Monday…up 50 points Tuesday…up 416 points. HOMEBUILDERS, RETAILERS, AND TRANSPORTS CONTINUE TO SHOW NEW MARKET LEADERSHIP — BANK BOUNCE ALSO HINTS THAT FINANCIAL SELLOFF IS OVERDONE — A LOT OF SHORT-TERM POSITIVE DIVERGENCES ARE SHOWING UP, SUGGESTING A POSSIBLE MARKET BOTTOM Wednesday…down 280 points ENERGY AND MATERIALS SECTORS LEAD THE WAY LOWER – COMMODITIES TUMBLE AS DOLLAR REBOUNDS – THE DOW AND SHORT-TERM INTEREST RATES – NEW LOWS STILL OUTPACING NEW HIGHS Thursday…up […]