Charting Stocks

The Dow Jones Industrial Average breached the 10,000 level at the open and then rallied back 180 points from the low to close at 10,193. In a previous post I mentioned that the major averages were close to major support levels while approaching oversold levels. Those levels were tested today before the market moved higher.
(Chart [...]

The selloff of in the price of crude oil may soon reverse as it’s become oversold (RSI below 30). So far, price has remained above the February lows which further supports our conclusion. The oversold condition shouldn’t come as a surprise since crude oil is priced in US dollar throughout the world and the dollar [...]

European liquidation has put upward pressure on the US dollar causing  the price level to reach an extreme. While securities/currencies can become overbought while staying overbought, the recent overshoot suggests a pullback is on the horizon for the US Dollar in the coming weeks. Recent RSI readings of 70+ (overbought) have preceded a decline.
Contrarily, in [...]

An unusual dynamic has taken shape over the last few months – Both the US Dollar and Gold have been rising together. Normally, such a movement would seem counter intuitive as Gold is a commodity and commodities tend to move in the opposite direction of the US dollar. There is a slight caveat, however, to [...]

On Wednesday, I wrote about the troubling signal given by the Volatility Index (VIX) as it surged in a manner which resembled the 2008 crash.  Today we can add another market indicator to the “trouble” list – The US Dollar.
I’ve mentioned the inverse relationship between the US Dollar and stocks several times. This relationship began [...]

Chart of the Trade Weighted US dollar from 1973-2009.

When we wrote “Inflating a Bull Market,” we mentioned the inverse relationship between the US dollar and stock prices. In March, the US dollar peaked from overbought levels and began to decline. At the same time stocks bottomed from oversold levels and began to move up. The reason is simple – Stocks are priced [...]

We’ve written about the relationship between US equities and the US dollar. Stocks bottomed in March and began to move up as the US Dollar topped during the same time and began to move down. Todays market selloff came as an oversold dollar (short term) found buyers.
If the dollar continues this advance, US equities should [...]

Last week we mentioned that the spring rally had reached completion.The major averages were coming up against major resistance at a time when an oversold rally was losing momentum. Admittedly, our call was a couple of days early but today looks like a key reversal day. If the selling continues into tomorrows close, last week [...]

2009 will be a year of complete destruction for the US economy. 5 Million will lose their jobs. The Dow Jones Industrial average will break below 6,000. Municipalities will fail. Insurers will fail. The unemployed and foreclosed American population will take to the streets and begin rioting. The Greatest Depression is upon us.
Sound far fetched? [...]