Bernie Schaeffer's Market Commentaries

Schaeffer's Short Takes: Are Breakouts an Indication of a Reversal?

Thu, 15 May 2008 19:45:00 GMT

This 30-minute chart of AK Steel (AKS: sentiment, chart, options) serves as a good illustration of how breakouts - which at one time fed on themselves due to attracting new buyers and the capitulation of short sellers - have become more of an indication of reversal or mean reversion.Note the first "breakout" above %2470 about 6 trading days ago, which was greeted with an immediate smackdown...(Read More)

Schaeffer's Short Takes: How the Economy is Different from the Stock Market

Mon, 12 May 2008 13:44:00 GMT

I think the action in the AMEX Retail HOLDRS Trust (RTH) is a perfect illustration of how "the economy" can be much different from "the stock market."The RTH has been flat for 5 years (most of which would be considered a period of strong consumer spending and a "good economy")...(Read More)

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Fri, 16 May 2008 22:05:00 GMT

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Schaeffer's Short Takes: Technical Turmoil Hinders the S&P 500 Index

Thu, 08 May 2008 18:18:00 GMT

Strong Wal-Mart Stores (WMT) sales figures this morning are a bit of a counterweight to the weakening economy case...(Read More)

May Option Advisor Commentary

Wed, 07 May 2008 12:16:00 GMT

The following is a reprint of the market commentary from the May edition of the Option Advisor, published on April 17...(Read More)

Overheard on the Trading Floor: Debit Spreads Ahead of Earnings?

Fri, 04 Apr 2008 17:13:00 GMT

Below is an email exchange that occurred earlier today between trader John Stewart, Todd Salamone, and myself...(Read More)

Schaeffer's Short Takes: Tuesday's Corrective Rallies

Wed, 19 Mar 2008 14:17:00 GMT

I would characterize the action in all these instruments yesterday as "corrective rallies" that in themselves did nothing to change the underlying trends - down for the S&P Depositary Receipts (SPY)/Select Sector SPDR Financial Fund (XLF) and up for CBOE Volatility Index (VIX)/ StreetTracks Gold Trust (GLD).SPY - Bounced off declining lower 80-day Bollinger Band (BB), which has been supportive since late January...(Read More)

Schaeffer's Short Takes: The S&P 500 Index - Is History Repeating?

Wed, 12 Mar 2008 13:37:00 GMT

The decline by the S&P (SPX) off its peak in 2000 was marked by a break of and subsequent failure at the 80-week moving average (green) in late 2000 and then a break of and subsequent failure at the 160-week (red) in early 2001...(Read More)

March Option Advisor Commentary

Wed, 05 Mar 2008 13:00:00 GMT

The following is a reprint of the market commentary from the March edition of the Option Advisor, published on February 22...(Read More)

Schaeffer's Short Takes: 4 Videos on the Fed, Gold, Hedge Funds, and Media Sentiment

Fri, 29 Feb 2008 16:32:00 GMT

While at the Orlando World Money Show earlier this month, I sat down with Howard Gold, the Executive Editor of MoneyShow.com...(Read More)

Schaeffer's Short Takes: The S&P 500 Index - Then and Now

Mon, 25 Feb 2008 13:48:00 GMT

During the S&P 500 Index's bull-market run of the 1980s, the 80-week (green), 160-week (red) and 195-week (black ) moving averages seemed to have some major significance.Note how the October 1987 plunge carried the index from the upper 80-week Bollinger Band to the 195-week moving average...(Read More)

Schaeffer's Short Takes: Examining Key Support for the S&P 500 Index

Tue, 19 Feb 2008 13:45:00 GMT

June 2006 pullback broke lower 80-day bollinger band; July 2006 retest held at lower 80-day bollinger band and was the bottomMarch 2007 pullback held at lower 80-day bollinger band on a closing basis and a major rally followedMid-August 2007 pullback broke lower 80-day bollinger band; pullback into August 29 and August 30 held at lower 80-day bollinger band and sharp rally followedNovember 2007 pullback bottomed at lower 80-day bollinger bandJanuary 2008 pullback broke lower 80-day bollinger band; February pullbacks have held at lower 80-day bollinger band; one difference is that lower 80-day bollinger band is now declining fairly steeply due to declining 80-day and increasing volatility(Also, for what it's worth, note the termination of rallies over past two years at upper 80-day bollinger band - most recently a precise touch at the October 11, 2007 highs)...(Read More)

Schaeffer's Short Takes: A Critical Trendline to Watch Today

Fri, 08 Feb 2008 13:33:00 GMT

The S&P 500 Index (SPX) closed a point above its 160-week moving average (red line) on yesterday's rally - the key will be today's (weekly) close.I'm also noticing the potential importance of 1,300 as a "last line of defense" - round number, 195-week (green line), and lower 80-week Bollinger Band (black lines)....(Read More)

Schaeffer's Short Takes: Examining Key Support for the S&P 500

Thu, 07 Feb 2008 14:18:00 GMT

On Wednesday evening, Todd Salamone pointed out to me that on CNBC "Fast Money" Louise Yamada, a technician for whom I have the greatest respect, was talking about the S&P 500 Index's (SPX) break below its 20-unit monthly trendline (which would be equivalent to the 80-week we have discussed), and how this could be a structural sell signal for the market.Yamada also noted a few other interesting items:The breakout of consumer staples' relative strength versus the SPX makes the sector a defensive play if you feel you must be in this market (not because prices are necessarily going up, but going down less)Multi-year breakdown of financials versus SPX, with the implications being sell all strengthCisco Systems (CSCO) - If the stock falls below %2420, sell (cut losses)I can't say I disagree with the technician's logic.On the 20-month (80-week) break, sometimes it's tough when you're a sentiment-based contrarian to fully accept the fact that weak price action severely compromises the bullish implications of bearish sentiment, and we have plenty of the latter in terms of bearish cover stories, high put/call ratios, and the like.Per my Opt...(Read More)

Schaeffer's Short Takes: Google Versus the S&P 500 Index

Mon, 04 Feb 2008 17:46:00 GMT

Google (GOOG: sentiment, chart, options) tapped the %24498.94 level this morning...(Read More)

February Option Advisor Commentary

Tue, 29 Jan 2008 13:35:00 GMT

The following is a reprint of the market commentary from the February edition of the Option Advisor, published on January 24...(Read More)

Schaeffer's Short Takes: A Look at Broad-Market Technical Support and Resistance

Fri, 25 Jan 2008 13:49:00 GMT

The S&P 500 Index (SPX) fell below its 160-week moving average last week, two weeks after the 80-week was broken; the 195-week held as support so far this week and 160-week will be retaken if we close today above 1,333.10+ (the moving average is rising so we can't be sure where it will land at day's end).Note that after 160-week was taken out in the first quarter of 2001, it was not retaken; though it came close in a failed rally in May 2001 (this is clearer on the second chart below)...(Read More)

Schaeffer's Short Takes: Gold Futures Rally to New All-Time High

Fri, 25 Jan 2008 13:26:00 GMT

Continuing my thoughts from yesterday.... Gold futures hit a new all-time high in overnight trading...(Read More)

Schaeffer's Short Takes: Light Volume on Today's Gold Rally

Thu, 24 Jan 2008 20:45:00 GMT

The StreetTRACKS Gold Trust (GLD: sentiment, chart, options) is seeing light volume on today's rally...(Read More)

Schaeffer's Short Takes: Apple: 2006 and Now

Wed, 23 Jan 2008 14:43:00 GMT

Apple (AAPL: sentiment, chart, options) shares peaked in January at all-time highs in both years...(Read More)

Schaeffer's Short Takes: What SPY Volume Isn't Showing

Wed, 23 Jan 2008 13:50:00 GMT

Yesterday's volume on the S&P Depositary Receipts (SPY: sentiment, chart, options) exchange-traded fund hit 435 million shares, falling well short of the 546 million record on August 16...(Read More)

Schaeffer's Short Takes: Economic Charts and a Brief History Lesson

Tue, 22 Jan 2008 17:54:00 GMT

Here are some economic charts recently routed around by my colleague, Chris Prybal, in our Quantitative Analysis department...(Read More)

Schaeffer's Short Takes: How Recession Denial is Hurting the Market

Tue, 22 Jan 2008 14:56:00 GMT

"Is a recession a serious risk -- or is it mostly in Wall Street's mind? ... some analysts say the action in stocks and bonds is overstating the chances of grave trouble in the economy...(Read More)

Schaeffer on Charts: A Trendline to Watch on the S&P 500 Index

Thu, 10 Jan 2008 15:58:00 GMT

With regard to the S&P 500 Index (SPX), its 80-week moving average has been very significant going back to the mid-1990s.The index progressed above this trendline from 1995 through most of 2000...(Read More)

Schaeffer's Media Outtakes: The Contrarian Gift of Low Expectations

Wed, 02 Jan 2008 14:34:00 GMT

In our Schaeffer's Media Outtakes series, Bernie Schaeffer dissects the news, using contrarian analysis to provide a unique take on the market."This year ended with a debate over whether equities, down from their peaks set earlier this year, were entering a bear market, or merely the final, most volatile stage of a "mature bull" market...(Read More)

Monday Morning Outlook: Happy New Year, Happy New Market?

Mon, 31 Dec 2007 11:59:00 GMT

The turning of the calendar into a new year is a time for a bit of nostalgic reflection and ambitious planning for the future...(Read More)