Years ago, my wife and I were really into a TV show called The Biggest Loser. If you’ve never heard of it, the general premise was essentially a couple of personal trainers and fitness experts were featured on the show every week helping a group of people struggling with weight loss and body image. Over the course of the season you would see these individuals go through a dramatic multi-month transformation 30 minutes at a time, as they developed better habits and unwound destructive ones. Overall, it was pretty enjoyable to see people improve their lives, many of whom had come from very dark places not just physically, but emotionally and spiritually.

The last five months of market history are a blur for me. Back in mid-March, the S&P 500 was in free fall with no end in sight. Here we are in mid-August, and the S&P is retesting all-time highs. Trend-following is about defining the trend, recognizing shifts in the trend and anticipating potential trend changes. So now that the S&P 500 is in a raging uptrend with no apparent end in sight, what would I need to see to turn bearish?

Today’s One Chart is the Financial Sector SPDR ETF, in a follow-up to our post in early June on the confluence of resistance levels. As we’ll discuss in this article, the XLF is displaying a similar combination of factors, all suggesting weaker prices and likely underperformance as the sector continues to struggle.

The biotechnology industry has apparently completed a transition from accumulation to consolidation to distribution. A confluence of support levels around $125 for the iShares Nasdaq Biotechnology ETF (IBB) give a clear potential downside target as further weakness appears likely.

Today’s One Chart is The Walt Disney Company (DIS). It’s an interesting chart because of the earnings beat this week and what that means for long-term potential appreciation, but also because it illustrates the concept of follow-through, or confirmation.

Last week on The Final Bar, one of our Mailbag questions related to Amazon.com (AMZN) and how far it has reached above its 200-day moving average. This phenomenon speaks to the long-term strength of AMZN’s price movements, the short-term overreaching of the price since the March market low and the high likelihood of further upside for the stock.

Today’s chart is the Nasdaq 100 index, and the focus is on bearish divergences. A bearish divergence is when you have higher highs in price and lower peaks in momentum, in this case in the form of RSI.

The essence of market breadth is to see how the stocks that comprise a benchmark are performing relative to the benchmark itself.

I've often said that by looking at individual stocks, you can get a deeper level of understanding of what's moving the overall equity markets.

I love to use the Consumer Discretionary vs Consumer Staples ratio as a way of gauging offense vs defense in the equity markets. The top panel shows the ratio of the XLY (Consumer Discretionary Sector SPDR) versus the XLP (Consumer Staples).