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).

Market breadth at a high level essentially means market participation, so when the market is on the move, it tells you how many stocks are participating in the trend.

I love to ask interviewees if they had one chart to get a good read on the overall market environment, what would it be and why? My One Chart for today is IWM, the small cap ETF.

It’s often been said that we stand on the shoulders of giants. Unfortunately, this week we lost one of the early practitioners and founders of the Market Technicians Association, Tony Tabell.