The S&P 500 (SPX: 1,406.29) fell 0.21% on Monday. NYSE trading volume rose above the severely reduced holiday levels of the previous 2 trading days to a level that was still 20% below its 200-day SMA.
The stock market looked overbought coming into Monday after 5 consecutive up days that retraced about half of the losses over the past 2-months. Half-way retracements against the larger trend are very common.
The technical condition of the stock market has not supported the excessive optimism that the bullish majority of stock investors and traders clearly exhibited over the past several months. Long-term momentum has been showing bearish divergence and has weakened considerably since the SPX peak on 9/14/12. Choosing safety over risk still appears to be the most reasonable approach for conservative traders and investors.
Our clients’ separately managed accounts preserved capital over the past 9 weeks while the S&P 500 fell 8.9%, based on intraday highs and lows from 9/14/12 to 11/16/12. In addition, our clients’ accounts made gains every quarter for the past 6 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).
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Stock Market Indicators
The Dow Theory signaled a Primary Tide Bear Market on 5/17/12 when both Industrials and Transports closed below their closing price lows of the previous 4 months, including the critical lows of March and April, 2012. The Dow-Jones Industrial Average rose above its closing price highs of the previous 4-years on 10/5/12, but the Dow-Jones Transportation Average failed to confirm, remaining substantially below its 2012 high, thereby demonstrating non confirmation and bearish divergence. Both Averages broke down below their closing price lows of the previous 4 months again on 11/15/2012 and 11/16/2012
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) turned systematically bearish on 11/7/11 when the 50-day SMA fell below the 200-day SMA.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) turned systematically neutral on 9/13/12, when it rose above its 50-day SMA. BKF/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/13/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) turned systematically neutral on 9/13/12, when it rose above its 50-day SMA. The 50-day SMA has remained below the 200-day SMA every day since 2/3/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) turned systematically neutral again on 10/10/12, when it rose above its 50-day SMA. Longer term, the 50-day SMA has remained below the 200-day SMA every day since 1/14/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) turned systematically neutral on 10/11/12 when it fell below its 50-day SMA. OEF/SPY fell below its 200-day SMA on 11/7/11. The 50-day SMA has been above the 200-day SMA consistently every day since 8/24/11. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative stability and safety of large size. On the other side of the coin, Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors seek greater potential returns in more volatile, smaller stocks.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below its 50-day SMA on 10/12/12, thereby turning systematically bearish again. IWM/SPY fell below its 200-day SMA on 9/24/12, and its 50-day SMA has remained below its 200-day SMA consistently every day since 4/20/12.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose above its 50-day SMA on 10/23/12, thereby turning systematically neutral again. Longer term, the MDY/SPY 50-day SMA has been below the 200-day SMA since 6/6/12.
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The S&P 500 Composite Potential Resistance
1576.09, high of 10/11/2007
1552.76, high of 10/31/2007
1523.57, high of 12/11/2007
1498.85, high of 12/26/2007
1474.51, high of 9/14/2012
1464.02, high of 10/18/2012
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1425.71, 50-day SMA
1434.27, high of 11/2/2012
1430.53, low of 9/26/2012
1425.53, low of 10/12/2012
1425.48, Fibonacci 23.6% of June-Sept 2012 range
1422.38, high of 4/2/2012
1422.06, low of 10/22/2012
1421.12, high of 10/25/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
The S&P 500 Composite Potential Support
1403.28, low of 10/26/12
1397.68, low of 11/26/2012
1396.56, low of 9/4/2012
1395.14, Fibonacci 38.2% of June-Sept 2012 range
1391.04, low of 8/6/2012
1388.71, low of 5/3/2012
1383.52, 200-day SMA
1381.50, Fibonacci 78.6% of 2007-2009 range
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1370.62, Fibonacci 50.0% of June-Sept 2012 range
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
1346.11, Fibonacci 61.8% of June-Sept 2012 range
1343.35, low of 11/16/2012
1340.03, low of 3/6/2012
1335.52, high of 6/11/2012
1334.93, high of 5/31/2012
1329.24, low of 7/24/2012
1329.05, high of 6/7/2012
1328.49, high of 5/22/2012
1325.41, low of 7/12/2012
1311.20, Fibonacci 78.6% of June-Sept 2012 range
1306.62, low of 6/12/2012
1291.98, low of 5/18/2012
1266.74, low of 6/4/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1257.58, Fibonacci 61.8% of 2011 range
1244.80, low of 12/7/2011
1239.73, low of 12/1/2011
1238.81, Fibonacci 78.6% of 1,576.09 high
1234.81, low of 11/3/2011
1231.04, high of 12/16/2011
1228.74, Fibonacci 61.8% of 2007-2009 range
1226.64, low of 11/9/2011
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1202.37, low of 12/19/2011
1158.66, low of 11/25/2011
1121.44, Fibonacci 50% of 2007-2009 range
1074.77, low of 10/4/2011
1014.14, Fibonacci 38.2% of 2007-2009 range
1010.91, low of 7/1/2010
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
881.38, Fibonacci 23.6% of 2007-2009 range
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
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Spotlight on event stocks: Here is a stock screen I designed to pick out potential event stocks, both Bullish and Bearish. Sometimes, stocks with large changes in price and volume are later revealed to be deal stocks or are the subject of some other extraordinary events, positive or negative.
Bullish Stocks: Rising Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
6.02% , CECO , CAREER EDUCATION CORP
2.06% , CMA , COMERICA
4.88% , EBAY , EBAY
3.53% , MRVL , MARVELL TECHNOLOGY
1.20% , IDU , Utilities DJ, IDU
6.67% , BBY , BEST BUY
1.20% , HBAN , HUNTINGTON
5.74% , MBI , MBIA
1.82% , RHI , ROBERT HALF
2.05% , TIF , TIFFANY
1.87% , BRCM , BROADCOM STK A
2.63% , EXC , EXELON CORP
2.56% , KSU , Kansas City Southern, KSU
1.37% , VPU , Utilities VIPERs, VPU
1.26% , XLU , Utilities SPDR, XLU
2.62% , RSH , RADIOSHACK
1.42% , LTD , LIMITED BRANDS
1.09% , PBW , WilderHill Clean Energy PS, PBW
1.27% , URBN , Urban Outfitters Inc.
1.00% , YHOO , YAHOO
2.16% , EIX , EDISON INTL
1.59% , LMT , LOCKHEED MARTIN
1.66% , ROST , Ross Stores Inc
0.66% , IJT , Growth BARRA Small Cap 600, IJT
1.44% , ED , CON ED
4.14% , DELL , DELL
1.42% , DUK , DUKE ENERGY
0.94% , NKE , NIKE STK B
1.25% , BSX , BOSTON SCIENT
1.56% , AMZN , Amazoncom Inc
1.61% , PEG , PUBL SVC ENTER
0.27% , JKE , Growth LargeCap iS M, JKE
1.05% , AEE , AMEREN
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-5.35% , AN , AUTONATION
-4.25% , HMA , HEALTH MGMT STK A
-4.08% , JWN , NORDSTROM
-2.34% , RDC , ROWAN COMPANIES
-1.93% , FHN , First Horizon National
-4.10% , AMD , ADV MICRO DEV
-2.38% , WPO , Washington Post
-1.58% , ASH , ASHLAND
-2.97% , LXK , LEXMARK INTL STK A
-2.91% , MRO , MARATHON OIL
-2.64% , TGT , TARGET
-2.67% , BIG , BIG LOTS
-1.90% , MKC , MCCORMICK
-1.28% , DGX , QUEST DIAG
-0.29% , EZU , EMU Europe Index, EZU
-2.28% , FMCN , Focus Media, FMCN
-0.90% , PXE , Energy Exploration & Prod, PXE
-1.45% , AXP , AMERICAN EXPRESS
-1.73% , HP , Helmerich & Payne HP
-1.14% , TROW , T ROWE PRICE GP
-3.06% , WFM.O , Whole Foods Market Inc
-3.24% , SWY , SAFEWAY
-1.23% , WLP , WELLPOINT HEALTH
-0.64% , BF.B , BROWN FORMAN STK B
-0.91% , PLL , PALL
-0.81% , IXC , Energy Global, IXC
-3.00% , COH , COACH
-0.58% , MCK , MCKESSON CORP
-1.23% , INTU , INTUIT
-1.52% , HNZ , HJ HEINZ
-0.79% , VFC , VF
-0.43% , IXJ , Healthcare Global, IXJ
-1.50% , KO , COCA COLA
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.37% Utilities VIPERs, VPU
1.26% Utilities SPDR, XLU
1.09% WilderHill Clean Energy PS, PBW
1.03% Turkey MSCI iS, TUR
0.89% Semiconductor SPDR, XSD
0.76% Technology DJ US, IYW
0.75% Water Resources, PHO
0.70% Taiwan Index, EWT
0.68% Transportation Av DJ, IYT
0.67% Info Tech VIPERs, VGT
0.66% SmallCap Growth S&P 600 iS, IJT
0.62% Microcap Russell, IWC
0.58% Indonesia MV, IDX
0.57% Sweden Index, EWD
0.52% Networking, IGN
0.48% Austria Index, EWO
0.48% Bond, 20+ Years Treasury, TLT
0.46% Singapore Index, EWS
0.45% China LargeCap Growth G D H USX PS, PGJ
0.43% Technology SPDR, XLK
0.43% QQQ Nasdaq 100 Trust, QQQ
0.42% Semiconductor iS IGW, SOXX
0.40% Thailand MSCI iS, THD
0.38% SmallCap Value S&P 600 iS, IJS
0.37% SmallCap Blend S&P 600 iS, IJR
0.32% Value SmallCap VIPERS, VBR
0.32% SmallCap Blend Russell 2000 iS, IWM
0.32% Dividend High Yield Equity PS, PEY
0.32% SmallCap Growth Russell 2000 iS, IWO
0.29% Capital Markets KWB ST, KCE
0.28% Bond, TIPS U.S. Treasury iS, TIP
0.28% SmallCap Value Russell 2000 iS, IWN
0.24% REIT Wilshire, RWR
0.20% REIT VIPERs, VNQ
0.19% Bond, Emerg Mkt JPM iS, EMB
0.18% Dividend U.S. DJ iS, DVY
0.17% Bond, 10 Year Treasury, IEF
0.16% Bond, Long-Term Corp iBoxx iS, LQD
0.16% Netherlands Index, EWN
0.15% Small Cap VIPERs, VB
0.14% Emerging VIPERs, VWO
0.14% Real Estate US DJ iS, IYR
0.13% Bond Ex-US Treas, BWX
0.12% Silver Trust iS, SLV
0.10% Spain Index, EWP
0.09% Bear, Short S&P 500, SH
0.08% Materials SPDR, XLB
0.07% Industrial SPDR, XLI
0.07% Dividend International, PID
0.07% Realty Cohen & Steers, ICF
0.05% Bond, Muni S&P ATM-Free iS, MUB
0.05% SmallCap Blend EAFE MSCI iS, SCZ
0.05% Growth SmallCap VIPERs, VBK
0.04% Bond, Intermediate US Aggregate iS, AGG
0.02% Bond, High Yield Corp iBoxx iS, HYG
0.01% Emerging Markets MSCI iS, EEM
0.01% Bond Treasury Short-Term iS, SHV
0.00% Japan Index, EWJ
0.00% Germany Index, EWG
0.00% Belgium Index, EWK
-0.01% Bond, 1-3 Year Treasury, SHY
-0.02% LargeCap Growth Russell 1000 iS, IWF
-0.02% MidCap Value S&P 400 iS, IJJ
-0.03% Preferred Stock iS, PFF
-0.03% Growth VIPERs, VUG
-0.04% LargeCap Blend S&P 500 iS, IVV
-0.06% India PS, PIN
-0.06% South Africa Index, EZA
-0.06% Value MidCap Russell, IWS
-0.06% LargeCap Blend S&P 100, OEF
-0.07% Agriculture DB PS, DBA
-0.08% MidCap S&P 400 SPDRs, MDY
-0.08% India Earnings WTree, EPI
-0.09% LargeCap Blend Russell 1000 iS, IWB
-0.09% MidCap Blend S&P 400 iS, IJH
-0.10% Hong Kong Index, EWH
-0.11% Basic Materials DJ US, IYM
-0.11% LargeCap Growth S&P 500 iS, IVW
-0.11% Gold Shares S.T., GLD
-0.12% Blend Total Market VIPERs, VTI
-0.12% MidCap Growth S&P 400 iS, IJK
-0.13% LargeCap Blend Russell 3000 iS, IWV
-0.14% Value LargeCap Dynamic PS, PWV
-0.14% Commodity Tracking, DBC
-0.15% Financials VIPERs, VFH
-0.16% Pacific VIPERs, VPL
-0.16% Financial Preferred, PGF
-0.17% Dividend SPDR, SDY
-0.19% Brazil Index, EWZ
-0.20% LargeCap Value Russell 1000 iS, IWD
-0.20% Bond, High-Yield Junk, JNK
-0.20% LargeCap VIPERs, VV
-0.21% S&P 500 SPDRs LargeCap Blend, SPY
-0.21% Europe 350 S&P Index, IEV
-0.21% Global LargeCap Blend MSCI iS, ACWI
-0.21% Dividend ex-U.S. DJ iS, IDV
-0.22% LargeCap Value S&P 500 iS, IVE
-0.23% Switzerland Index, EWL
-0.24% Foreign LargeCap EAFE MSCI iS, EFA
-0.25% MidCap Russell, IWR
-0.26% Value VIPERs, VTV
-0.27% Financial DJ US, IYF
-0.28% Growth EAFE MSCI, EFG
-0.28% Pacific ex-Japan, EPP
-0.28% DIAMONDS (DJIA), DIA
-0.29% Australia Index, EWA
-0.29% EMU Europe Index, EZU
-0.29% Dividend Appreciation Vipers, VIG
-0.29% LargeCap Blend S&P=Weight R, RSP
-0.32% Canada Index, EWC
-0.34% United Kingdom Index, EWU
-0.35% China 25 iS, FXI
-0.35% Global ex U.S. LargeCap Blend, ACWX
-0.35% Financial Services DJ, IYG
-0.36% France Index, EWQ
-0.37% Global 100, IOO
-0.37% Growth MidCap Russell, IWP
-0.38% Financial SPDR, XLF
-0.38% Telecom DJ US, IYZ
-0.39% European VIPERs, VGK
-0.39% Emerging 50 BLDRS, ADRE
-0.40% Oil, Crude, U.S. Oil Fund, USO
-0.40% Latin Am 40, ILF
-0.42% South Korea Index, EWY
-0.43% Value EAFE MSCI, EFV
-0.44% Malaysia Index, EWM
-0.44% Health Care SPDR, XLV
-0.47% Consumer Discretionary SPDR, XLY
-0.48% Italy Index, EWI
