The S&P 500 (SPX: 1,446.79) rose 16.43 points or 1.15% on Tuesday, to its highest level in more than 8 weeks.
The Dow-Jones Transportation Average rose above its September-October highs, but the Dow-Jones Industrial Average remained substantially below its highs, thereby demonstrating non confirmation and bearish divergence.
NYSE trading volume rose 24% on Tuesday to a level that was 20% above its 200-day SMA. High volume may reflect position adjustments before year-end and before expiration of options and futures this week, as well as surprisingly high optimism about a fiscal cliff deal.
Corporate insiders sold 6.67 shares for each share bought in December 2012–up from 1.54-to-1 in November 2012, and up from a 20-year average of 3.41-to-1. As Mark Hulbert wrote, “The picture the data paint is unmistakably bearish.”
“Global fund managers are more bullish about economic growth than they have been in nearly two years,” according to the monthly Bank of America Merrill Lynch fund manager survey, cnbc.com/id/100325382. “Risk appetite has also risen, with the percentage of investors that would be willing to take on higher-than-normal risk at its highest level since April 2011.” Note that the S&P 500 high close for 2011 was on April 29, 2011, and that peak was followed by 19% drop to the low on October 3, 2011. Today, the S&P 500 is 6% higher than it was in April 2011. The fund managers have also over-weighted European equities relative to U.S. equities for the first time since November 2010.
The Art of Contrary Thinking calls for questioning popular optimism. I am skeptical that SPX will be able to overcome technical resistance around its September-October highs. The technical condition of the stock market has not supported the excessive optimism that the bullish majority of stock investors and traders clearly exhibit now and over the past several months. Low volume (most days) has revealed a lack of big buying power. Long-term momentum has been showing bearish divergence and has weakened considerably since the S&P 500 price peak on 9/14/12. And the bull phase of the 4-year cycle is long in tooth. 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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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
The S&P 500 Composite Potential Support
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1438.59, high of 12/12/2012
1434.27, high of 11/2/2012
1430.53, low of 9/26/2012
1426.76, low of 12/12/2012
1425.53, low of 10/12/2012
1425.48, Fibonacci 23.6% of June-Sept ’12 range
1424.41, Fibonacci 61.8% of Sept-Nov ’12 range
1423.73, high of 12/3/2012
1422.38, high of 4/2/2012
1422.06, low of 10/22/2012
1421.12, high of 10/25/2012
1420.34, high of 12/7/2012
1419.70, high of 11/29/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
1414.38, 50-day SMA
1409.16, high of 11/23/2012
1403.28, low of 10/26/12
1398.23, low of 12/5/2012
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
1388.15, 200-day SMA
1385.43, low of 11/28/2012
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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Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) fell below its 50-day SMA on 12/12/12, thereby turning systematically neutral again. TLT fell below its 200-day SMA on 12/17/12. TLT’s 50-day SMA has remained above the 200-day SMA every day since 6/24/11. Support 119.87, 118.05, 117.44, 115.69, 114.82, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance: 126.08, 127.19, 127.72, 130.69, and 132.22.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) fell below its 50-day SMA on 12/12/12, thereby turning systematically neutral again. IEF fell below its 200-day SMA on 12/18/12. IEF’s 50-day SMA has remained above the 200-day SMA every day since 6/21/11. Support 106.59, 106.42, 105.84, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance: 109.20, 109.32, and 109.89.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) rose above its 50-day SMA on 11/28/12, thereby turning systematically neutral again. JNK/LQD 50-day SMA has remained consistently below the 200-day SMA every day since 6/1/12.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) turned systematically bullish again on 12/6/12 when it rose above its 50-day SMA. TIP/IEF rose above its 200-day SMA on 9/27/12, and the 50-day SMA rose above the 200-day SMA on 10/10/12.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) turned systematically bearish again on 12/11/12 when it fell below its 50-day SMA. UUP fell below its 200-day SMA on 8/31/12, and the 50-day SMA fell below the 200-day SMA on 10/2/12. Support 21.57, 21.07, and 20.84. Resistance 22.05, 22.30, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) turned systematically neutral again on 11/30/12 when price crossed back down below its 50-day SMA. DBA has been whipsawing around its 200-day SMA in recent days. The 50-day SMA remains above the 200-day SMA, although the 50-200 spread has been narrowing gradually.
Crude Oil, United States Oil ETF (USO) turned systematically bearish on 9/19/12, when price fell below its 50-day SMA. USO price fell below its 200-day SMA on 9/17/12, and the 50-day SMA has remained below its 200-day SMA consistently every day since 6/7/12. Support 31.00, 29.02, 26.28, and 22.74. Resistance 32.93, 34.70, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) turned systematically neutral on 11/27/12, when price fell below its 50-day SMA. GLD price rose above its 200-day SMA on 8/22/12. GLD 50-day SMA rose above the 200-day SMA on 9/20/12. Support: 159.56, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 166.94, 170.01, 174.07, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) turned systematically neutral on 11/5/12 when it fell below its 50-day SMA. The 50-day SMA has been above the 200-day SMA since 10/19/12–but the 50-200 spread has been narrowing and a bearish crossover appears probable in weeks ahead.
Silver, iShares Silver Trust ETF (SLV) turned systematically neutral again on 12/13/12 when it whipsawed below its 50-day SMA. The 50-day SMA crossed above the 200-day SMA on 10/1/12. Support 29.84, 29.28, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 32.72, 33.31, 34.08, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) turned systematically neutral on 12/14/12 when it fell below its 50-day SMA. Longer term, SLV/GLD 50-day SMA crossed above the 200-day SMA on 10/9/12.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) rose above both its 50-day SMA and 200-day SMA on 11/30/12. Long term, JJC has been consolidating losses in Triangle chart pattern trading range between 38.99 and 51.41 for more than a year since October 2011. “Dr. Copper” is widely accepted as one of the better indicators of investor confidence (or lack thereof) in the global industrial economy.
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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
5.90% , LVLT.K , LEVEL 3 COMMUNICATIONS
1.58% , RPV , Value S&P 500, RPV
3.38% , GCI , GANNETT
1.29% , JKF , Value LargeCap iS M, JKF
5.86% , PTEN , Patterson-UTI Energy Inc
1.41% , IWS , Value MidCap Russell, IWS
5.68% , NBR , NABORS
4.53% , ATI , ALLEGHENY TECH
3.40% , PWER , POWER ONE
1.83% , PPA , Aerospace & Defense, PPA
2.95% , QLD , Ultra QQQ Double, QLD
2.96% , CCE , COCA COLA ENTER
2.80% , MVV , Ultra MidCap400 Double, MVV
3.17% , BHI , BAKER HUGHES
2.12% , IGN , Networking, IGN
3.76% , HAL , HALLIBURTON
3.66% , PH , PARKER HANNIFIN
1.37% , PHO , Water Resources, PHO
1.58% , IJT , Growth BARRA Small Cap 600, IJT
1.93% , IGM , Technology GS, IGM
1.62% , PXE , Energy Exploration & Prod, PXE
3.55% , HP , Helmerich & Payne HP
3.49% , APA , APACHE
3.09% , GNW , GENWORTH FINANCIAL
1.44% , JKL , Value SmallCap iS M, JKL
2.61% , FLR , FLUOR
2.58% , AMZN , Amazoncom Inc
1.70% , PKB , Building & Construction, PKB
3.05% , PFG , PRINCIPAL FINL
1.44% , VXF , Extended Mkt VIPERs, VXF
1.54% , IYT , Transportation Av DJ, IYT
3.61% , CMA , COMERICA
1.30% , IWP , Growth MidCap Russell, IWP
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.19% , RAI , Reynolds American
-1.76% , SLV , Silver Trust iS, SLV
-1.44% , GLD , Gold Shares S.T., GLD
-3.15% , EWA , Australia Index, EWA
-1.47% , SIL , Silver Miners Global X, SIL
-2.26% , LO , Lorillard, Inc. LO
-1.03% , SH , Short 100% S&P 500, SH
-1.64% , PSQ , Short 100% QQQ, PSQ
-1.82% , EWT , Taiwan Index, EWT
-2.24% , PAYX , PAYCHEX
-1.76% , MDP , MEREDITH
-2.27% , SDS , Short 200% S&P 500 PS, SDS
-1.21% , MO , ALTRIA, MO
-1.45% , IAU , Gold COMEX iS, IAU
-0.51% , EWP , Spain Index, EWP
-3.07% , QID , Short 200% QQQ PS, QID
-0.97% , LAMR , Lamar Advertising Company
-1.02% , TLT , Bond, 20+ Years Treasury, TLT
-1.09% , GE , GENERAL ELECTRIC
-0.57% , PMCS , PMC SIERRA
-2.81% , MZZ , Short 200% MidCap 400 PS, MZZ
-0.46% , AON , AON
-0.29% , TIP , Bond, TIPS, TIP
-7.47% , RSH , RADIOSHACK
-0.46% , K , KELLOGG
-0.67% , NEM , NEWMONT MINING
-1.20% , DISH , EchoStar Communications
-0.15% , GVI , Bond Interm U.S. Gov, GVI
-1.01% , PM , Philip Morris, PM
-0.30% , EFG , Growth EAFE MSCI, EFG
-0.75% , EWH , Hong Kong Index, EWH
-0.57% , VZ , VERIZON COMMS
-0.52% , THD , Thailand MSCI iS, THD
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.15% Semiconductor SPDR, XSD
2.12% Networking, IGN
2.09% Homebuilders SPDR, XHB
1.91% Technology DJ US, IYW
1.88% Semiconductor iS IGW, SOXX
1.84% Energy SPDR, XLE
1.78% Energy VIPERs, VDE
1.71% Metals & Mining SPDR, XME
1.70% Energy DJ, IYE
1.68% Info Tech VIPERs, VGT
1.66% Financial Services DJ, IYG
1.63% Growth SmallCap VIPERs, VBK
1.61% SmallCap Blend S&P 600 iS, IJR
1.59% SmallCap Growth Russell 2000 iS, IWO
1.58% SmallCap Value S&P 600 iS, IJS
1.58% SmallCap Growth S&P 600 iS, IJT
1.54% Transportation Av DJ, IYT
1.53% MidCap Value S&P 400 iS, IJJ
1.52% Austria Index, EWO
1.52% QQQ Nasdaq 100 Trust, QQQ
1.51% China LargeCap Growth G D H USX PS, PGJ
1.50% Energy & Nat Res iS GS, IGE
1.48% Technology SPDR, XLK
1.48% Sweden Index, EWD
1.47% WilderHill Clean Energy PS, PBW
1.47% Financial SPDR, XLF
1.43% Capital Markets KWB ST, KCE
1.41% Value MidCap Russell, IWS
1.40% Belgium Index, EWK
1.40% Biotech SPDR, XBI
1.38% Financials VIPERs, VFH
1.38% MidCap Russell, IWR
1.38% MidCap Growth S&P 400 iS, IJK
1.38% MidCap S&P 400 SPDRs, MDY
1.38% Russia MV, RSX
1.37% Small Cap VIPERs, VB
1.37% SmallCap Blend Russell 2000 iS, IWM
1.37% Water Resources, PHO
1.33% MidCap Blend S&P 400 iS, IJH
1.32% Value SmallCap VIPERS, VBR
1.32% Financial DJ US, IYF
1.31% Energy Global, IXC
1.31% SmallCap Value Russell 2000 iS, IWN
1.30% Growth MidCap Russell, IWP
1.30% Basic Materials DJ US, IYM
1.29% Industrial SPDR, XLI
1.27% Microcap Russell, IWC
1.25% LargeCap Blend S&P=Weight R, RSP
1.22% Value LargeCap Dynamic PS, PWV
1.20% Growth VIPERs, VUG
1.19% Materials SPDR, XLB
1.18% LargeCap Blend S&P 500 iS, IVV
1.17% Consumer Discretionary SPDR, XLY
1.17% LargeCap Value Russell 1000 iS, IWD
1.17% Blend Total Market VIPERs, VTI
1.16% LargeCap Value S&P 500 iS, IVE
1.16% LargeCap Blend Russell 3000 iS, IWV
1.14% LargeCap Blend Russell 1000 iS, IWB
1.13% LargeCap Blend S&P 100, OEF
1.11% S&P 500 SPDRs LargeCap Blend, SPY
1.11% LargeCap VIPERs, VV
1.11% LargeCap Growth Russell 1000 iS, IWF
1.09% Value VIPERs, VTV
1.09% LargeCap Growth S&P 500 iS, IVW
1.08% Dividend International, PID
1.06% Dividend High Yield Equity PS, PEY
1.03% Realty Cohen & Steers, ICF
1.03% European VIPERs, VGK
1.03% REIT VIPERs, VNQ
1.03% Real Estate US DJ iS, IYR
1.03% Germany Index, EWG
1.02% Global 100, IOO
1.00% Pacific VIPERs, VPL
1.00% Latin Am 40, ILF
0.98% Telecom DJ US, IYZ
0.96% Dividend Appreciation Vipers, VIG
0.96% Emerging 50 BLDRS, ADRE
0.95% Dividend SPDR, SDY
0.95% REIT Wilshire, RWR
0.94% Dividend U.S. DJ iS, DVY
0.88% Mexico Index, EWW
0.88% Europe 350 S&P Index, IEV
0.84% DIAMONDS (DJIA), DIA
0.78% Health Care SPDR, XLV
0.75% Switzerland Index, EWL
0.74% Frontier Markets Guggenheim , FRN
0.73% EMU Europe Index, EZU
0.70% Utilities SPDR, XLU
0.69% Dividend ex-U.S. DJ iS, IDV
0.68% Oil Fund PowerShares, DBO
0.68% Utilities VIPERs, VPU
0.63% Emerging VIPERs, VWO
0.62% Chile MSCI iS, ECH
0.61% Italy Index, EWI
0.57% India Earnings WTree, EPI
0.55% Oil, Crude, U.S. Oil Fund, USO
0.48% Brazil Index, EWZ
0.47% Japan Index, EWJ
0.47% China 25 iS, FXI
0.39% France Index, EWQ
0.32% Netherlands Index, EWN
0.25% Commodity Tracking, DBC
0.23% Bond Ex-US Treas, BWX
0.23% Preferred Stock iS, PFF
0.19% South Africa Index, EZA
0.16% Financial Preferred, PGF
0.11% India PS, PIN
0.11% Turkey MSCI iS, TUR
0.08% Emerging Markets MSCI iS, EEM
0.05% Bond, High Yield Corp iBoxx iS, HYG
0.02% Global LargeCap Blend MSCI iS, ACWI
0.00% Bond, High-Yield Junk, JNK
0.00% Bond Treasury Short-Term iS, SHV
-0.03% Consumer Staples SPDR, XLP
-0.06% Bond, 1-3 Year Treasury, SHY
-0.06% Foreign LargeCap EAFE MSCI iS, EFA
-0.07% Malaysia Index, EWM
-0.07% Bond, Emerg Mkt JPM iS, EMB
-0.10% Indonesia MV, IDX
-0.14% Value EAFE MSCI, EFV
-0.17% Global ex U.S. LargeCap Blend, ACWX
-0.23% Bond, Intermediate US Aggregate iS, AGG
-0.25% Bond, Long-Term Corp iBoxx iS, LQD
-0.26% South Korea Index, EWY
-0.28% Agriculture DB PS, DBA
-0.29% Bond, TIPS U.S. Treasury iS, TIP
-0.30% Growth EAFE MSCI, EFG
-0.33% Bond, Muni S&P ATM-Free iS, MUB
-0.39% Bond, 10 Year Treasury, IEF
-0.51% Spain Index, EWP
-0.52% Thailand MSCI iS, THD
-0.61% United Kingdom Index, EWU
-0.75% Hong Kong Index, EWH
-0.84% Canada Index, EWC
-0.87% SmallCap Blend EAFE MSCI iS, SCZ
-1.02% Bond, 20+ Years Treasury, TLT
-1.03% Bear, Short S&P 500, SH
-1.44% Gold Shares S.T., GLD
-1.76% Silver Trust iS, SLV
-1.82% Taiwan Index, EWT
-2.01% Singapore Index, EWS
-2.05% Pacific ex-Japan, EPP
-3.15% Australia Index, EWA
