The S&P 500 (SPX: 1,507.84) rose 7.66 points or 0.51% on Tuesday to another new 5-year high. NYSE trading volume rose 19% to confirm the price uptrend.
Popular price momentum oscillators did not confirm the SPX by rising to new highs, however, suggesting continuing momentum divergence. For example, daily and weekly RSI(14) and MACD(12,26,9) have stubbornly remained below their 2011-2012 highs, despite the higher highs for the SPX. In addition, the momentum divergence is more striking for long-term time frames, as measured by the Coppock Curve.
Nasdaq Composite (3,153.66) fell 0.64 points or 0.02%, continuing its bearish divergence.
The Art of Contrary Thinking calls for questioning high and rising optimism. Investor sentiment data indicated high degrees of optimism and bullish complacency in recent weeks, matching or exceeding extremes in September, 2012, when many stock price indexes hit peaks and reversed to the downside. Elevated levels of optimism are bearish because when the majority is extremely bullish, investors are already fully invested in the market. Once everyone who is going to buy has already bought, stocks are vulnerable to a downside shakeout. The pendulum of emotion tends to swing too far in one direction, but the market mood always reverts to the mean–eventually. Pinpoint accuracy is not guaranteed.
Our clients’ separately managed accounts made gains in 6 of the past 7 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Market Indicators
The Dow Theory confirmed a Primary Tide Bull Market on 1/18/13, when both Dow-Jones Industrial and Transportation Averages closed above their closing price highs of the previous 5 years.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) turned systematically bearish again on 1/3/13, when it whipsawed back down below its 50-day SMA.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) turned systematically bullish again on 1/29/13, when it whipsawed back above its 50-day SMA.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) turned systematically neutral on 1/23/13, when it fell below its 50-day SMA.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) turned systematically bullish again on 1/24/13, when it whipsawed back above its 50-day SMA.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) turned systematically bearish on 12/17/12, when the 50-day SMA fell below the 200-day SMA. 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. On the other hand, Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative stability and safety of large size.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) 50-day SMA rose above the 200-day SMA on 1/8/13, thereby turning systematically bullish.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) turned systematically bullish on 12/14/12, when the 50-day SMA crossed above the 200-day SMA.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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
The S&P 500 Composite Potential Support
1498.85, high of 12/26/2007
1489.46, low of 1/24/13
1474.51, high of 9/14/2012
1463.76, low of 1/15/13
1451.64, low on 1/8/13
1448.00, high of 12/19/2012
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1438.59, high of 12/12/2012
1437.39, 50-day SMA
1434.27, high of 11/2/2012
1432.82, low of 12/20/2012
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
1422.58, low of 12/21/2012
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
1409.16, high of 11/23/2012
1403.28, low of 10/26/12
1401.58, low of 12/28/12
1398.11, low of 12/31/2012
1397.82, 200-day SMA
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
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
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tangible Assets, Commodities
U.S. dollar ETF (UUP) turned systematically bearish again on 1/10/13 when it whipsawed back down below its 50-day SMA and a 6-months long downtrend line. 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) price turned systematically bearish on 1/11/13 when the 50-day SMA crossed down below the 200-day SMA.
Crude Oil, United States Oil ETF (USO) price turned systematically neutral on 12/26/12, when price rose above its 50-day SMA. The 50-day SMA has remained below its 200-day SMA consistently every day since 6/7/12. Support 34.38, 33.57, 31.00, 29.02, 26.28, and 22.74. Resistance 35.41, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) price turned systematically neutral on 11/27/12, when it fell below its 50-day SMA. Support: 158.39, 157.40, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 164.40, 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 bearish on 12/27/12, when the 50-day SMA crossed below the 200-day SMA.
Silver, iShares Silver Trust ETF (SLV) price turned systematically neutral again on 1/24/13, when it whipsawed back down below its 50-day SMA. Support 28.61, 27.97, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 31.41, 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 again on 1/25/13, when it whipsawed back down below its 50-day SMA.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) has been consolidating losses in Triangle Consolidation 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.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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
9.31% , JCP , JC PENNEY
11.78% , DHI , D.R. HORTON, DHI
12.78% , VLO , VALERO ENERGY
4.40% , DVN , DEVON ENERGY
3.50% , BSX , BOSTON SCIENT
9.01% , HES , AMERADA HESS
3.36% , VMC , VULCAN MATERIALS
3.38% , CR , CRANE
4.86% , TUP , TUPPERWARE
3.69% , GNTX , Gentex Corporation
0.88% , IYH , Healthcare DJ, IYH
0.45% , IYG , Financial Services DJ, IYG
6.25% , SVU , SUPERVALU
2.71% , MBI , MBIA
1.59% , DELL , DELL
2.37% , GPC , GENUINE PARTS
3.76% , PCL , PLUM CREEK TIMB
2.30% , SCHW.K , CHARLES SCHWAB, SCHW.O
1.10% , FDL , Dividend Leaders, FDL
0.94% , ACWX , Global ex US ACWI iS, ACWX
0.72% , IWC , Microcap Russell, IWC
1.91% , NI , NISOURCE
3.20% , PFE , PFIZER
1.44% , S , SPRINT NEXTEL
2.10% , CLF , CLIFFS NATURAL RESOURCES, CLF
0.66% , EWD , Sweden Index, EWD
1.17% , AMGN , AMGEN
2.48% , HOG , HARLEY DAVIDSON
1.97% , PAYX , PAYCHEX
0.81% , ADRE , Emerging 50 BLDRS, ADRE
3.19% , LLY , ELI LILLY
0.99% , MCO , MOODYS CORP
1.97% , APA , APACHE
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-5.96% , ASH , ASHLAND
-15.06% , LXK , LEXMARK INTL STK A
-4.05% , EMC , EMC
-6.23% , BMC.O , BMC SOFTWARE
-4.64% , F , FORD MOTOR
-5.68% , AMZN , Amazoncom Inc
-3.75% , CTXS , CITRIX SYSTEMS
-5.40% , CECO , CAREER EDUCATION CORP
-3.17% , HPQ , HEWLETT PACKARD
-1.51% , EWI , Italy Index, EWI
-2.89% , TDC , Teradata Corporation, TDC
-3.07% , MU.O , MICRON TECH
-1.38% , AES , AES
-1.47% , WYN , Wyndham Worldwide
-1.48% , IGV , Software, IGV
-3.00% , YHOO , YAHOO
-1.54% , ISIL , INTERSIL CORP
-1.60% , SNI , Scripps Networks Interactive
-1.98% , NYT , NY TIMES STK A
-1.99% , ITW , ILLINOIS TOOL
-2.40% , THC , TENET HEALTHCARE
-0.79% , TROW , T ROWE PRICE GP
-4.50% , RFMD , RF Micro Devices Inc
-0.90% , SDS , Short 200% S&P 500 PS, SDS
-0.72% , HBAN , HUNTINGTON
-3.21% , RIMM , RESEARCH IN MOTION LTD
-0.60% , BCR , C R BARD
-1.83% , IGT , INTL GAME TECH
-2.19% , X , US STEEL CORP
-1.16% , CMCSA , COMCAST HOLDINGS STK A
-2.12% , RHT , Red Hat Inc.
-0.54% , GNW , GENWORTH FINANCIAL
-2.32% , LVLT.K , LEVEL 3 COMMUNICATIONS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.62% Energy SPDR, XLE
1.57% Silver Trust iS, SLV
1.57% Energy DJ, IYE
1.52% Energy & Nat Res iS GS, IGE
1.52% Taiwan Index, EWT
1.51% Energy VIPERs, VDE
1.44% China 25 iS, FXI
1.34% Japan Index, EWJ
1.32% South Korea Index, EWY
1.28% Thailand MSCI iS, THD
1.27% Turkey MSCI iS, TUR
1.20% Pacific VIPERs, VPL
1.18% Emerging VIPERs, VWO
1.17% Energy Global, IXC
1.13% South Africa Index, EZA
1.12% Emerging Markets MSCI iS, EEM
1.08% Health Care SPDR, XLV
1.04% Brazil Index, EWZ
1.04% Australia Index, EWA
1.04% Value LargeCap Dynamic PS, PWV
1.01% Homebuilders SPDR, XHB
1.00% Oil, Crude, U.S. Oil Fund, USO
0.96% Capital Markets KWB ST, KCE
0.96% Metals & Mining SPDR, XME
0.95% Latin Am 40, ILF
0.94% Global ex U.S. LargeCap Blend, ACWX
0.94% Indonesia MV, IDX
0.93% United Kingdom Index, EWU
0.91% Pacific ex-Japan, EPP
0.89% Utilities VIPERs, VPU
0.89% Value EAFE MSCI, EFV
0.89% Oil Fund PowerShares, DBO
0.85% Mexico Index, EWW
0.83% India PS, PIN
0.83% Malaysia Index, EWM
0.81% Emerging 50 BLDRS, ADRE
0.80% Dividend ex-U.S. DJ iS, IDV
0.79% Hong Kong Index, EWH
0.77% Basic Materials DJ US, IYM
0.74% Global 100, IOO
0.72% Microcap Russell, IWC
0.70% Value VIPERs, VTV
0.69% Utilities SPDR, XLU
0.68% Foreign LargeCap EAFE MSCI iS, EFA
0.68% Water Resources, PHO
0.67% Dividend International, PID
0.66% Sweden Index, EWD
0.64% Global LargeCap Blend MSCI iS, ACWI
0.60% India Earnings WTree, EPI
0.59% Value MidCap Russell, IWS
0.57% Commodity Tracking, DBC
0.57% European VIPERs, VGK
0.56% Chile MSCI iS, ECH
0.56% Materials SPDR, XLB
0.55% Canada Index, EWC
0.54% Consumer Staples SPDR, XLP
0.53% LargeCap Blend S&P 100, OEF
0.53% Financials VIPERs, VFH
0.52% Telecom DJ US, IYZ
0.52% LargeCap Value S&P 500 iS, IVE
0.52% LargeCap Value Russell 1000 iS, IWD
0.51% Europe 350 S&P Index, IEV
0.51% Germany Index, EWG
0.49% Frontier Markets Guggenheim , FRN
0.49% Dividend SPDR, SDY
0.47% Dividend Appreciation Vipers, VIG
0.45% Dividend U.S. DJ iS, DVY
0.45% Financial Services DJ, IYG
0.44% Gold Shares S.T., GLD
0.42% Dividend High Yield Equity PS, PEY
0.42% Growth EAFE MSCI, EFG
0.42% DIAMONDS (DJIA), DIA
0.42% LargeCap VIPERs, VV
0.40% Financial DJ US, IYF
0.40% Financial SPDR, XLF
0.39% S&P 500 SPDRs LargeCap Blend, SPY
0.37% LargeCap Blend Russell 1000 iS, IWB
0.37% France Index, EWQ
0.36% LargeCap Blend Russell 3000 iS, IWV
0.34% Blend Total Market VIPERs, VTI
0.33% LargeCap Blend S&P 500 iS, IVV
0.32% Netherlands Index, EWN
0.29% Singapore Index, EWS
0.29% LargeCap Growth S&P 500 iS, IVW
0.29% MidCap Russell, IWR
0.29% REIT VIPERs, VNQ
0.28% Bond Ex-US Treas, BWX
0.28% LargeCap Blend S&P=Weight R, RSP
0.28% Switzerland Index, EWL
0.23% WilderHill Clean Energy PS, PBW
0.22% Industrial SPDR, XLI
0.21% SmallCap Value Russell 2000 iS, IWN
0.20% SmallCap Blend EAFE MSCI iS, SCZ
0.19% Value SmallCap VIPERS, VBR
0.19% Real Estate US DJ iS, IYR
0.17% SmallCap Value S&P 600 iS, IJS
0.15% LargeCap Growth Russell 1000 iS, IWF
0.14% REIT Wilshire, RWR
0.14% EMU Europe Index, EZU
0.14% Technology SPDR, XLK
0.13% Russia MV, RSX
0.09% Realty Cohen & Steers, ICF
0.07% Growth VIPERs, VUG
0.06% SmallCap Blend Russell 2000 iS, IWM
0.05% MidCap Value S&P 400 iS, IJJ
0.05% Biotech SPDR, XBI
0.05% SmallCap Blend S&P 600 iS, IJR
0.01% QQQ Nasdaq 100 Trust, QQQ
0.01% Bond, 1-3 Year Treasury, SHY
0.01% MidCap Blend S&P 400 iS, IJH
0.01% Bond Treasury Short-Term iS, SHV
0.00% Belgium Index, EWK
0.00% Austria Index, EWO
-0.04% MidCap Growth S&P 400 iS, IJK
-0.05% Preferred Stock iS, PFF
-0.05% MidCap S&P 400 SPDRs, MDY
-0.06% Small Cap VIPERs, VB
-0.06% Bond, Muni S&P ATM-Free iS, MUB
-0.06% Bond, Intermediate US Aggregate iS, AGG
-0.07% SmallCap Growth S&P 600 iS, IJT
-0.09% Growth MidCap Russell, IWP
-0.11% Financial Preferred, PGF
-0.12% Transportation Av DJ, IYT
-0.13% SmallCap Growth Russell 2000 iS, IWO
-0.14% Agriculture DB PS, DBA
-0.15% Bond, 10 Year Treasury, IEF
-0.17% Bond, High Yield Corp iBoxx iS, HYG
-0.18% Bond, TIPS U.S. Treasury iS, TIP
-0.18% Spain Index, EWP
-0.20% China LargeCap Growth G D H USX PS, PGJ
-0.22% Bond, Emerg Mkt JPM iS, EMB
-0.23% Bond, Long-Term Corp iBoxx iS, LQD
-0.23% Growth SmallCap VIPERs, VBK
-0.32% Technology DJ US, IYW
-0.34% Bond, High-Yield Junk, JNK
-0.35% Info Tech VIPERs, VGT
-0.39% Consumer Discretionary SPDR, XLY
-0.50% Bear, Short S&P 500, SH
-0.55% Bond, 20+ Years Treasury, TLT
-0.64% Semiconductor iS IGW, SOXX
-1.35% Semiconductor SPDR, XSD
-1.51% Italy Index, EWI
-2.02% Networking, IGN
