U.S. dollar ETF (UUP) rose above its 200-day SMA and above 3-months’ highs.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price fell below 7-months’ lows.
Crude Oil, United States Oil ETF (USO) price fell to its lowest level in more than 7 weeks, confirming a downside correction for the short term, at least.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the previous 9 weeks.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below 4-months’ lows, confirming a medium-term downtrend.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) fell below its lows of the previous 13 months.
Thursday’s stock price action could be interpreted as a Breakaway Gap. Stocks gapped lower on the open and never saw the plus side all day. Volume rose. Stock price indexes closed below their lows of the previous 11 trading days and have broken down from a 7-week rising price channel.
The S&P 500 (SPX: 1,502.42) finished down 0.63%, the Nasdaq Composite Index fell 1.04%, the Dow Jones Industrial Average lost 0.34%, and the Dow Jones Transportation Average declined 0.78%. Declines outnumbered Advances by nearly 3 to 1.
Under the surface, many daily price momentum oscillators have been having a hard time keeping up with the price indexes, suggesting continuing non-confirmation and bearish divergence compared to the S&P 500. Momentum oscillators have remained below their 2011-2012 highs and below their highs of late January. For example, RSI(14) fell to 51.25 on Thursday, the lowest level in 7 weeks and down from a peak at 74.46 on 1/29/13. MACD(12,26,9) also peaked on 1/29/13, crossed below its signal line on 2/4/13, and fell to its lowest level in more than 6 weeks on Thursday 2/21/13. Bearishly diverging momentum is a problem because momentum is a leading indicator of price.
The Art of Contrary Thinking has been calling for questioning strong bullish sentiment. Investor sentiment data indicates 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. Sentiment extremes are a leading indicator of price.
Our clients’ separately managed accounts made gains in 6 of the past 7 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
1530.94, high of 2/19/2013
The S&P 500 Composite Potential Support
1495.02, low of 2/4/2013
1489.46, low of 1/24/2013
1474.51, high of 9/14/2012
1473.58, 50-day SMA
1463.76, low of 1/15/2013
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
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
1407.88, 200-day SMA
1403.28, low of 10/26/12
1401.58, low of 12/28/12
1398.11, low of 12/31/2012
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
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) price may be trying to form a base after hitting an “oversold” low at 115.51 on 2/1/13 and successfully testing that low on 2/13/13 and again on 2/20/13. Various technical oscillators show losses of downside momentum and bullish divergences. Support 115.51, 114.82, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance: 117.85, 120.70, 123.71, 126.08, 127.19, 127.72, 130.69, and 132.22.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) price may be trying to form a base after hitting an “oversold” low at 105.56 on 2/1/13 and successfully testing that low on 2/13/13. Various technical oscillators show losses of downside momentum and bullish divergences. Support 105.56, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance: 107.35, 108.07, 108.15, 109.20, 109.32, and 109.89.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) 50-day SMA crossed above the 200-day SMA on 1/14/13, thereby turning systematically bullish. Price peaked on 1/25/13 and fell below the lows of the previous 2 months on 2/7/13.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below its 50-day SMA on 2/15/13, thereby turning systematically neutral. Absolute price fell to a lower 5-month low on 2/20/13. TIP has been in a medium-term downtrend since peaking at 123.44 on 12/6/12. TIP price is now systematically neutral–but it appears to be rapidly heading toward a “Dead Cross” bearish 50/200 SMA crossover in days ahead.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) rose above its 200-day SMA and above 3-months’ highs on 2/21/13. UUP turned systematically neutral on 2/7/13 when it rose above its 50-day SMA. The 50-day SMA fell below the 200-day SMA on 10/2/12. Longer term, UUP has been consolidating secular trend losses since bottoming at 20.84 on 5/4/11. Support 21.53, 21.07, and 20.84. Resistance 22.30, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price fell below 7-months’ lows on 2/21/13. 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 fell to its lowest level in more than 7 weeks on 2/21/13, confirming a downside correction for the short term, at least. Longer term, USO has been mostly bearish since peaking at 119.17 on 7/11/08. Support 31.00, 29.02, 26.28, and 22.74. Resistance 35.53, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) price fell below 7-months’ lows on 2/20/13, confirming the medium-term downtrend that started on 10/4/12. GLD price turned systematically neutral on 11/27/12, when it fell below its 50-day SMA. The 50-day SMA is heading for a bearish “Dead Cross” below the 200-day SMA in days ahead. Longer term, GLD has been mostly bearish since peaking at 185.85 on 9/6/11. Support: 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 fell below 6-months’ lows on 2/20/13. Price turned systematically neutral on 2/7/13 when it fell below its 50-day SMA. The 50-day SMA appears to be heading toward a bearish “Dead Cross” below the 200-day SMA in weeks ahead. Longer term, SLV price has been mostly bearish since peaking at 48.35 on 4/28/11. Support 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 28.61, 29.73, 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) fell below 6-weeks’ lows on 2/21/13. SLV/GLD remains below both its falling 50-day SMA and its falling 200-day SMA.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the previous 9 weeks on 2/21/13. JJC remains systematically neutral. JJC has been consolidating losses between 38.99 and 51.41 since 10/5/11. Longer term, JJC has been mostly bearish since peaking at 61.69 on 2/14/11. “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
14.11% , SWY , SAFEWAY
1.55% , CPWR , COMPUWARE
3.94% , KR , KROGER
2.05% , MZZ , Short 200% MidCap 400 PS, MZZ
2.79% , SNPS , Synopsys Inc
1.01% , PSQ , Short 100% QQQ, PSQ
2.90% , DLTR , Dollar Tree Stores Inc
2.40% , HPQ , HEWLETT PACKARD
3.09% , IP , INTL PAPER
0.99% , MYY , Short 100% MidCap 400, MYY
2.49% , MRVL , MARVELL TECHNOLOGY
6.74% , JCP , JC PENNEY
1.98% , CROX , CROCS Inc., CROX
1.52% , WMT , WAL MART STORES
1.01% , CB , CHUBB
2.25% , QID , Short 200% QQQ PS, QID
0.59% , SH , Short 100% S&P 500, SH
1.03% , WFC , WELLS FARGO
0.34% , DOG , Short 100% Dow 30, DOG
0.54% , LXK , LEXMARK INTL STK A
0.87% , CL , COLGATE
0.89% , MO , ALTRIA, MO
0.16% , LQD , Bond, Corp, LQD
1.13% , PM , Philip Morris, PM
1.11% , SDS , Short 200% S&P 500 PS, SDS
0.96% , NKE , NIKE STK B
0.74% , RAI , Reynolds American
1.20% , TGT , TARGET
0.48% , DXD , Short 200% Dow 30 PS, DXD
0.39% , GOOG , Google
0.11% , HYG , Bond High-Yield Corporate, HYG
0.37% , ED , CON ED
0.27% , CMS , CMS ENERGY
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-10.83% , RFMD , RF Micro Devices Inc
-1.21% , IOO , Global 100, IOO
-3.97% , PCG , PG&E
-1.12% , FRN , Frontier Markets Guggenheim , FRN
-1.43% , EPP , Pacific ex-Japan, EPP
-3.67% , PDCO , Patterson Dental Company
-0.88% , IWR , MidCap Russell, IWR
-3.43% , PBW , WilderHill Clean Energy PS, PBW
-2.07% , PIN , India PS, PIN
-2.59% , FII , FED INVESTORS STK B
-1.44% , IGN , Networking, IGN
-3.74% , RHT , Red Hat Inc.
-2.34% , FEZ , Euro STOXX 50, FEZ
-3.10% , HD , HOME DEPOT
-2.14% , EMN , EASTMAN CHEM
-1.96% , EWP , Spain Index, EWP
-2.27% , EWQ , France Index, EWQ
-2.13% , WMB , WILLIAMS
-2.77% , GS , GOLDMAN SACHS
-2.08% , PAYX , PAYCHEX
-1.86% , PGJ , China LargeCap Growth G D H USX PS, PGJ
-1.50% , COL , ROCKWELL COLLINS
-2.04% , KCE , Capital Markets KWB ST, KCE
-1.64% , IEV , Europe 350 S&P Index, IEV
-2.82% , ASH , ASHLAND
-4.93% , KWT , Solar Energy MV, KWT
-1.89% , KLAC , KLA TENCOR
-4.83% , ZEUS , Olympic Steel, ZEUS
-1.10% , VPL , Pacific VIPERs, VPL
-2.54% , EXPD , Expeditors International WA
-3.70% , AMD , ADV MICRO DEV
-2.44% , HES , AMERADA HESS
-3.93% , XRAY , DENTSPLY International Inc
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
0.78% Gold Shares S.T., GLD
0.59% Bear, Short S&P 500, SH
0.58% Bond, 20+ Years Treasury, TLT
0.51% Silver Trust iS, SLV
0.32% Consumer Staples SPDR, XLP
0.20% Bond, 10 Year Treasury, IEF
0.16% Bond, Long-Term Corp iBoxx iS, LQD
0.13% Bond, Muni S&P ATM-Free iS, MUB
0.12% Bond, TIPS U.S. Treasury iS, TIP
0.11% Bond, High Yield Corp iBoxx iS, HYG
0.10% Bond, High-Yield Junk, JNK
0.05% Bond, Intermediate US Aggregate iS, AGG
0.05% Financial Preferred, PGF
0.04% Bond, 1-3 Year Treasury, SHY
0.00% Bond Ex-US Treas, BWX
0.00% Bond Treasury Short-Term iS, SHV
-0.01% Preferred Stock iS, PFF
-0.16% Bond, Emerg Mkt JPM iS, EMB
-0.25% Telecom DJ US, IYZ
-0.27% DIAMONDS (DJIA), DIA
-0.30% Dividend High Yield Equity PS, PEY
-0.34% Value LargeCap Dynamic PS, PWV
-0.42% Malaysia Index, EWM
-0.42% Dividend Appreciation Vipers, VIG
-0.43% Utilities SPDR, XLU
-0.44% Utilities VIPERs, VPU
-0.44% Dividend U.S. DJ iS, DVY
-0.45% Health Care SPDR, XLV
-0.45% South Korea Index, EWY
-0.47% LargeCap Blend S&P 100, OEF
-0.48% Energy & Nat Res iS GS, IGE
-0.49% Indonesia MV, IDX
-0.50% Homebuilders SPDR, XHB
-0.52% LargeCap Value S&P 500 iS, IVE
-0.57% Value VIPERs, VTV
-0.57% Dividend SPDR, SDY
-0.57% Mexico Index, EWW
-0.58% LargeCap Blend S&P 500 iS, IVV
-0.61% S&P 500 SPDRs LargeCap Blend, SPY
-0.62% LargeCap Blend Russell 1000 iS, IWB
-0.62% LargeCap VIPERs, VV
-0.63% LargeCap Growth Russell 1000 iS, IWF
-0.63% Energy DJ, IYE
-0.63% Canada Index, EWC
-0.65% LargeCap Value Russell 1000 iS, IWD
-0.67% LargeCap Blend Russell 3000 iS, IWV
-0.68% Blend Total Market VIPERs, VTI
-0.69% LargeCap Growth S&P 500 iS, IVW
-0.70% Energy SPDR, XLE
-0.70% Growth VIPERs, VUG
-0.71% Energy Global, IXC
-0.71% Transportation Av DJ, IYT
-0.72% Financial DJ US, IYF
-0.73% Industrial SPDR, XLI
-0.74% SmallCap Value S&P 600 iS, IJS
-0.75% REIT VIPERs, VNQ
-0.76% Chile MSCI iS, ECH
-0.78% United Kingdom Index, EWU
-0.78% Energy VIPERs, VDE
-0.78% Real Estate US DJ iS, IYR
-0.79% Agriculture DB PS, DBA
-0.79% Financial SPDR, XLF
-0.81% Realty Cohen & Steers, ICF
-0.81% REIT Wilshire, RWR
-0.81% Technology SPDR, XLK
-0.83% Singapore Index, EWS
-0.83% Consumer Discretionary SPDR, XLY
-0.84% Financials VIPERs, VFH
-0.85% Value MidCap Russell, IWS
-0.88% MidCap S&P 400 SPDRs, MDY
-0.88% Microcap Russell, IWC
-0.88% MidCap Russell, IWR
-0.92% SmallCap Blend S&P 600 iS, IJR
-0.92% Materials SPDR, XLB
-0.92% Global LargeCap Blend MSCI iS, ACWI
-0.92% LargeCap Blend S&P=Weight R, RSP
-0.93% MidCap Value S&P 400 iS, IJJ
-0.93% Thailand MSCI iS, THD
-0.93% Metals & Mining SPDR, XME
-0.94% Financial Services DJ, IYG
-0.94% Water Resources, PHO
-0.94% Growth MidCap Russell, IWP
-0.95% SmallCap Value Russell 2000 iS, IWN
-0.95% Russia MV, RSX
-0.97% Dividend International, PID
-0.97% SmallCap Blend Russell 2000 iS, IWM
-0.99% Value SmallCap VIPERS, VBR
-1.01% MidCap Blend S&P 400 iS, IJH
-1.05% SmallCap Blend EAFE MSCI iS, SCZ
-1.05% Small Cap VIPERs, VB
-1.05% Info Tech VIPERs, VGT
-1.06% Emerging 50 BLDRS, ADRE
-1.07% QQQ Nasdaq 100 Trust, QQQ
-1.08% SmallCap Growth Russell 2000 iS, IWO
-1.10% Pacific VIPERs, VPL
-1.10% MidCap Growth S&P 400 iS, IJK
-1.11% Basic Materials DJ US, IYM
-1.12% Frontier Markets Guggenheim , FRN
-1.14% Emerging VIPERs, VWO
-1.15% Commodity Tracking, DBC
-1.15% Hong Kong Index, EWH
-1.17% Technology DJ US, IYW
-1.17% Taiwan Index, EWT
-1.19% Japan Index, EWJ
-1.21% Global 100, IOO
-1.22% SmallCap Growth S&P 600 iS, IJT
-1.23% Growth SmallCap VIPERs, VBK
-1.23% Latin Am 40, ILF
-1.27% Biotech SPDR, XBI
-1.28% Growth EAFE MSCI, EFG
-1.29% Global ex U.S. LargeCap Blend, ACWX
-1.36% China 25 iS, FXI
-1.36% Emerging Markets MSCI iS, EEM
-1.39% South Africa Index, EZA
-1.41% Switzerland Index, EWL
-1.43% Pacific ex-Japan, EPP
-1.44% Networking, IGN
-1.50% Foreign LargeCap EAFE MSCI iS, EFA
-1.52% European VIPERs, VGK
-1.52% Brazil Index, EWZ
-1.62% Value EAFE MSCI, EFV
-1.62% Dividend ex-U.S. DJ iS, IDV
-1.64% Europe 350 S&P Index, IEV
-1.75% Australia Index, EWA
-1.76% Sweden Index, EWD
-1.83% Austria Index, EWO
-1.86% China LargeCap Growth G D H USX PS, PGJ
-1.87% Semiconductor iS IGW, SOXX
-1.90% Germany Index, EWG
-1.96% Spain Index, EWP
-2.04% Capital Markets KWB ST, KCE
-2.07% Belgium Index, EWK
-2.07% India PS, PIN
-2.14% EMU Europe Index, EZU
-2.17% Oil, Crude, U.S. Oil Fund, USO
-2.18% Oil Fund PowerShares, DBO
-2.27% France Index, EWQ
-2.43% Turkey MSCI iS, TUR
-2.44% Semiconductor SPDR, XSD
-2.65% Netherlands Index, EWN
-2.73% India Earnings WTree, EPI
-3.43% Italy Index, EWI
-3.43% WilderHill Clean Energy PS, PBW
