Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the previous 12 weeks.
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.
U.S. dollar ETF (UUP) rose above 3-months’ highs.
Emerging Markets Stocks ETF (EEM) and iShares MSCI BRIC Fund (BKF) Relative Strength Ratios (relative to SPY) both fell below 4-months’ lows, confirming medium-term downtrends. Absolute prices are also pointing down.
Friday’s stock price indexes opened higher and added further to early gains in the afternoon, thereby making back a normal fraction of their losses on Wednesday and Thursday. Volume on the NYSE fell 21%, however, calling into question the power of the price rebound.
The S&P 500 (SPX: 1,515.60) finished up 0.88%, the Nasdaq Composite Index rose 0.97%, the Dow Jones Industrial Average gained 0.86%, and the Dow Jones Transportation Average advanced 1.16%. Advances outnumbered Declines 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. On Friday, RSI recovered partially to 57.43. 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 Friday 2/22/13. 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 still indicates high degrees of optimism and bullish complacency, 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
1497.29, low of 2/21/2013
1495.02, low of 2/4/2013
1489.46, low of 1/24/2013
1475.52, 50-day SMA
1474.51, high of 9/14/2012
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
1408.62, 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 3 times. 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: 106.50, 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 5 weeks 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.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) rose above 3-months’ highs on 2/22/13. 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 2/22/13, 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 33.30, 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 12 weeks on 2/22/13. JJC remains systematically neutral, below the 50-day SMA and 200-day SMA. 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
12.28% , HPQ , HEWLETT PACKARD
0.85% , IYJ , Industrial LargeCap Blend DJ US, IYJ
1.91% , EWK , Belgium Index, EWK
0.93% , IWV , LargeCap Blend Russell 3000, IWV
2.87% , KMB , KIMBERLY CLARK
4.47% , TAP , ADOLPH COORS STK B, TAP
3.33% , DRI , DARDEN REST
4.44% , MRVL , MARVELL TECHNOLOGY
3.14% , AIG , AMER INTL GROUP
2.69% , IPG , INTERPUBLIC GRP
0.94% , IGE , Energy & Nat Res iS GS, IGE
0.70% , IYK , Consumer Non-Cyclical, IYK
1.78% , PBW , WilderHill Clean Energy PS, PBW
0.64% , LMT , LOCKHEED MARTIN
2.41% , INTU , INTUIT
1.22% , PPL , PPL
3.15% , NYT , NY TIMES STK A
2.09% , DOV , DOVER
1.93% , EWA , Australia Index, EWA
3.57% , XRX , XEROX
0.91% , IXN , Technology Global, IXN
1.32% , PEG , PUBL SVC ENTER
0.30% , NEE , NextEra Energy Resources LLC
1.99% , CHD , Church & Dwight
2.15% , KO , COCA COLA
1.88% , ED , CON ED
0.95% , VOX , Telecom Services VIPERs, VOX
1.39% , MPEL , Melco Crown Entertainment, MPEL
5.78% , ODP , OFFICE DEPOT
1.96% , STT , STATE STREET
0.94% , IWW , Value LargeCap Russell 3000, IWW
0.90% , IWD , Value 1000 Russell, IWD
1.00% , ICF , Realty Cohen & Steers, ICF
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-3.77% , LO , Lorillard, Inc. LO
-2.81% , HUM , HUMANA
-1.28% , WPO , Washington Post
-2.06% , TUR , Turkey MSCI iS, TUR
-1.39% , UNH , UNITEDHEALTH GRP
-1.27% , MBI , MBIA
-2.42% , JNY , JONES APPAREL
-2.24% , MZZ , Short 200% MidCap 400 PS, MZZ
-0.97% , JWN , NORDSTROM
-0.17% , LH , LAB CRP OF AMER
-0.86% , EWH , Hong Kong Index, EWH
-0.75% , BCR , C R BARD
-0.91% , RHT , Red Hat Inc.
-1.14% , ESRX , EXPRESS SCRIPTS
-0.23% , ITW , ILLINOIS TOOL
-0.15% , SPLS , STAPLES
-0.06% , VMC , VULCAN MATERIALS
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
3.01% Spain Index, EWP
2.45% France Index, EWQ
2.13% Italy Index, EWI
2.10% Semiconductor iS IGW, SOXX
1.98% Austria Index, EWO
1.93% Australia Index, EWA
1.91% Belgium Index, EWK
1.88% EMU Europe Index, EZU
1.83% Sweden Index, EWD
1.78% WilderHill Clean Energy PS, PBW
1.68% Netherlands Index, EWN
1.63% India PS, PIN
1.62% Dividend ex-U.S. DJ iS, IDV
1.60% Japan Index, EWJ
1.60% Capital Markets KWB ST, KCE
1.55% India Earnings WTree, EPI
1.52% Europe 350 S&P Index, IEV
1.50% Semiconductor SPDR, XSD
1.49% European VIPERs, VGK
1.46% Telecom DJ US, IYZ
1.44% Foreign LargeCap EAFE MSCI iS, EFA
1.41% SmallCap Blend EAFE MSCI iS, SCZ
1.40% Biotech SPDR, XBI
1.35% Growth EAFE MSCI, EFG
1.33% Materials SPDR, XLB
1.32% Value EAFE MSCI, EFV
1.31% Technology DJ US, IYW
1.27% SmallCap Growth Russell 2000 iS, IWO
1.27% Homebuilders SPDR, XHB
1.26% Financial SPDR, XLF
1.25% Pacific ex-Japan, EPP
1.24% MidCap S&P 400 SPDRs, MDY
1.23% Technology SPDR, XLK
1.22% Pacific VIPERs, VPL
1.21% Financial DJ US, IYF
1.20% SmallCap Blend Russell 2000 iS, IWM
1.18% Transportation Av DJ, IYT
1.17% Basic Materials DJ US, IYM
1.16% Info Tech VIPERs, VGT
1.15% Networking, IGN
1.15% Financials VIPERs, VFH
1.14% Growth SmallCap VIPERs, VBK
1.13% Financial Services DJ, IYG
1.13% Water Resources, PHO
1.12% SmallCap Growth S&P 600 iS, IJT
1.11% Global ex U.S. LargeCap Blend, ACWX
1.11% China LargeCap Growth G D H USX PS, PGJ
1.10% Energy Global, IXC
1.09% SmallCap Value Russell 2000 iS, IWN
1.09% Global 100, IOO
1.07% Value SmallCap VIPERS, VBR
1.07% Emerging 50 BLDRS, ADRE
1.07% Growth MidCap Russell, IWP
1.07% MidCap Russell, IWR
1.06% Energy VIPERs, VDE
1.05% Brazil Index, EWZ
1.05% Energy SPDR, XLE
1.05% Value MidCap Russell, IWS
1.05% MidCap Growth S&P 400 iS, IJK
1.04% Utilities VIPERs, VPU
1.03% Small Cap VIPERs, VB
1.03% Value LargeCap Dynamic PS, PWV
1.02% MidCap Blend S&P 400 iS, IJH
1.01% SmallCap Blend S&P 600 iS, IJR
1.01% QQQ Nasdaq 100 Trust, QQQ
1.01% Utilities SPDR, XLU
1.00% REIT VIPERs, VNQ
1.00% Realty Cohen & Steers, ICF
0.99% Dividend High Yield Equity PS, PEY
0.99% LargeCap Blend S&P=Weight R, RSP
0.98% Growth VIPERs, VUG
0.98% Germany Index, EWG
0.98% S&P 500 SPDRs LargeCap Blend, SPY
0.97% LargeCap Value S&P 500 iS, IVE
0.97% Global LargeCap Blend MSCI iS, ACWI
0.97% Blend Total Market VIPERs, VTI
0.96% Microcap Russell, IWC
0.96% LargeCap Blend S&P 500 iS, IVV
0.95% Energy DJ, IYE
0.95% REIT Wilshire, RWR
0.94% Switzerland Index, EWL
0.94% Dividend SPDR, SDY
0.94% DIAMONDS (DJIA), DIA
0.94% Energy & Nat Res iS GS, IGE
0.93% LargeCap VIPERs, VV
0.93% LargeCap Blend Russell 3000 iS, IWV
0.92% LargeCap Growth Russell 1000 iS, IWF
0.91% LargeCap Growth S&P 500 iS, IVW
0.90% LargeCap Value Russell 1000 iS, IWD
0.89% United Kingdom Index, EWU
0.89% MidCap Value S&P 400 iS, IJJ
0.88% LargeCap Blend Russell 1000 iS, IWB
0.87% SmallCap Value S&P 600 iS, IJS
0.86% Real Estate US DJ iS, IYR
0.86% Value VIPERs, VTV
0.85% LargeCap Blend S&P 100, OEF
0.85% Malaysia Index, EWM
0.83% Latin Am 40, ILF
0.83% Dividend U.S. DJ iS, DVY
0.81% South Korea Index, EWY
0.81% Dividend Appreciation Vipers, VIG
0.79% Industrial SPDR, XLI
0.75% Thailand MSCI iS, THD
0.69% South Africa Index, EZA
0.67% Dividend International, PID
0.66% Indonesia MV, IDX
0.66% Singapore Index, EWS
0.62% Russia MV, RSX
0.61% Oil Fund PowerShares, DBO
0.58% Consumer Staples SPDR, XLP
0.56% Consumer Discretionary SPDR, XLY
0.52% Taiwan Index, EWT
0.51% Oil, Crude, U.S. Oil Fund, USO
0.46% Chile MSCI iS, ECH
0.44% Emerging Markets MSCI iS, EEM
0.44% Health Care SPDR, XLV
0.39% Emerging VIPERs, VWO
0.36% Silver Trust iS, SLV
0.35% Mexico Index, EWW
0.31% Frontier Markets Guggenheim , FRN
0.25% Canada Index, EWC
0.25% Bond, High Yield Corp iBoxx iS, HYG
0.23% Gold Shares S.T., GLD
0.22% Bond, TIPS U.S. Treasury iS, TIP
0.19% Agriculture DB PS, DBA
0.12% Bond, High-Yield Junk, JNK
0.12% Bond, 10 Year Treasury, IEF
0.08% China 25 iS, FXI
0.07% Preferred Stock iS, PFF
0.07% Bond, 20+ Years Treasury, TLT
0.07% Bond, Long-Term Corp iBoxx iS, LQD
0.05% Bond, Intermediate US Aggregate iS, AGG
0.05% Financial Preferred, PGF
0.02% Metals & Mining SPDR, XME
0.00% Bond Treasury Short-Term iS, SHV
0.00% Commodity Tracking, DBC
0.00% Bond, 1-3 Year Treasury, SHY
0.00% Bond Ex-US Treas, BWX
-0.03% Bond, Muni S&P ATM-Free iS, MUB
-0.12% Bond, Emerg Mkt JPM iS, EMB
-0.86% Hong Kong Index, EWH
-1.03% Bear, Short S&P 500, SH
-2.06% Turkey MSCI iS, TUR
