Materials stock sector Relative Strength Ratio (XLB/SPY) fell below its lows of the previous 6-months on 3/26/13.
Industrial stock sector Relative Strength Ratio (XLI/SPY) fell below its lows of the previous 13 weeks on 3/26/13.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below the lows of the previous 4 years on 3/26/13, again suggesting a major downtrend.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below the lows of the previous 4 months on 3/26/13, again confirming a medium-term downtrend.
The S&P 500 (SPX: 1,563.77) rose 0.78%, Nasdaq Composite Index advanced 0.53%, the Dow Jones Industrial Average gained 0.77%, and the Dow Jones Transportation Average rose 0.77%. Breadth was posative, with 2780 Advances and 1190 Declines. Volume on the NYSE fell 11% to a level 11% below its 200-day SMA.
The S&P 500 appears to have stalled out since 3/14/13 after encountering technical resistance just below 1,565.15, which was its highest close set on 10/9/2007. By remaining below that old top, the S&P 500 shows a non-confirmation and bearish divergence compared to the Dow-Jones Industrial and Transportation Averages, both of which exceeded their old highs this month.
Daily price momentum oscillators have been diverging bearishly while price indexes rose to new highs in recent weeks. Momentum oscillators have remained below their 2011-2012 highs and below their highs of late January. For example, RSI(14) based on the S&P 500 Index, now at 62.25, peaked at 74.46 on 1/29/13. MACD(12,26,9), now at 12.24, peaked at 17.88 on 1/29/13. Bearishly diverging momentum is a problem because momentum is a leading indicator of price.
The Art of Contrary Thinking has been calling for questioning overwhelming bullish sentiment. Objective investor sentiment data clearly have demonstrated extremely high degrees of optimism and bullish complacency, matching or exceeding extremes at past market price tops. 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
1565.15, highest close on 10/9/2007
1564.91, high of 3/25/2013
The S&P 500 Composite Potential Support
1538.57, low of 3/19/2013
1519.89, 50-day SMA
1485.01, low of 2/26/2013
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
1432.64, 200-day SMA
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 rose back up above its 50-day SMA on 3/22/13, thereby turning systematically neutral again. Various technical oscillators, such as RSI and MACD, show losses of downside momentum and bullish divergences since 2/1/13. Support 114.62, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance: 119.67, 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 whipsawed back up above its 50-day SMA on 3/18/13, thereby turning systematically neutral again. IEF formed a technical base after hitting an “oversold” low at 105.56 on 2/1/13 and successfully testing that low 3 times. Various technical oscillators, such as RSI and MACD, show losses of downside momentum and bullish divergences since 2/1/13. Support 105.56, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance: 107.38, 108.07, 108.15, 109.20, 109.32, and 109.89.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) whipsawed back up above its 50-day SMA on 3/5/13, thereby turning systematically bullish again. JNK/LQD has been neutral for most of the past 3 years, and it seems questionable whether this long-term trend is changing in any sustainable way.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) whipsawed back down below its 50-day SMA on 3/18/13, thereby turning systematically neutral again. Longer term, TIP/IEF has been neutral for most of the past 3 years. Absolute price of TIP peaked at 123.44 on 12/6/12 and remains systematically neutral.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price rose above its highs of the past 6-months on 3/13/13, after closing above its 200-day SMA on 2/21/13. UUP turned systematically neutral on 2/7/13, when it rose above its 50-day SMA. Longer term, UUP has been consolidating secular trend losses since bottoming at 20.84 on 5/4/11. Support 22.35, 22.15, 21.53, 21.07, and 20.84. Resistance 22.64, 22.78, 22.96, 23.14, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA)price fell below its lows of the previous 7 months on 3/6/13, again confirming its major bearish trend. 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 2/21/13 and remains neutral. Longer term, USO has been mostly bearish since peaking at 119.17 on 7/11/08. Support 32.87, 32.16, 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 its lows of the previous 8 months on 2/20/13 and appears to be consolidating losses in more recent weeks. Price turned systematically bearish on 2/22/13, when the 50-day SMA fell below the 200-day SMA. Longer term, GLD has been mostly bearish since peaking at 185.85 on 9/6/11. Support: 150.84, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 156.80, 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 again on 12/27/12, when the 50-day SMA crossed below the 200-day SMA. Longer term, GDX/GLD has remained mostly bearish for more than 6 years, since 9/5/06.
Silver, iShares Silver Trust ETF (SLV) price fell below its lows of the previous 6 months on 2/20/13 and appears to be consolidating losses in more recent weeks. Price turned systematically bearish on 3/1/13, when the 50-day SMA fell below the 200-day SMA. Longer term, SLV has been mostly bearish since peaking at 48.35 on 4/28/11. Support 27.35, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 28.50, 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 its lows of the previous 6 months on 3/22/13, again confirming a medium-term downtrend. SLV/GLD remains neutral below both its 50-day SMA and its 200-day SMA.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC)fell below its lows of the previous 7 months on 3/19/13, again confirming a medium-term downtrend. 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, so price weakness of Copper implies a weak economic outlook.
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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
5.43% , NFLX , Netflix, NFLX
6.92% , RFMD , RF Micro Devices Inc
3.85% , MAR , MARRIOTT INTL STK A
4.30% , WOR , WORTHINGTON INDS
0.86% , AM , AMER GREETINGS STK A
0.85% , IGE , Energy & Nat Res iS GS, IGE
4.15% , AVP , AVON
0.40% , VIS , Industrials VIPERs, VIS
0.44% , EPU , Peru MSCI iS, EPU
1.01% , ECH , Chile MSCI iS, ECH
1.02% , PWB , Lg Cap Growth PSD, PWB
4.02% , EOG , EOG RESOURCES
0.80% , IWZ , Growth LargeCap Russell 3000, IWZ
1.77% , ZMH , ZIMMER HLDGS
1.29% , EWT , Taiwan Index, EWT
4.42% , MON , MONSANTO
1.66% , EZA , South Africa Index, EZA
2.99% , LBTYA , Liberty Global Inc. (LBTYA)
1.88% , AFL , AFLAC
1.26% , GPC , GENUINE PARTS
0.97% , RPG , Growth S&P 500, RPG
1.40% , NOV , NATIONAL OILWELL VARC0
0.79% , EWL , Switzerland Index, EWL
1.52% , BEN , FRANKLIN RSC
0.69% , FPX , IPOs, First Tr IPOX-100, FPX
1.21% , PXJ , Oil & Gas, PXJ
2.62% , KSU , Kansas City Southern, KSU
2.92% , PLD , PROLOGIS TRUST
1.61% , CPB , CAMPBELL SOUP
0.39% , VOX , Telecom Services VIPERs, VOX
2.03% , NOC , NORTHROP GRUMMAN
0.86% , ICF , Realty Cohen & Steers, ICF
0.73% , IYF , Financial DJ US, IYF
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.10% , IGN , Networking, IGN
-2.57% , STJ , ST JUDE MEDICAL
-2.67% , GPS , GAP
-3.37% , PWER , POWER ONE
-0.22% , EPI , India Earnings WTree, EPI
-0.47% , EIX , EDISON INTL
-0.61% , EMR , EMERSON ELECTRIC
-0.44% , PMTC.O , PARAMETRIC
-0.77% , PH , PARKER HANNIFIN
-0.45% , GRMN , GARMIN LTD
-0.39% , ROK , ROCKWELL AUTOMAT
-0.45% , FLEX , Flextronics International Ltd
-0.31% , APA , APACHE
-0.22% , MTB , M&T BANK
-0.20% , ACE , ACE
-0.10% , RIG , TRANSOCEAN
-0.06% , SYY , SYSCO
-0.02% , SPG , SIMON PROP GRP
-0.03% , PDCO , Patterson Dental Company
-0.02% , CVS , CVS
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
3.24% , Indonesia MV, IDX
2.42% , Thailand MSCI iS, THD
2.10% , Turkey MSCI iS, TUR
1.90% , Oil Fund PowerShares, DBO
1.79% , Mexico Index, EWW
1.77% , Oil, Crude, U.S. Oil Fund, USO
1.66% , South Africa Index, EZA
1.66% , South Korea Index, EWY
1.65% , Hong Kong Index, EWH
1.65% , Malaysia Index, EWM
1.46% , Singapore Index, EWS
1.43% , Emerging Markets MSCI iS, EEM
1.34% , Latin Am 40, ILF
1.33% , China 25 iS, FXI
1.29% , Taiwan Index, EWT
1.16% , Health Care SPDR, XLV
1.15% , Emerging VIPERs, VWO
1.14% , Energy DJ, IYE
1.10% , Energy VIPERs, VDE
1.06% , Energy SPDR, XLE
1.02% , Semiconductor SPDR, XSD
1.02% , Utilities VIPERs, VPU
1.01% , Chile MSCI iS, ECH
0.96% , Energy Global, IXC
0.95% , Utilities SPDR, XLU
0.94% , Consumer Staples SPDR, XLP
0.92% , Emerging 50 BLDRS, ADRE
0.92% , Commodity Tracking, DBC
0.89% , Japan Index, EWJ
0.88% , Dividend SPDR, SDY
0.86% , Dividend U.S. DJ iS, DVY
0.86% , REIT VIPERs, VNQ
0.86% , Realty Cohen & Steers, ICF
0.85% , Energy & Nat Res iS GS, IGE
0.85% , LargeCap Growth S&P 500 iS, IVW
0.83% , REIT Wilshire, RWR
0.83% , SmallCap Blend EAFE MSCI iS, SCZ
0.82% , France Index, EWQ
0.82% , Dividend Appreciation Vipers, VIG
0.80% , LargeCap Blend S&P 100, OEF
0.80% , Pacific VIPERs, VPL
0.80% , S&P 500 SPDRs LargeCap Blend, SPY
0.79% , Switzerland Index, EWL
0.79% , Value VIPERs, VTV
0.77% , Semiconductor iS IGW, SOXX
0.77% , Transportation Av DJ, IYT
0.77% , Dividend High Yield Equity PS, PEY
0.76% , LargeCap Blend Russell 1000 iS, IWB
0.76% , LargeCap Blend S&P 500 iS, IVV
0.75% , Blend Total Market VIPERs, VTI
0.75% , LargeCap VIPERs, VV
0.74% , Canada Index, EWC
0.74% , Real Estate US DJ iS, IYR
0.74% , DIAMONDS (DJIA), DIA
0.74% , Value LargeCap Dynamic PS, PWV
0.73% , Pacific ex-Japan, EPP
0.73% , LargeCap Blend S&P=Weight R, RSP
0.73% , Financial DJ US, IYF
0.72% , LargeCap Value S&P 500 iS, IVE
0.72% , MidCap Russell, IWR
0.71% , Frontier Markets Guggenheim , FRN
0.70% , Growth VIPERs, VUG
0.70% , LargeCap Value Russell 1000 iS, IWD
0.70% , Materials SPDR, XLB
0.68% , Sweden Index, EWD
0.68% , Global ex U.S. LargeCap Blend, ACWX
0.68% , LargeCap Growth Russell 1000 iS, IWF
0.67% , LargeCap Blend Russell 3000 iS, IWV
0.67% , MidCap S&P 400 SPDRs, MDY
0.66% , Global LargeCap Blend MSCI iS, ACWI
0.65% , Growth MidCap Russell, IWP
0.64% , Global 100, IOO
0.64% , Info Tech VIPERs, VGT
0.63% , Financial SPDR, XLF
0.63% , Technology SPDR, XLK
0.63% , MidCap Blend S&P 400 iS, IJH
0.62% , Financials VIPERs, VFH
0.62% , Foreign LargeCap EAFE MSCI iS, EFA
0.62% , Financial Services DJ, IYG
0.62% , MidCap Growth S&P 400 iS, IJK
0.61% , MidCap Value S&P 400 iS, IJJ
0.61% , Growth EAFE MSCI, EFG
0.60% , Value MidCap Russell, IWS
0.60% , Brazil Index, EWZ
0.58% , China LargeCap Growth G D H USX PS, PGJ
0.57% , Capital Markets KWB ST, KCE
0.54% , QQQ Nasdaq 100 Trust, QQQ
0.52% , Technology DJ US, IYW
0.51% , Industrial SPDR, XLI
0.50% , Value EAFE MSCI, EFV
0.50% , Consumer Discretionary SPDR, XLY
0.49% , European VIPERs, VGK
0.48% , Europe 350 S&P Index, IEV
0.48% , Value SmallCap VIPERS, VBR
0.46% , Small Cap VIPERs, VB
0.46% , SmallCap Growth S&P 600 iS, IJT
0.44% , United Kingdom Index, EWU
0.42% , Growth SmallCap VIPERs, VBK
0.41% , Australia Index, EWA
0.38% , SmallCap Value S&P 600 iS, IJS
0.36% , SmallCap Growth Russell 2000 iS, IWO
0.35% , Belgium Index, EWK
0.33% , Telecom DJ US, IYZ
0.33% , Dividend International, PID
0.32% , SmallCap Blend Russell 2000 iS, IWM
0.31% , SmallCap Blend S&P 600 iS, IJR
0.31% , SmallCap Value Russell 2000 iS, IWN
0.28% , Germany Index, EWG
0.27% , Agriculture DB PS, DBA
0.23% , Homebuilders SPDR, XHB
0.20% , Basic Materials DJ US, IYM
0.20% , Metals & Mining SPDR, XME
0.18% , Bond, High Yield Corp iBoxx iS, HYG
0.15% , Bond, High-Yield Junk, JNK
0.15% , Dividend ex-U.S. DJ iS, IDV
0.13% , Water Resources, PHO
0.12% , Bond, 20+ Years Treasury, TLT
0.12% , Bond, Intermediate US Aggregate iS, AGG
0.12% , Austria Index, EWO
0.11% , Bond, Emerging Mkt JPM iS, EMB
0.10% , Bond, 10 Year Treasury, IEF
0.07% , Bond, Long-Term Corp iBoxx iS, LQD
0.06% , Bond, TIPS U.S. Treasury iS, TIP
0.05% , Netherlands Index, EWN
0.03% , EMU Europe Index, EZU
0.02% , Preferred Stock iS, PFF
0.01% , Bond, 1-3 Year Treasury, SHY
0.01% , Bond, Muni S&P ATM-Free iS, MUB
0.00% , Russia MV, RSX
0.00% , Financial Preferred, PGF
0.00% , Bond Treasury Short-Term iS, SHV
-0.04% , WilderHill Clean Energy PS, PBW
-0.06% , India PS, PIN
-0.10% , Networking, IGN
-0.14% , Bond Ex-US Treas, BWX
-0.20% , Microcap Russell, IWC
-0.22% , India Earnings WTree, EPI
-0.32% , Silver Trust iS, SLV
-0.33% , Biotech SPDR, XBI
-0.34% , Gold Shares S.T., GLD
-0.77% , Bear, Short S&P 500, SH
-0.83% , Italy Index, EWI
-1.08% , Spain Index, EWP
