Stocks: Big Price Drop Confirmed By High Volume

The following stock prices and indicators crossed below their 50-day SMAs on 7/31/14, thereby objectively demonstrating weakness:
S&P 500, S&P 100, Dow-Jones Averages (Industrial, Transportation, and Utility) , NYSE Advance-Decline Line, NYSE Up-Down Volume Line, SPDR Gold Shares ETF (GLD), Energy SPDR (XLE), Materials SPDR (XLB), Financial SPDR (XLF), and Consumer Discretionary SPDR (XLY).

The S&P 500 Composite Index (SPX: 1,930.67, down 2.00%) absolute price gapped down on the open and continued to fall most of the day into to a very weak close. SPX closed below the open, below midpoint of the day’s high-low range, and below both its lowest closing prices and lowest intraday lows in nearly 7 weeks.

NYSE total volume rose 22% to a level 28% above its 200-day SMA. Generally, rising volume confirms the direction (up or down) of a price move, but falling volume may indicate diminishing power behind a price trend, which can suggest a price reversal ahead.

The Number of Daily Net New Highs on the NYSE (New Highs minus New Lows), now at -28, has been running below its peaks above +800 recorded in 2012 and 2013, when the S&P 500 was lower than it is now. So, this indicator still is diverging bearishly relative to last year’s levels.

Momentum is a leading indicator of price change, and failing price momentum is often followed by a downside correction. Short-term momentum oscillators RSI and MACD based on the SPX broke down to their lowest levels in more than 3 months on 7/31/14 and remain relatively weak. Both turned down on 7/7/14, after failing to match their highs of 6/10/14–despite higher highs for the S&P 500 Index on which these oscillators are based. Furthermore, these same momentum oscillators consistently have remained below their highs of 2012 and 2013, despite much higher highs in the S&P 500 itself in 2014. Therefore, both oscillators have continued to demonstrate bearish divergence compared to the price of the underlying index, the S&P 500.

Stochastic (12,3,3) oscillator based on the S&P 500 fell to its lowest levels in more than 3 months on 7/31/14. Stochastic turned down from a peak of 91 on 7/7/14, which was below its June peak above 98 set on 6/4/14, for another example of bearish divergence.

Stock market sentiment indicators have been off the charts and into the danger zone for months, bearish momentum divergences have been accumulating, and there is a tendency for low trading volume on up days and rising trading volume on down days (generally, not always), suggesting distribution. These are challenges to a sustainable upside trend that the stock market has been ignoring for months–until now?
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Stock Market Indicators

The Dow Theory reconfirmed a Primary Tide Bull Market on 7/16/14 when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average rose to new all-time closing price highs.

NASDAQ 100 ETF/S&P 500 ETF Relative Strength Ratio (QQQ/SPY) rose above its highs of the previous 13 years on 7/30/14 and remains systematically bullish. The absolute price of QQQ rose to a 13-year closing price high on 7/23/14. The price 50-day SMA crossed above the 200-day SMA on 1/28/13, thereby turning systematically bullish (from neutral).

iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) rose to its highest level in 8 months on 7/28/14. BKF/SPY currently remains systematically neutral, but the 50-day SMA is now rising up toward the falling 200-day SMA, such that a bullish crossover is possible in days ahead.

Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) rose to its highest level in 9 weeks on 7/28/14. The EEM /SPY 50-day SMA crossed above the 200-day SMA on 7/29/13, thereby turning systematically bullish (from neutral).

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below its lows of the previous 11 years on 3/20/14, thereby reconfirming its preexisting major downtrend. EFA/SPY has underperformed since the ratio peaked on 11/27/2007.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) rose above its highs of the previous 6 months on 7/29/14, reconfirming a significant rally. Although OEF/SPY remains systematically neutral, with 50-day SMA still below the 200-day SMA, a shift in momentum appears to be at hand now. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative stability and safety of large size. On the other hand, 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.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below its lows of the previous 20 months on 7/28/14, thereby reconfirming its preexisting bearish trend. IWM/SPY 50-day SMA crossed below the 200-day SMA on 4/29/14, thereby turning systematically bearish (from neutral). Absolute price has turned weak since it peaked at 120.97 on 7/1/14.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below its lows of the previous 19 months on 7/29/14, thereby reconfirming its preexisting bearish trend. MDY/SPY 50-day SMA crossed below the 200-day SMA on 5/9/14, thereby turning systematically bearish (from neutral). Absolute price has turned weak since it peaked at 264 on 7/1/14.
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) absolute price rose above its highs of the previous 5 months on 7/30/14. UUP is currently systematically neutral, but the 50-day SMA is rising up toward the 200-day SMA, such that a bullish crossover may be possible in weeks ahead if price rises further. Support 21.07 and 20.84. Resistance 21.96, 22.34, 22.98, 23.14, 23.52, 25.84, 27.19, and 28.97.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) absolute price broke down below its lows of the previous 5 months on 7/11/14. DBA crossed below its 50-day SMA on 5/9/14, thereby turning systematically neutral (from bullish).

Crude Oil, United States Oil ETF (USO) absolute price has stayed systematically neutral most of the time since 7/9/14, when it crossed below its 50-day SMA. The 50-day SMA remains in a strong position, still rising above the 200-day SMA. Support 35.96, 35.63, 34.97, 34.00, 32.53, 32.12, 30.79, 29.02, 26.28, and 22.74. Resistance 36.58, 38.30, 39.54, 39.64, 40.29, 41.38, 42.30, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) absolute price appears to be base building since hitting a bottom at 114.46 on 12/31/13. GLD currently is systematically neutral, with the 50-day SMA above the 200-day SMA but with the price below both SMAs. Support: 119.42, 114.46, 113.08, and 102.28. Resistance: 133.69, 137.62, 143.43, 149.44, 153.85, 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) rose above its highs of the previous 11 months on 7/28/14 and remains systematically bullish. Absolute price rose above its highs of the previous 4 months on 7/9/14 and remains systematically bullish.

Silver, iShares Silver Trust ETF (SLV) absolute price fell below its lows of the previous 5 weeks on 7/24/14, possibly suggesting a minor pullback correction. SLV remains systematically neutral, with the 50-day SMA still below the 200-day SMA. Support 17.75, 16.73, 14.37, 12.27, 11.64, and 8.45. Resistance: 21.30, 22.23, 23.84, 25.34, 27.14, 27.35, 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 5 weeks on 7/24/14, possibly suggesting a minor pullback correction. The 50-200 SMA spread has been narrowing since 6/16/14, but SLV/GLD is still weeks away from a bullish 50>200 SMA crossover.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) remains systematically neutral, with the 50-day SMA still below the 200-day SMA. “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
2.31% , MYY , Short 100% MidCap 400, MYY
2.06% , PSQ , Short 100% QQQ, PSQ
2.36% , AMD , ADV MICRO DEV
3.11% , LRCX , LAM RESEARCH CORP
2.74% , ALL , ALLSTATE
1.35% , APA , APACHE
2.20% , SPLS , STAPLES
2.75% , NWL , NEWELL RUBBER
4.01% , QID , Short 200% QQQ PS, QID
0.56% , DBA , Agriculture DB PS, DBA
1.98% , SH , Short 100% S&P 500, SH
3.99% , SDS , Short 200% S&P 500 PS, SDS
1.62% , AVP , AVON
0.45% , SLM.O , SLM CORP
3.64% , DXD , Short 200% Dow 30 PS, DXD
0.95% , DRI , DARDEN REST
1.79% , DISCA , Discovery Communications
0.99% , CECO , CAREER EDUCATION CORP
0.32% , MCK , MCKESSON CORP
0.52% , UIS , UNISYS
1.03% , BRCM , BROADCOM STK A
1.48% , VLO , VALERO ENERGY
0.27% , ZEUS , Olympic Steel, ZEUS
0.18% , PST , 200% Short Bond 7-10 Yr T, PST
1.28% , CLF , CLIFFS NATURAL RESOURCES, CLF
0.23% , EXC , EXELON CORP
0.05% , SHY , Bond, 1-3 Year Treasury, SHY
0.22% , QLGC , QLOGIC
0.49% , TBT , 200% Short US T Bond, TBT
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Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-12.27% , LLL , L-3 COMMS HLDGS
-3.08% , PBW , WilderHill Clean Energy PS, PBW
-6.09% , MU.O , MICRON TECH
-1.93% , IWR , MidCap Russell, IWR
-6.12% , K , KELLOGG
-2.38% , EZU , EMU Europe Index, EZU
-7.20% , HP , Helmerich & Payne HP
-1.94% , PXE , Energy Exploration & Prod, PXE
-4.93% , YUM , YUM BRANDS
-2.02% , IWP , Growth MidCap Russell, IWP
-5.28% , S , SPRINT NEXTEL
-1.68% , IXP , Telecommunications Global, IXP
-1.98% , IXC , Energy Global, IXC
-6.10% , MTG , MGIC INVESTMENT
-3.67% , AGN , ALLERGAN
-1.69% , EWU , United Kingdom Index, EWU
-1.81% , IWS , Value MidCap Russell, IWS
-2.22% , IGE , Energy & Nat Res iS GS, IGE
-4.11% , WOR , WORTHINGTON INDS
-1.75% , SCZ , Small Cap EAFE MSCI iS, SCZ
-1.70% , ACWX , Global ex US ACWI iS, ACWX
-3.22% , PXJ , Oil & Gas, PXJ
-1.76% , EWO , Austria Index, EWO
-1.82% , IXN , Technology Global, IXN
-5.33% , NBR , NABORS
-4.06% , ADSK , AUTODESK
-5.63% , JNS , JANUS CAPITAL
-1.93% , EFG , Growth EAFE MSCI, EFG
-8.59% , ISIL , INTERSIL CORP
-2.12% , EWD , Sweden Index, EWD
-1.71% , EWL , Switzerland Index, EWL
-3.91% , BBRY , BlackBerry (BBRY)
-1.89% , ERIC.O , LM Ericsson Telephone Company
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.98% , Bear, Short S&P 500, SH
0.56% , Agriculture DB PS, DBA
0.13% , Bond, Muni S&P ATM-Free iS, MUB
0.05% , Bond, 1-3 Year Treasury, SHY
0.00% , Singapore Index, EWS
0.00% , Bond Treasury Short-Term iS, SHV
-0.03% , Bond, 10 Year Treasury, IEF
-0.03% , Bond, TIPS U.S. Treasury iS, TIP
-0.10% , Bond Ex-US Treas, BWX
-0.13% , Bond, Intermediate US Aggregate iS, AGG
-0.19% , Hong Kong Index, EWH
-0.28% , Bond, Long-Term Corp iBoxx iS, LQD
-0.30% , Bond, 20+ Years Treasury, TLT
-0.51% , Commodity Tracking, DBC
-0.59% , China 25 iS, FXI
-0.70% , Bond, Emerging Mkt JPM iS, EMB
-0.70% , Preferred Stock iS, PFF
-0.72% , Financial Preferred, PGF
-0.82% , Bond, High Yield Corp iBoxx iS, HYG
-0.96% , Pacific ex-Japan, EPP
-0.98% , Bond, High-Yield Junk, JNK
-1.01% , Silver Trust iS, SLV
-1.10% , Oil Fund PowerShares, DBO
-1.12% , South Africa Index, EZA
-1.15% , Gold Shares S.T., GLD
-1.19% , Malaysia Index, EWM
-1.21% , Dividend International, PID
-1.25% , Chile MSCI iS, ECH
-1.26% , Australia Index, EWA
-1.34% , Pacific VIPERs, VPL
-1.38% , Canada Index, EWC
-1.43% , Dividend High Yield Equity PS, PEY
-1.44% , Real Estate US DJ iS, IYR
-1.48% , Japan Index, EWJ
-1.49% , REIT VIPERs, VNQ
-1.49% , Realty Cohen & Steers, ICF
-1.53% , Value EAFE MSCI, EFV
-1.57% , Utilities SPDR, XLU
-1.59% , REIT Wilshire, RWR
-1.59% , Belgium Index, EWK
-1.61% , Turkey MSCI iS, TUR
-1.63% , Transportation Av DJ, IYT
-1.64% , Oil, Crude, U.S. Oil Fund, USO
-1.64% , Utilities VIPERs, VPU
-1.67% , Foreign LargeCap EAFE MSCI iS, EFA
-1.69% , United Kingdom Index, EWU
-1.70% , Global ex U.S. LargeCap Blend, ACWX
-1.71% , Switzerland Index, EWL
-1.71% , Consumer Staples SPDR, XLP
-1.72% , Dividend U.S. DJ iS, DVY
-1.75% , SmallCap Blend EAFE MSCI iS, SCZ
-1.75% , Emerging Markets MSCI iS, EEM
-1.75% , Emerging VIPERs, VWO
-1.76% , Russia MV, RSX
-1.76% , Austria Index, EWO
-1.79% , Value LargeCap Dynamic PS, PWV
-1.79% , Mexico Index, EWW
-1.81% , Value MidCap Russell, IWS
-1.85% , Consumer Discretionary SPDR, XLY
-1.85% , Global LargeCap Blend MSCI iS, ACWI
-1.85% , Emerging 50 BLDRS, ADRE
-1.87% , Homebuilders SPDR, XHB
-1.87% , South Korea Index, EWY
-1.88% , Value VIPERs, VTV
-1.88% , India Earnings WTree, EPI
-1.89% , Technology SPDR, XLK
-1.89% , Dividend SPDR, SDY
-1.89% , DIAMONDS (DJIA), DIA
-1.91% , Dividend ex-U.S. DJ iS, IDV
-1.91% , LargeCap Blend S&P=Weight R, RSP
-1.92% , Financials VIPERs, VFH
-1.93% , Growth EAFE MSCI, EFG
-1.93% , MidCap Russell, IWR
-1.94% , SmallCap Value Russell 2000 iS, IWN
-1.95% , Telecom DJ US, IYZ
-1.95% , MidCap Value S&P 400 iS, IJJ
-1.95% , Basic Materials DJ US, IYM
-1.95% , LargeCap Value Russell 1000 iS, IWD
-1.95% , Microcap Russell, IWC
-1.95% , Financial DJ US, IYF
-1.95% , Materials SPDR, XLB
-1.96% , LargeCap VIPERs, VV
-1.96% , Europe 350 S&P Index, IEV
-1.96% , LargeCap Value S&P 500 iS, IVE
-1.97% , European VIPERs, VGK
-1.97% , Global 100, IOO
-1.97% , S&P 500 SPDRs LargeCap Blend, SPY
-1.98% , Value SmallCap VIPERS, VBR
-1.98% , Energy Global, IXC
-1.99% , SmallCap Value S&P 600 iS, IJS
-1.99% , LargeCap Growth S&P 500 iS, IVW
-2.01% , Networking, IGN
-2.01% , LargeCap Blend S&P 100, OEF
-2.02% , LargeCap Blend S&P 500 iS, IVV
-2.02% , QQQ Nasdaq 100 Trust, QQQ
-2.02% , Industrial SPDR, XLI
-2.02% , Growth MidCap Russell, IWP
-2.03% , Semiconductor iS IGW, SOXX
-2.03% , Growth VIPERs, VUG
-2.03% , Blend Total Market VIPERs, VTI
-2.03% , Info Tech VIPERs, VGT
-2.03% , LargeCap Blend Russell 1000 iS, IWB
-2.04% , Metals & Mining SPDR, XME
-2.04% , Dividend Appreciation Vipers, VIG
-2.05% , Financial Services DJ, IYG
-2.05% , Financial SPDR, XLF
-2.05% , LargeCap Blend Russell 3000 iS, IWV
-2.06% , Health Care SPDR, XLV
-2.06% , LargeCap Growth Russell 1000 iS, IWF
-2.07% , MidCap Blend S&P 400 iS, IJH
-2.07% , MidCap S&P 400 SPDRs, MDY
-2.07% , Technology DJ US, IYW
-2.11% , Netherlands Index, EWN
-2.12% , Sweden Index, EWD
-2.14% , Latin Am 40, ILF
-2.16% , Energy SPDR, XLE
-2.17% , MidCap Growth S&P 400 iS, IJK
-2.17% , Frontier Markets Guggenheim , FRN
-2.19% , France Index, EWQ
-2.22% , Energy & Nat Res iS GS, IGE
-2.24% , India PS, PIN
-2.25% , SmallCap Blend S&P 600 iS, IJR
-2.26% , Small Cap VIPERs, VB
-2.28% , Thailand MSCI iS, THD
-2.28% , SmallCap Blend Russell 2000 iS, IWM
-2.32% , Growth SmallCap VIPERs, VBK
-2.38% , Germany Index, EWG
-2.38% , EMU Europe Index, EZU
-2.41% , Energy DJ, IYE
-2.42% , Energy VIPERs, VDE
-2.45% , Italy Index, EWI
-2.53% , SmallCap Growth S&P 600 iS, IJT
-2.57% , China LargeCap Growth G D H USX PS, PGJ
-2.60% , Taiwan Index, EWT
-2.67% , Capital Markets KWB ST, KCE
-2.79% , SmallCap Growth Russell 2000 iS, IWO
-2.84% , Brazil Index, EWZ
-2.90% , Water Resources, PHO
-3.03% , Indonesia MV, IDX
-3.04% , Semiconductor SPDR, XSD
-3.08% , WilderHill Clean Energy PS, PBW
-3.20% , Biotech SPDR, XBI
-3.22% , Spain Index, EWP
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The S&P 500 Composite Potential Resistance
1991.39, high of 7/24/2014
1952.87, 50-day SMA
1852.86, low of 7/10/2014

The S&P 500 Composite Potential Support
1925.78 , low of 6/12/2014
1859.79, low of 5/7/2014
1857.01, 200-day SMA
1850.61, low of 4/28/2014
1813.55, high of 11/29/2013
1737.92, low of 2/5/2014
1729.86, high of 9/19/2013
1711.57, high of 10/15/2013
1709.67, high of 8/2/2013
1703.85, high of 9/26/2013
1700.18, high of 8/8/2013
1698.78, high of 7/23/2013
1696.81, high of 8/13/2013
1696.55, high of 10/1/2013
1695.93, low of 10/15/2013
1687.18, high of 5/22/2013
1687.11, low of 9/27/2013
1676.03, low of 7/26/2013
1674.99, low of 9/30/2013
1672.40, high of 9/9/2013
1671.84, low of 7/16/2013
1670.36, low of 10/3/2013
1669.51, high of 8/26/2013
1654.19, high of 6/18/2013
1654.18, high of 7/9/2013
1652.61, low of 8/16/2013
1646.47, low of 10/9/2013
1629.05, low of 8/27/2013
1560.33, low of 6/24/2013
1536.03, low of 4/18/2013
1530.94, high of 2/19/2013
1485.01, low of 2/26/2013
1474.51, high of 9/14/2012
1451.64, low on 1/8/2013
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
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
1397.68, low of 11/26/2012
1396.56, low of 9/4/2012
1391.04, low of 8/6/2012
1388.71, low of 5/3/2012
1385.43, low of 11/28/2012
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1357.38, low of 4/10/2012
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
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
1244.80, low of 12/7/2011
1239.73, low of 12/1/2011
1234.81, low of 11/3/2011
1231.04, high of 12/16/2011
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
1074.77, low of 10/4/2011
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
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009