Foreign Stocks Losing Strength, U.S. Bond Gaining Strength

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) broke down below its lows of the previous 2 years on 8/28/14.

Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) absolute price rose above its highs of the previous 15 months on 8/28/14, thereby reconfirming its preexisting bullish trend.

The S&P 500 Composite Index (SPX: 1,996.74, down 0.17%) absolute price opened lower on a gap down below the lows of the previous 2 trading days. SPX bottomed out after the first 15 minutes, recovered all of its early loss by 12:47 pm ET, then traded choppy for the rest of the day. SPX closed above both the (true) open and the midpoint of the day’s high-low range. Given the weak open, it was a resilient performance.

NYSE total volume fell 1% to a level 29% below 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. Volume can provide insights that are not available from the majority of indicators, which are based on price.

Although price momentum turned upward on Friday 8/8/14, it is not even close to reversing months-long bearish divergences. On 8/25/14, short-term momentum oscillators RSI and MACD failed to rise above their 2014 highs to confirm the new high for the S&P 500 Index on which these oscillators are based. On 8/7/14, RSI and MACD broke down to their lowest levels in more than 6 months, thereby confirming their preexisting downtrends. RSI and MACD turned down on 7/7/14, after failing to rise to their highs of 6/10/14–despite higher highs for the S&P 500. 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, for many months both oscillators have continued to demonstrate bearish divergence compared to the price of the underlying index, the S&P 500.

The Number of Daily Net New Highs on the NYSE (New Highs minus New Lows), now at +206, 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.

Stock market sentiment indicators have been at excessive, multiyear high levels of bullishness (which is bearish), 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.
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Stock Market Indicators

The Dow Theory entered a Secondary Reaction to the downside in early August, as the Dow-Jones Industrial Average made lower highs and lower lows for more than 3 weeks. Such a downside correction can last several months. The price bounce that started on 8/8/14 is only a Minor Ripple to the upside, and such short-term price moves are ignored as insignificant noise, according to the Dow Theory.

NASDAQ 100 ETF/S&P 500 ETF Relative Strength Ratio (QQQ/SPY) rose above its highs of the previous 13 years on 8/25/14 and remains systematically bullish. The absolute price of QQQ rose above its highs of the previous 13 years 8/19/14 and remains systematically bullish.

iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) rose to its highest level in 9 months on 8/19/14, thereby reconfirming its preexisting uptrend. This RS ratio’s rising 50-day SMA crossed above the falling 200-day SMA on 8/1/14, thereby turning systematically bullish (from neutral).

Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) has been systematically neutral most of the time since making a low on 3/13/14.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) broke down below its lows of the previous 2 years on 8/28/14. EFA/SPY has remained systematically bearish most of the time over the past 6 years.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) has remained systematically neutral most of the time since bottoming on 2/25/14. 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 been 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 been in a corrective mode since it peaked at 264 on 7/1/14.
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) absolute price broke out above a 4-year downtrend line and rose to its highest level in 11 months on 8/25/14, thereby reconfirming its preexisting uptrend. The rising 50-day SMA crossed above the rising 200-day SMA on 8/20/14, thereby turning systematically bullish (from neutral). Support 21.66, 21.07, and 20.84. Resistance 21.97, 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 6 months on 8/20/14, thereby reconfirming a significant downtrend. DBA crossed below its 50-day SMA on 5/9/14, thereby turning systematically neutral (from bullish). DBA appears to be heading for a systematically bearish signal in days ahead.

Crude Oil, United States Oil ETF (USO) absolute price fell to its lowest price level in 6 months on 8/19/14, thereby reconfirming its preexisting medium-term downtrend. Price remains systematically neutral. Long term, USO has been in a neutral/sideways trend since bottoming at 22.74 on 2/19/09. Support 34.00, 32.68, 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 fell below its lows of the previous 2 months on 8/21/14, thereby signaling a medium-term downtrend. Longer term, GLD appears to be base building in neutral trading range since hitting a bottom at 114.46 on 12/31/13. GLD price has been crisscrossing its 50-day and 200-day SMAs this year, resulting in misleading signals, typical of a range-bound market. Support: 119.42, 114.46, 113.08, and 102.28. Resistance: 129.21, 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) broke down below its low of the previous 5 weeks and broke down below its 50-day SMA on 8/25/14, thereby turning systematically neutral from bullish. Absolute price is also systematically neutral.

Silver, iShares Silver Trust ETF (SLV) absolute price fell below its lows of the previous 10 weeks on 8/22/14, reconfirming a medium-term downtrend that started on 7/10/14. Longer term, SLV could be attempting to form a base, or bottom, since bottoming at 17.75 on 4/27/13. Support 17.75, 16.73, 14.37, 12.27, 11.64, and 8.45. Resistance: 20.64, 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 12 weeks on 8/19/14, reconfirming a medium-term downtrend. The trend of SLV/GLD has pointed down most of the time since it peaked on 4/28/11, and Silver continues to underperform Gold.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price has been in a medium-term downtrend since it peaked at 41.18 on 7/3/14. Long term, JJC has been in a major downtrend since topping 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
31.19% , RSH , RADIOSHACK
3.36% , PLL , PALL
2.06% , ISIL , INTERSIL CORP
0.56% , QLGC , QLOGIC
0.18% , MYY , Short 100% MidCap 400, MYY
0.70% , HD , HOME DEPOT
0.44% , SIL , Silver Miners Global X, SIL
1.07% , TDC , Teradata Corporation, TDC
0.23% , TLH , Bond 10-20 Year US Treas, TLH
1.33% , CMS , CMS ENERGY
0.62% , AMGN , AMGEN
0.34% , TYC , TYCO INTL
0.09% , SH , Short 100% S&P 500, SH
0.58% , FHN , First Horizon National
0.26% , APD , AIR PRODS & CHEM
0.05% , PEJ , Leisure & Entertainment, PEJ
1.08% , DPS , Dr Pepper Snapple Group
0.80% , ALTR , ALTERA
1.30% , EMN , EASTMAN CHEM
0.19% , EPU , Peru MSCI iS, EPU
0.41% , WLP , WELLPOINT HEALTH
0.12% , AAPL , APPLE COMPUTER
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Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-6.05% , CLF , CLIFFS NATURAL RESOURCES, CLF
-3.11% , RSX , Russia MV, RSX
-0.97% , NCR , NCR
-1.13% , ECH , Chile MSCI iS, ECH
-3.79% , X , US STEEL CORP
-0.56% , ERIC.O , LM Ericsson Telephone Company
-1.88% , CS , Credit Suisse Group, CS
-0.77% , BIDU , Baidu, Inc., BIDU
-0.52% , IYG , Financial Services DJ, IYG
-0.09% , IYM , Basic Materials DJ US, IYM
-1.08% , HOLX , Hologic, Inc., HOLX
-0.83% , FDX , FEDEX
-1.58% , BIG , BIG LOTS
-0.28% , EWN , Netherlands Index, EWN
-0.83% , HRB , H&R BLOCK
-0.74% , ADRE , Emerging 50 BLDRS, ADRE
-1.37% , LMT , LOCKHEED MARTIN
-0.71% , ILF , Latin Am 40, ILF
-0.58% , BF.B , BROWN FORMAN STK B
-0.75% , FLR , FLUOR
-0.77% , FCX , FREEPRT MCMORAN STK B
-0.69% , RHT , Red Hat Inc.
-1.11% , TBT , 200% Short US T Bond, TBT
-0.34% , BBBY , BED BATH BEYOND
-1.19% , EWD , Sweden Index, EWD
-0.77% , SCZ , Small Cap EAFE MSCI iS, SCZ
-0.08% , VIG , Dividend Appreciation Vipers, VIG
-0.21% , IJJ , Value MidCap S&P 400 B, IJJ
-0.47% , CINF , CINCINNATI FIN
-0.12% , RTN , RAYTHEON
-0.03% , EWY , South Korea Index, EWY
-0.03% , BLL , BALL
-0.01% , VNQ , REIT VIPERs, VNQ
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
0.83% , Oil, Crude, U.S. Oil Fund, USO
0.80% , Agriculture DB PS, DBA
0.73% , Utilities SPDR, XLU
0.68% , Semiconductor SPDR, XSD
0.64% , Utilities VIPERs, VPU
0.55% , Gold Shares S.T., GLD
0.52% , Bond, 20+ Years Treasury, TLT
0.43% , Silver Trust iS, SLV
0.39% , Oil Fund PowerShares, DBO
0.32% , Semiconductor iS IGW, SOXX
0.22% , Bond, Long-Term Corp iBoxx iS, LQD
0.20% , Bond, Intermediate US Aggregate iS, AGG
0.16% , Bond, TIPS U.S. Treasury iS, TIP
0.15% , Bond Ex-US Treas, BWX
0.13% , Bond, 10 Year Treasury, IEF
0.09% , Bond, Muni S&P ATM-Free iS, MUB
0.09% , Bear, Short S&P 500, SH
0.08% , Commodity Tracking, DBC
0.08% , Materials SPDR, XLB
0.08% , Water Resources, PHO
0.07% , Australia Index, EWA
0.05% , Financial Preferred, PGF
0.05% , Dividend U.S. DJ iS, DVY
0.05% , Preferred Stock iS, PFF
0.04% , Consumer Staples SPDR, XLP
0.04% , Energy DJ, IYE
0.03% , Realty Cohen & Steers, ICF
0.02% , Bond, 1-3 Year Treasury, SHY
0.02% , Energy SPDR, XLE
0.02% , MidCap Russell, IWR
0.00% , Value MidCap Russell, IWS
0.00% , Energy & Nat Res iS GS, IGE
0.00% , Bond Treasury Short-Term iS, SHV
-0.01% , Energy VIPERs, VDE
-0.01% , Growth MidCap Russell, IWP
-0.01% , REIT VIPERs, VNQ
-0.01% , Dividend SPDR, SDY
-0.02% , Bond, High-Yield Junk, JNK
-0.03% , South Korea Index, EWY
-0.03% , Health Care SPDR, XLV
-0.03% , Telecom DJ US, IYZ
-0.04% , LargeCap Blend S&P=Weight R, RSP
-0.05% , Turkey MSCI iS, TUR
-0.05% , S&P 500 SPDRs LargeCap Blend, SPY
-0.06% , Frontier Markets Guggenheim , FRN
-0.06% , Canada Index, EWC
-0.06% , LargeCap Growth Russell 1000 iS, IWF
-0.07% , LargeCap Value S&P 500 iS, IVE
-0.07% , REIT Wilshire, RWR
-0.08% , LargeCap VIPERs, VV
-0.08% , Dividend Appreciation Vipers, VIG
-0.08% , LargeCap Value Russell 1000 iS, IWD
-0.08% , Value VIPERs, VTV
-0.09% , Networking, IGN
-0.09% , LargeCap Blend Russell 1000 iS, IWB
-0.09% , Basic Materials DJ US, IYM
-0.09% , LargeCap Blend S&P 500 iS, IVV
-0.09% , Real Estate US DJ iS, IYR
-0.10% , Value LargeCap Dynamic PS, PWV
-0.10% , Mexico Index, EWW
-0.11% , Blend Total Market VIPERs, VTI
-0.11% , QQQ Nasdaq 100 Trust, QQQ
-0.12% , Technology DJ US, IYW
-0.12% , LargeCap Growth S&P 500 iS, IVW
-0.12% , MidCap S&P 400 SPDRs, MDY
-0.13% , Energy Global, IXC
-0.13% , Consumer Discretionary SPDR, XLY
-0.13% , MidCap Blend S&P 400 iS, IJH
-0.13% , LargeCap Blend Russell 3000 iS, IWV
-0.14% , DIAMONDS (DJIA), DIA
-0.15% , Industrial SPDR, XLI
-0.15% , Bond, High Yield Corp iBoxx iS, HYG
-0.15% , Dividend High Yield Equity PS, PEY
-0.15% , Technology SPDR, XLK
-0.17% , Growth VIPERs, VUG
-0.17% , MidCap Growth S&P 400 iS, IJK
-0.18% , LargeCap Blend S&P 100, OEF
-0.21% , Info Tech VIPERs, VGT
-0.21% , MidCap Value S&P 400 iS, IJJ
-0.23% , Global 100, IOO
-0.24% , Pacific VIPERs, VPL
-0.25% , Bond, Emerging Mkt JPM iS, EMB
-0.25% , Japan Index, EWJ
-0.28% , Netherlands Index, EWN
-0.28% , Singapore Index, EWS
-0.30% , Global LargeCap Blend MSCI iS, ACWI
-0.30% , Transportation Av DJ, IYT
-0.30% , Financial SPDR, XLF
-0.30% , Taiwan Index, EWT
-0.30% , Value SmallCap VIPERS, VBR
-0.31% , Dividend International, PID
-0.32% , Small Cap VIPERs, VB
-0.34% , United Kingdom Index, EWU
-0.35% , Pacific ex-Japan, EPP
-0.38% , Financials VIPERs, VFH
-0.38% , Capital Markets KWB ST, KCE
-0.39% , Switzerland Index, EWL
-0.39% , Growth SmallCap VIPERs, VBK
-0.42% , Financial DJ US, IYF
-0.45% , Foreign LargeCap EAFE MSCI iS, EFA
-0.45% , SmallCap Value Russell 2000 iS, IWN
-0.45% , Growth EAFE MSCI, EFG
-0.46% , Global ex U.S. LargeCap Blend, ACWX
-0.52% , SmallCap Blend Russell 2000 iS, IWM
-0.52% , Financial Services DJ, IYG
-0.52% , SmallCap Value S&P 600 iS, IJS
-0.52% , Belgium Index, EWK
-0.53% , SmallCap Growth Russell 2000 iS, IWO
-0.53% , SmallCap Blend S&P 600 iS, IJR
-0.54% , Dividend ex-U.S. DJ iS, IDV
-0.55% , Thailand MSCI iS, THD
-0.55% , Malaysia Index, EWM
-0.57% , Microcap Russell, IWC
-0.58% , France Index, EWQ
-0.59% , Europe 350 S&P Index, IEV
-0.60% , Indonesia MV, IDX
-0.61% , Value EAFE MSCI, EFV
-0.63% , India PS, PIN
-0.66% , India Earnings WTree, EPI
-0.67% , European VIPERs, VGK
-0.68% , SmallCap Growth S&P 600 iS, IJT
-0.71% , Latin Am 40, ILF
-0.74% , Emerging 50 BLDRS, ADRE
-0.77% , SmallCap Blend EAFE MSCI iS, SCZ
-0.79% , Brazil Index, EWZ
-0.88% , WilderHill Clean Energy PS, PBW
-0.91% , Homebuilders SPDR, XHB
-0.92% , Emerging VIPERs, VWO
-0.97% , EMU Europe Index, EZU
-0.97% , China LargeCap Growth G D H USX PS, PGJ
-0.99% , Emerging Markets MSCI iS, EEM
-0.99% , Germany Index, EWG
-1.02% , Spain Index, EWP
-1.03% , Metals & Mining SPDR, XME
-1.07% , South Africa Index, EZA
-1.13% , Chile MSCI iS, ECH
-1.19% , Sweden Index, EWD
-1.22% , China 25 iS, FXI
-1.26% , Hong Kong Index, EWH
-1.44% , Biotech SPDR, XBI
-1.66% , Italy Index, EWI
-1.74% , Austria Index, EWO
-3.11% , Russia MV, RSX
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The S&P 500 Composite Potential Resistance
2005.04, high of 8/26/2014

The S&P 500 Composite Potential Support
1965.40, 50-day SMA
1904.78, low of 8/7/2014
1902.17, high of 5/13/2014
1897.28, high of 4/4/2014
1877.65, 200-day SMA
1859.79, low of 5/7/2014
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