The Dow-JonesTransports fell below 50- and 200-day SMAs on 8/27/12, thereby turning systematically bearish again.
Industrial stock sector ETF Relative Strength Ratio (XLI/SPY) whipsawed back below its 50-day SMA on 8/27/12, thereby turning systematically bearish again.
Consumer Discretionary stock sector ETF Relative Strength Ratio (XLY/SPY) whipsawed back below its 50-day SMA on 8/27/12, thereby turning systematically neutral again.
The S&P 500 (SPX: 1,410.44) fell 0.69 points or 0.05% on Monday.
Price momentum oscillators have turned downward, after many of them demonstrated bearish divergences.
NYSE volume fell 6% on Monday and was 36% below its 200-day SMA. Volume has been running near the lowest levels of the year since 8/8/12, possibly reflecting diminishing enthusiasm for stocks, as well as summer vacations.
On-Balance Volume for the SPX remains in a downtrend with bearish divergence.
NYSE Cumulative Volume of Advancing Stocks minus Volume of Declining Stocks remains weak relative to price: it recovered only a little more than 61.8% of its March-June loss while the S&P 500 recovered 100%. Clearly, volume has not been confirming the price up move.
It takes volume to push prices up. After the shorts have been forced to cover and the longs have had their fill of buying, in the absence of a fresh source of demand, stocks fall of their own weight.
While the S&P 500 Composite Price Index recovered nearly all of its April-June loss, both the percentage of these same 500 stocks that are above their 200-day SMAs and the percentage in bullish Point-and-Figure Chart uptrends have recovered much less of their losses. Moreover, both are systematically neutral relative to their own 50- and 200-day SMAs. Both indicators turned down last week after failing to confirm the strength in the S&P 500. Both are diverging bearishly.
With the stock price indexes far above their 4-year lows and still very close to the top end of their 4-year price range, downside risk may exceed upside potential for the stock market. Choosing safety over risk appears to be the most reasonable approach for conservative traders and investors.
For extensive coverage of major global markets with illustrative charts, take a free trial for my weekly report —
click here.
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Hedge funds and equity mutual funds both lost money last year, 2011, and some are down again this year as well.
Meanwhile, one money manager made gains for 5 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).
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Stock Market Indicators
The Dow Theory signaled a Primary Tide Bear Market on 5/17/12 when both Industrials and Transports closed below their closing price lows of the previous 4 months, including the critical lows of March and April, 2012. The Averages gave an early warning by diverging after 2/3/12, as the Transports turned corrective and failed to confirm higher highs by the Industrials. Again on 5/1/12, the Industrials rose to a higher closing price high while the Transports failed to rise to a higher closing price high, thereby indicating a non-confirmation and bearish divergence. Last week, the Industrials closely approached their highs of the year, but the Transports continued to lag well below their highs, thereby demonstrating a bearish divergence. The Transports fell below 50- and 200-day SMAs on 8/27/12, thereby turning systematically bearish again.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) rose above its 50-day SMA on 8/6/12, thereby turning systematically bullish again. QQQ/SPY remains above its 200-day SMA, and its 50-day SMA has been above its 200-day SMA since 8/5/11.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 3 years on 7/23/12, reconfirming its bearish trend. Short term, BKF/SPY turned systematically bearish again on 8/14/12, when it fell below its 50-day SMA. BKF/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/13/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below its lows of the previous 3 years on 7/23/12, reconfirming its bearish trend. EEM/SPY turned systematically bearish again on 8/17/12, when it fell below its 50-day SMA. EEM/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 2/3/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) reconfirmed a bearish major trend when it fell below its lows of the previous 9 years on 7/24/12. EFA/SPY turned systematically neutral 8/3/12 when it rose above its 50-day SMA. EFA/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/14/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) rose above its highs of the previous 2 years on 7/31/12, thereby reconfirming its preexisting major bullish trend. OEF/SPY remains systematically bullish above its 50-day SMA, above its 200-day SMA, and the 50-day SMA has been above the 200-day SMA consistently every day since 8/24/11. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative safety of large size. On the other side of the coin, Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors prefer riskier and more volatile stocks.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below its lows of the previous 10 months on 8/1/12, thereby confirming its major downtrend. Systematically, the IWM/SPY ratio remains bearish: below its 50-day SMA, below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA consistently every day since 4/20/12.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) MDY/SPY whipsawed back below its 50-day SMA again on 8/24/12, thereby turning systematically bearish again. MDY/SPY remains below its 200-day SMA, and its 50-day SMA has been below its 200-day SMA since 6/6/12.
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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
1523.57, high of 12/11/2007
1498.85, high of 12/26/2007
1440.24, high of 5/19/2008
1426.68, high of 8/21/2012
1422.38, high of 4/2/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
The S&P 500 Composite Potential Support
1398.04, low of 8/24/2012
1391.04, low of 8/6/2012
1389.07, Fibonacci 78.6% of April-June 2012 range
1388.71, low of 5/3/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1371.69, 50-day SMA
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1362.93, Fibonacci 61.8% of April-June 2012 range
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
1344.56, Fibonacci 50% of April-June 2012 range
1340.34, Fibonacci 23.6% of 2011-12 range
1340.03, low of 3/6/2012
1335.52, high of 6/11/2012
1334.95, 200-day SMA
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
1326.19, Fibonacci 38.2% of April-June 2012 range
1325.41, low of 7/12/2012
1306.62, low of 6/12/2012
1303.47, Fibonacci 23.6% of April-June 2012 range
1291.98, low of 5/18/2012
1289.59, Fibonacci 38.2% of 2011-12 range
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
1248.58, Fibonacci 50.0% of 2011-12 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
1207.56, Fibonacci 61.8% of 2011-12 range
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
1149.16, Fibonacci 78.6% R of 2011-12 range
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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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
4.60% , MTB , M&T BANK
1.02% , PXE , Energy Exploration & Prod, PXE
7.20% , TIF , TIFFANY
5.23% , VLO , VALERO ENERGY
5.13% , HMA , HEALTH MGMT STK A
5.15% , TLAB , TELLABS
1.87% , RIMM , RESEARCH IN MOTION LTD
3.24% , BBY , BEST BUY
2.07% , CCL , CARNIVAL STK A
0.43% , TMW , Wilshire 5000 ST TM, TMW
0.30% , PIC , Insurance, PIC
2.24% , LSI , LSI LOGIC
0.50% , SNV , SYNOVUS
1.05% , D , DOMINION RSCS
2.43% , OMX , OFFICEMAX INC., OMX
0.94% , ININ , Interactive Intelligence ININ
1.09% , WMB , WILLIAMS
1.13% , ITT , ITT INDS
0.36% , PSJ , Software, PSJ
2.95% , PWER , POWER ONE
0.68% , NEE , NextEra Energy Resources LLC
0.66% , GWW , WW GRAINGER
0.35% , EWU , United Kingdom Index, EWU
0.14% , VBK , Growth SmallCap VIPERs, VBK
0.62% , MMC , MARSH & MCLENNAN
0.10% , PBJ , Food & Beverage, PBJ
0.54% , NI , NISOURCE
0.07% , MZZ , Short 200% MidCap 400 PS, MZZ
0.94% , WY , WEYERHAEUSER
0.50% , CTB , COOPER TIRE
0.41% , PUI , Utilities, PUI
0.27% , PXQ , Networking, PXQ
0.34% , TLH , Bond 10-20 Year US Treas, TLH
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-4.39% , RHI , ROBERT HALF
-1.50% , PIN , India PS, PIN
-2.52% , MTG , MGIC INVESTMENT
-0.23% , ACWX , Global ex US ACWI iS, ACWX
-3.06% , NIHD , NII Holdings, Inc.
-2.17% , GNTX , Gentex Corporation
-2.04% , NWL , NEWELL RUBBER
-3.19% , RFMD , RF Micro Devices Inc
-1.39% , GOOG , Google
-1.31% , EWY , South Korea Index, EWY
-2.39% , ISIL , INTERSIL CORP
-0.23% , NYC , LargeCap Blend NYSE Composite iS, NYC
-1.32% , HP , Helmerich & Payne HP
-1.93% , CHKP , Check Point Software Technologies Ltd
-1.85% , DLTR , Dollar Tree Stores Inc
-2.21% , GCI , GANNETT
-1.87% , AMP , Ameriprise Financial Inc.
-1.95% , RSH , RADIOSHACK
-0.62% , FRN , Frontier Markets Guggenheim , FRN
-0.72% , WPO , Washington Post
-2.10% , HPQ , HEWLETT PACKARD
-2.88% , CECO , CAREER EDUCATION CORP
-0.59% , VOX , Telecom Services VIPERs, VOX
-0.99% , IYT , Transportation Av DJ, IYT
-0.60% , FLEX , Flextronics International Ltd
-0.48% , MOLX , MOLEX
-2.00% , PHM , PULTE HOMES
-0.91% , CSX , CSX
-0.06% , IWB , LargeCap 1000 R, IWB
-0.23% , VIS , Industrials VIPERs, VIS
-0.29% , PKI , PERKINELMER
-0.19% , VIG , Dividend Appreciation Vipers, VIG
-0.42% , WHR , WHIRLPOOL
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
0.76% Germany Index, EWG
0.59% EMU Europe Index, EZU
0.59% Spain Index, EWP
0.58% Bond, 20+ Years Treasury, TLT
0.58% France Index, EWQ
0.52% Italy Index, EWI
0.44% Networking, IGN
0.43% Sweden Index, EWD
0.42% Austria Index, EWO
0.36% European VIPERs, VGK
0.35% United Kingdom Index, EWU
0.34% REIT Wilshire, RWR
0.34% Europe 350 S&P Index, IEV
0.34% Belgium Index, EWK
0.32% Bond, TIPS U.S. Treasury iS, TIP
0.30% REIT VIPERs, VNQ
0.30% SmallCap Blend Russell 2000 iS, IWM
0.29% Bond, Muni S&P ATM-Free iS, MUB
0.27% SmallCap Value Russell 2000 iS, IWN
0.26% Bond, 10 Year Treasury, IEF
0.25% Biotech SPDR, XBI
0.24% SmallCap Blend S&P 600 iS, IJR
0.23% SmallCap Growth Russell 2000 iS, IWO
0.23% Realty Cohen & Steers, ICF
0.22% Microcap Russell, IWC
0.22% Utilities SPDR, XLU
0.22% Real Estate US DJ iS, IYR
0.20% SmallCap Value S&P 600 iS, IJS
0.19% Utilities VIPERs, VPU
0.17% Netherlands Index, EWN
0.16% Financial Preferred, PGF
0.16% QQQ Nasdaq 100 Trust, QQQ
0.15% SmallCap Growth S&P 600 iS, IJT
0.14% Small Cap VIPERs, VB
0.14% Value LargeCap Dynamic PS, PWV
0.14% Consumer Staples SPDR, XLP
0.14% Growth SmallCap VIPERs, VBK
0.14% Info Tech VIPERs, VGT
0.13% Bond, Intermediate US Aggregate iS, AGG
0.13% Preferred Stock iS, PFF
0.13% Bond, Long-Term Corp iBoxx iS, LQD
0.11% Dividend High Yield Equity PS, PEY
0.10% Health Care SPDR, XLV
0.10% Technology SPDR, XLK
0.07% Oil Fund PowerShares, DBO
0.07% Agriculture DB PS, DBA
0.06% Foreign LargeCap EAFE MSCI iS, EFA
0.05% Technology DJ US, IYW
0.05% LargeCap Growth S&P 500 iS, IVW
0.04% Value SmallCap VIPERS, VBR
0.04% Bond, Emerg Mkt JPM iS, EMB
0.04% Energy SPDR, XLE
0.03% Dividend U.S. DJ iS, DVY
0.03% Bond Ex-US Treas, BWX
0.03% Bear, Short S&P 500, SH
0.02% Value EAFE MSCI, EFV
0.02% S&P 500 SPDRs LargeCap Blend, SPY
0.02% Financial DJ US, IYF
0.02% LargeCap Growth Russell 1000 iS, IWF
0.01% Growth VIPERs, VUG
0.00% Switzerland Index, EWL
0.00% Silver Trust iS, SLV
0.00% Bond Treasury Short-Term iS, SHV
-0.01% Bond, 1-3 Year Treasury, SHY
-0.01% LargeCap Blend Russell 3000 iS, IWV
-0.01% Blend Total Market VIPERs, VTI
-0.02% Growth EAFE MSCI, EFG
-0.02% MidCap Blend S&P 400 iS, IJH
-0.03% Bond, High-Yield Junk, JNK
-0.03% MidCap S&P 400 SPDRs, MDY
-0.03% LargeCap Blend S&P 100, OEF
-0.04% MidCap Growth S&P 400 iS, IJK
-0.04% Financial Services DJ, IYG
-0.04% LargeCap Blend S&P 500 iS, IVV
-0.06% Financials VIPERs, VFH
-0.06% LargeCap Blend Russell 1000 iS, IWB
-0.07% Financial SPDR, XLF
-0.07% Dividend International, PID
-0.07% MidCap Value S&P 400 iS, IJJ
-0.08% Bond, High Yield Corp iBoxx iS, HYG
-0.09% LargeCap VIPERs, VV
-0.09% LargeCap Value S&P 500 iS, IVE
-0.10% Energy DJ, IYE
-0.10% Growth MidCap Russell, IWP
-0.10% MidCap Russell, IWR
-0.10% Energy Global, IXC
-0.11% LargeCap Value Russell 1000 iS, IWD
-0.13% Value MidCap Russell, IWS
-0.13% Energy VIPERs, VDE
-0.14% Value VIPERs, VTV
-0.14% Dividend SPDR, SDY
-0.14% Canada Index, EWC
-0.15% Consumer Discretionary SPDR, XLY
-0.19% Dividend Appreciation Vipers, VIG
-0.19% Dividend ex-U.S. DJ iS, IDV
-0.20% LargeCap Blend S&P=Weight R, RSP
-0.20% Oil, Crude, U.S. Oil Fund, USO
-0.21% Water Resources, PHO
-0.21% Global 100, IOO
-0.23% Global ex U.S. LargeCap Blend, ACWX
-0.24% Global LargeCap Blend MSCI iS, ACWI
-0.24% DIAMONDS (DJIA), DIA
-0.28% Energy & Nat Res iS GS, IGE
-0.30% Industrial SPDR, XLI
-0.32% Japan Index, EWJ
-0.33% Telecom DJ US, IYZ
-0.35% Hong Kong Index, EWH
-0.38% SmallCap Blend EAFE MSCI iS, SCZ
-0.38% Gold Shares S.T., GLD
-0.39% Semiconductor iS IGW, SOXX
-0.41% Turkey MSCI iS, TUR
-0.46% Commodity Tracking, DBC
-0.47% Taiwan Index, EWT
-0.47% Thailand MSCI iS, THD
-0.53% Mexico Index, EWW
-0.55% Emerging 50 BLDRS, ADRE
-0.56% Homebuilders SPDR, XHB
-0.57% Indonesia MV, IDX
-0.57% Capital Markets KWB ST, KCE
-0.59% Semiconductor SPDR, XSD
-0.59% Pacific VIPERs, VPL
-0.59% Materials SPDR, XLB
-0.62% Frontier Markets Guggenheim , FRN
-0.64% South Africa Index, EZA
-0.67% Australia Index, EWA
-0.68% Malaysia Index, EWM
-0.70% WilderHill Clean Energy PS, PBW
-0.76% China LargeCap Growth G D H USX PS, PGJ
-0.78% Pacific ex-Japan, EPP
-0.84% Singapore Index, EWS
-0.86% Russia MV, RSX
-0.92% Latin Am 40, ILF
-0.96% Chile MSCI iS, ECH
-0.98% Basic Materials DJ US, IYM
-0.99% Transportation Av DJ, IYT
-1.00% Brazil Index, EWZ
-1.00% Emerging VIPERs, VWO
-1.02% Emerging Markets MSCI iS, EEM
-1.31% South Korea Index, EWY
-1.38% Metals & Mining SPDR, XME
-1.47% China 25 iS, FXI
