European stock price indexes broke down from big topping patterns and remain systematically bearish.
The S&P 500 Composite Index (SPX: 1,909.57, down 0.56%) absolute price opened above the previous day’s high but immediately reversed to the downside. Stock prices worked lower until 3:24 pm ET before recovering modestly in the final 36 minutes. SPX closed below the open, below the midpoint of the day’s high-low range, and below the closing price lows of the previous 10 weeks.
NYSE total volume fell 8% to a level 2% 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.
Momentum is a leading indicator of price change, and failing price momentum is often followed by a down move for price. Short-term momentum oscillators RSI and MACD based on the SPX broke down to their lowest levels in more than 6 months on 8/7/14 , thereby confirming their preexisting downtrends. 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.
The Number of Daily Net New Highs on the NYSE (New Highs minus New Lows), now at +26, 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 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. Although not part of the Dow Theory, all 3 Dow-Jones Averages (Industrial, Transportation, and Utility) crossed below their 50-day SMAs on 7/31/14, thereby objectively demonstrating short-term price weakness, at least.
NASDAQ 100 ETF/S&P 500 ETF Relative Strength Ratio (QQQ/SPY) rose above its highs of the previous 13 years on 8/7/14 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 8/4/14 and the rising 50-day SMA crossed above the falling 200-day SMA, thereby turning systematically bullish (from neutral).
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) rose to its highest level in 8 months on 8/4/14. 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) broke down below its lows of the previous 4 months on 8/5/14 and remains systematically bearish. EFA/SPY fell below its lows of the previous 11 years on 3/20/14. 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 but remains systematically neutral, with 50-day SMA still below the 200-day SMA. 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 4 months on 8/5/14. 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 fell to its lowest price level in 4 months on 8/6/14, confirming a downside correction. Price remains systematically neutral: below its 50-day SMA, below the 200-day SMA, but with the 50-day SMA still 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 appears to be in neutral trading range, with the GLD price crisscrossing its 50-day and 200-day SMAs for several months. 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 6 weeks and fell below its 50-day and 200-day SMAs on 8/4/14, thereby turning systematically bearish (from neutral). 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 8 weeks on 8/7/14, again confirming a downside correction. The 50-200 SMA remains negative, with 50Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price fell below its lows of the previous 6 weeks and fell below its 50-day and 200-day SMAs on 8/6/14, thereby turning systematically bearish (from neutral). “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
2.42% , LB , L Brands, LB
4.50% , NFLX , Netflix, NFLX
1.16% , PMCS , PMC SIERRA
1.28% , MBI , MBIA
1.84% , CTB , COOPER TIRE
1.01% , SYMC , SYMANTEC
0.93% , TLT , Bond, 20+ Years Treasury, TLT
0.61% , PFF , Preferred Stock iS, PFF
0.32% , IAU , Gold COMEX iS, IAU
0.38% , FDX , FEDEX
0.66% , RHI , ROBERT HALF
0.86% , SYY , SYSCO
0.19% , AGG , Bond, Aggregate, AGG
1.06% , SDS , Short 200% S&P 500 PS, SDS
0.27% , CR , CRANE
0.21% , RIG , TRANSOCEAN
0.13% , MUB , Bond Muni ATM-Free S&P iS, MUB
0.61% , SRCL , Stericycle, SRCL
0.50% , SH , Short 100% S&P 500, SH
0.06% , EWT , Taiwan Index, EWT
0.15% , GVI , Bond Interm U.S. Gov, GVI
0.22% , CCL , CARNIVAL STK A
0.04% , JCI , JOHNSON CONTROLS
0.44% , CAT , CATERPILLAR
0.03% , CB , CHUBB
0.26% , LQD , Bond, Corp, LQD
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-3.95% , HAR , Harman International
-5.67% , SNI , Scripps Networks Interactive
-1.13% , PXJ , Oil & Gas, PXJ
-2.97% , CI , CIGNA
-3.41% , HUM , HUMANA
-0.55% , OEF , LargeCap Blend S&P 100, OEF
-5.35% , ZEUS , Olympic Steel, ZEUS
-1.45% , DBA , Agriculture DB PS, DBA
-3.32% , TDC , Teradata Corporation, TDC
-1.19% , NWSA , News Corporation, NWSA
-1.66% , DLX , DELUXE
-1.98% , HP , Helmerich & Payne HP
-2.31% , BK , BANK OF NEW YORK
-2.05% , XRAY , DENTSPLY International Inc
-2.75% , UNH , UNITEDHEALTH GRP
-3.38% , DISCA , Discovery Communications
-2.76% , EWI , Italy Index, EWI
-4.72% , CECO , CAREER EDUCATION CORP
-2.66% , BC , BRUNSWICK
-0.56% , PRF , Value LargeCap Fundamental RAFI 1000, PRF
-0.81% , PKB , Building & Construction, PKB
-0.71% , EWN , Netherlands Index, EWN
-3.64% , WLP , WELLPOINT HEALTH
-2.36% , SPLS , STAPLES
-1.35% , PJP , Pharmaceuticals, PJP
-3.96% , AET , AETNA
-0.89% , IXC , Energy Global, IXC
-1.53% , EZU , EMU Europe Index, EZU
-0.82% , EWU , United Kingdom Index, EWU
-2.91% , LRCX , LAM RESEARCH CORP
-2.15% , GNW , GENWORTH FINANCIAL
-0.61% , PXE , Energy Exploration & Prod, PXE
-2.17% , AMAT , APPLIED MATERIAL
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.25% , China LargeCap Growth G D H USX PS, PGJ
1.15% , Utilities SPDR, XLU
0.98% , Utilities VIPERs, VPU
0.93% , Bond, 20+ Years Treasury, TLT
0.69% , Russia MV, RSX
0.66% , Oil Fund PowerShares, DBO
0.61% , Preferred Stock iS, PFF
0.58% , Oil, Crude, U.S. Oil Fund, USO
0.50% , Bear, Short S&P 500, SH
0.45% , Bond, 10 Year Treasury, IEF
0.45% , Financial Preferred, PGF
0.43% , Bond, TIPS U.S. Treasury iS, TIP
0.41% , Gold Shares S.T., GLD
0.39% , Indonesia MV, IDX
0.32% , WilderHill Clean Energy PS, PBW
0.26% , Bond, Long-Term Corp iBoxx iS, LQD
0.20% , Thailand MSCI iS, THD
0.20% , Commodity Tracking, DBC
0.19% , Bond, Intermediate US Aggregate iS, AGG
0.15% , Real Estate US DJ iS, IYR
0.13% , Bond, Muni S&P ATM-Free iS, MUB
0.10% , Industrial SPDR, XLI
0.08% , Dividend U.S. DJ iS, DVY
0.06% , Bond, High Yield Corp iBoxx iS, HYG
0.06% , Taiwan Index, EWT
0.05% , REIT VIPERs, VNQ
0.05% , Bond, 1-3 Year Treasury, SHY
0.05% , Realty Cohen & Steers, ICF
0.00% , Bond Treasury Short-Term iS, SHV
0.00% , Frontier Markets Guggenheim , FRN
0.00% , REIT Wilshire, RWR
-0.02% , Dividend High Yield Equity PS, PEY
-0.04% , Water Resources, PHO
-0.05% , Bond, High-Yield Junk, JNK
-0.07% , Bond Ex-US Treas, BWX
-0.12% , Metals & Mining SPDR, XME
-0.12% , Switzerland Index, EWL
-0.13% , Malaysia Index, EWM
-0.18% , Bond, Emerging Mkt JPM iS, EMB
-0.20% , Transportation Av DJ, IYT
-0.21% , Chile MSCI iS, ECH
-0.24% , Belgium Index, EWK
-0.29% , MidCap Value S&P 400 iS, IJJ
-0.29% , Austria Index, EWO
-0.30% , Japan Index, EWJ
-0.31% , Silver Trust iS, SLV
-0.32% , QQQ Nasdaq 100 Trust, QQQ
-0.34% , Dividend SPDR, SDY
-0.35% , Value SmallCap VIPERS, VBR
-0.36% , Technology DJ US, IYW
-0.36% , Growth SmallCap VIPERs, VBK
-0.37% , Info Tech VIPERs, VGT
-0.37% , MidCap Blend S&P 400 iS, IJH
-0.38% , Financials VIPERs, VFH
-0.38% , MidCap S&P 400 SPDRs, MDY
-0.38% , Emerging Markets MSCI iS, EEM
-0.40% , DIAMONDS (DJIA), DIA
-0.40% , Small Cap VIPERs, VB
-0.40% , Homebuilders SPDR, XHB
-0.41% , MidCap Growth S&P 400 iS, IJK
-0.41% , Technology SPDR, XLK
-0.43% , Singapore Index, EWS
-0.44% , India Earnings WTree, EPI
-0.45% , Financial SPDR, XLF
-0.46% , Value MidCap Russell, IWS
-0.46% , Emerging VIPERs, VWO
-0.46% , Hong Kong Index, EWH
-0.48% , Dividend Appreciation Vipers, VIG
-0.48% , LargeCap Growth Russell 1000 iS, IWF
-0.48% , SmallCap Blend Russell 2000 iS, IWM
-0.49% , MidCap Russell, IWR
-0.49% , SmallCap Value S&P 600 iS, IJS
-0.49% , Financial DJ US, IYF
-0.49% , LargeCap Growth S&P 500 iS, IVW
-0.50% , Growth MidCap Russell, IWP
-0.50% , SmallCap Growth Russell 2000 iS, IWO
-0.51% , Growth VIPERs, VUG
-0.51% , LargeCap VIPERs, VV
-0.52% , LargeCap Blend Russell 3000 iS, IWV
-0.52% , SmallCap Growth S&P 600 iS, IJT
-0.52% , Consumer Discretionary SPDR, XLY
-0.52% , Blend Total Market VIPERs, VTI
-0.52% , SmallCap Blend S&P 600 iS, IJR
-0.53% , LargeCap Blend S&P 500 iS, IVV
-0.54% , LargeCap Value Russell 1000 iS, IWD
-0.54% , S&P 500 SPDRs LargeCap Blend, SPY
-0.54% , Value VIPERs, VTV
-0.55% , LargeCap Blend S&P 100, OEF
-0.55% , LargeCap Value S&P 500 iS, IVE
-0.56% , SmallCap Value Russell 2000 iS, IWN
-0.56% , LargeCap Blend Russell 1000 iS, IWB
-0.56% , LargeCap Blend S&P=Weight R, RSP
-0.57% , Pacific VIPERs, VPL
-0.61% , India PS, PIN
-0.61% , Global 100, IOO
-0.63% , Energy SPDR, XLE
-0.64% , South Korea Index, EWY
-0.65% , Energy DJ, IYE
-0.65% , Value LargeCap Dynamic PS, PWV
-0.66% , Global LargeCap Blend MSCI iS, ACWI
-0.67% , Financial Services DJ, IYG
-0.68% , SmallCap Blend EAFE MSCI iS, SCZ
-0.69% , Canada Index, EWC
-0.71% , Energy VIPERs, VDE
-0.71% , Netherlands Index, EWN
-0.74% , Energy & Nat Res iS GS, IGE
-0.74% , Dividend International, PID
-0.77% , Telecom DJ US, IYZ
-0.81% , Foreign LargeCap EAFE MSCI iS, EFA
-0.81% , Global ex U.S. LargeCap Blend, ACWX
-0.82% , United Kingdom Index, EWU
-0.82% , Consumer Staples SPDR, XLP
-0.82% , Basic Materials DJ US, IYM
-0.84% , South Africa Index, EZA
-0.87% , China 25 iS, FXI
-0.88% , Materials SPDR, XLB
-0.89% , Energy Global, IXC
-0.90% , Microcap Russell, IWC
-0.90% , Capital Markets KWB ST, KCE
-0.91% , Growth EAFE MSCI, EFG
-0.95% , Mexico Index, EWW
-0.96% , Pacific ex-Japan, EPP
-1.00% , Value EAFE MSCI, EFV
-1.01% , Emerging 50 BLDRS, ADRE
-1.02% , Sweden Index, EWD
-1.08% , European VIPERs, VGK
-1.11% , Dividend ex-U.S. DJ iS, IDV
-1.12% , Networking, IGN
-1.14% , Europe 350 S&P Index, IEV
-1.14% , Australia Index, EWA
-1.23% , Germany Index, EWG
-1.27% , Brazil Index, EWZ
-1.29% , Health Care SPDR, XLV
-1.31% , Latin Am 40, ILF
-1.34% , Semiconductor iS IGW, SOXX
-1.37% , Semiconductor SPDR, XSD
-1.42% , Biotech SPDR, XBI
-1.45% , Agriculture DB PS, DBA
-1.47% , Turkey MSCI iS, TUR
-1.52% , France Index, EWQ
-1.53% , EMU Europe Index, EZU
-2.12% , Spain Index, EWP
-2.76% , Italy Index, EWI
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The S&P 500 Composite Potential Resistance
1991.39, high of 7/24/2014
1955.10, 50-day SMA
1952.86, low of 7/10/2014
The S&P 500 Composite Potential Support
1902.17, high of 5/13/2014
1897.28, high of 4/4/2014
1861.87 , 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
