Health Care stock sector ETF (XLV) Relative Strength Ratio (XLV/SPY) rose to a new high on 2/4/14 and remains systematically bullish.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) whipsawed back above both its 50-day SMA and 200-day SMA on 2/4/14, thereby turning systematically neutral (from bearish).
The S&P 500 Composite Index (SPX: 1,755.20, up 0.76%) absolute price opened modestly higher and rose further to a peak at 1:06 pm ET before turning choppy. The S&P 500 remained inside the previous day’s high-low range; such an “Inside Day” indicates consolidation. SPX closed above the open and above the midpoint of the day’s high-low range.
The S&P 500 absolute price has remained systematically neutral below its 50-day SMA since 1/24/14. It fell below its closing prices of the previous 15 weeks on 2/3/14, thereby confirming a downside correction.
Falling upside volume raised doubts about Tuesday’s stock price recovery. NYSE total volume fell 15% to a level 15% 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) rose to -15 from -52 on 2/3/14. Negative readings mean that there are more New Lows than New Highs, and that indicates a bearish trend. This indicator gave early warning of a downside reversal: the year-to-date high of 439 set on Wednesday 1/15/14 was far below peaks above 800 in 2013, thereby diverging bearishly compared to a new high for the S&P 500 large-capitalization stock price index as of 1/15/14.
Momentum oscillators RSI and MACD have fallen persistently since 12/31/13 to their lowest levels in 14 months on 2/3/14, thereby indicating bearish momentum and bearish divergence relative to the S&P 500. In addition, both oscillators gave early warning of downside risk by demonstrating weakness relative to the S&P 500 price index itself for many months. Both failed to rise above their highs of 2013 as the S&P 500 price rose to a higher closing price high on 1/15/14.
Momentum divergences, persistently low trading volume on up days, and excessive bullish sentiment remain challenges to a sustainable upside trend. On the other hand, the bullish case appears to rest primarily on continuation of central banks’ highly-accommodative monetary policies and hopes for faster economic recovery.
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Stock Market Indicators
The Dow Theory reconfirmed a Primary Tide Bull Market on 12/31/13 when the Dow-Jones Industrial Average and the Dow-Jones Transportation Average both closed at new closing price highs. The Averages have been diverging since 12/31/13, however, suggesting that all the parts of the stock market may not be in gear and pulling together in the same direction.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) rose above its 50-day SMA on 11/26/13, thereby turning systematically bullish (from neutral). Absolute price crossed below its 50-day SMA on 2/3/14, thereby turning systematically neutral (from bullish).
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 6 years on 2/3/14, thereby reconfirming its preexisting long-term downtrend. BKF/SPY turned systematically bearish (from neutral) on 10/31/13 by crossing below its 50-day SMA. The 50-day SMA remains below the 200-day SMA. BKF/SPY has underperformed since it peaked on 10/14/2010. Absolute price of BKF fell below its lows of the previous 7 months on 2/3/14, thereby reconfirming its preexisting downtrend. Price peaked at 42.29 on 2/1/13, fell to a 20-month low at 32.62 on 6/24/13, and remains stuck in that trading range.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below its lows of the previous 6 years on 1/30/14, thereby confirming its preexisting long-term downtrend. EEM/SPY turned systematically bearish (from neutral) on 10/31/13 by crossing below its 50-day SMA. Long term, EEM/SPY has underperformed since the ratio peaked on 10/14/2010. Absolute price of EEM fell below its lows of the previous 7 months on 2/3/14, thereby reconfirming its preexisting downtrend. Price peaked at 45.34 on 1/2/13, fell to a 19-month low of 36.16 on 6/24/13, and remains stuck in that trading range.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below its lowest levels of the previous 5 months on 12/18/13, thereby reconfirming its preexisting major downtrend. For nearly 6 years, from 11/27/07 to 7/9/13, EFA/SPY substantially underperformed, and that secular downtrend may still be in effect.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) turned systematically bearish (from neutral) on 1/7/14 by crossing below its 50-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) crossed below its 50-day SMA on 2/3/14, thereby turning systematically neutral (from bullish). Absolute price crossed below its 50-day SMA on 1/27/14, thereby turning systematically neutral (from bullish).
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) whipsawed back above both its 50-day SMA and 200-day SMA on 2/4/14, thereby turning systematically neutral (from bearish). Absolute price crossed below its 50-day SMA on 1/24/14, thereby turning systematically neutral (from bullish).
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price crossed above its 50-day SMA on 1/30/14, thereby turning systematically neutral (from bearish). UUP has whipsawed between systematically neutral and bearish since 9/12/13, when the 50-day SMA crossed down below the 200-day SMA. Longer term, UUP has been consolidating secular trend losses since bottoming at 20.84 on 5/4/11. Support 21.32, 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) price rose above its 50-day SMA on 1/31/14, thereby turning systematically neutral (from bearish). Longer term, the 50-day SMA remains in weak position below the 200-day SMA. DBA has been in a cyclical bear market for nearly 3 years, from a peak at 35.58 on 3/4/11 to a low of 24.04 on 1/22/14.
Crude Oil, United States Oil ETF (USO) price whipsawed back above its 50-day SMA on 1/28/14, thereby turning systematically neutral (from bearish). Longer term, the 50-day SMA remains in weak position below the 200-day SMA. Support 34.00, 32.53, 32.12, 30.79, 29.02, 26.28, and 22.74. Resistance 36.07, 37.59, 39.54, 39.64, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) price turned systematically neutral (from bearish) on 1/23/14 when it crossed above its 50-day SMA. Support: 114.46, 113.08, and 102.28. Resistance: 131.44, 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) turned systematically neutral (from bearish) on 1/13/14 when it crossed above its 50-day SMA. Previously, GDX/GLD fell below its lows of the previous 7 years on 12/23/13, thereby reconfirming its preexisting major long-term downtrend. GDX/GLD has stayed systematically bearish most of the time since absolute price peaked at 66.98 on 9/9/11.
Silver, iShares Silver Trust ETF (SLV) price turned systematically bearish (from neutral) on 1/24/14 when it crossed below its 50-day SMA. Support 18.26, 17.75, 16.73, 14.37, 12.27, 11.64, and 8.45. Resistance: 19.69, 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) turned systematically bearish (from neutral) on 1/21/14 when it crossed below its 50-day SMA. Longer term, SLV underperformed GLD substantially for 27 months from 4/28/11 to 7/30/13, and that underperformance trend may be resuming.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price appears to have entered into a neutral trading range since making a low on 6/24/13. Longer term, JJC price was in a persistent downtrend for more than 27 months from its peak of 61.69 on 2/14/11 to its low of 36.87 on 6/24/13. “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
11.48% , NIHD , NII Holdings, Inc.
8.92% , YUM , YUM BRANDS
1.45% , PXJ , Oil & Gas, PXJ
5.36% , IDX , Indonesia MV, IDX
2.47% , NSC , NORFOLK SOUTHERN
2.70% , DD , DU PONT
1.07% , ACWX , Global ex US ACWI iS, ACWX
1.00% , JKL , Value SmallCap iS M, JKL
1.05% , VIA.O , VIACOM INC. (New)
1.23% , GD , GENERAL DYNAMICS
4.23% , EOG , EOG RESOURCES
2.28% , MMM , 3M
0.77% , PMR , Retail, PMR
0.67% , PRF , Value LargeCap Fundamental RAFI 1000, PRF
0.76% , DBA , Agriculture DB PS, DBA
4.65% , RFMD , RF Micro Devices Inc
2.56% , L , LOEWS
0.64% , PBW , WilderHill Clean Energy PS, PBW
0.43% , JKD , LargeCap Blend Core iS M, JKD
0.81% , IWV , LargeCap Blend Russell 3000, IWV
0.97% , VAW , Materials VIPERs, VAW
1.96% , PCAR , PACCAR
1.52% , FNP , Fifth & Pacific Cos., FNP
2.81% , EZA , South Africa Index, EZA
1.10% , CR , CRANE
1.28% , EWT , Taiwan Index, EWT
0.76% , IWC , Microcap Russell, IWC
0.96% , EFV , Value EAFE MSCI, EFV
2.75% , MRK , MERCK & CO
2.14% , BCR , C R BARD
1.29% , LVLT.K , LEVEL 3 COMMUNICATIONS
1.32% , PFG , PRINCIPAL FINL
2.24% , DV , DeVry, Inc.
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Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-10.56% , JCP , JC PENNEY
-1.33% , MYY , Short 100% MidCap 400, MYY
-2.03% , MDT , MEDTRONIC
-2.31% , ETN , EATON
-1.76% , HOLX , Hologic, Inc., HOLX
-1.87% , COH , COACH
-0.96% , UTX , UNITED TECH
-1.25% , VLO , VALERO ENERGY
-1.23% , BSX , BOSTON SCIENT
-0.59% , VPU , Utilities VIPERs, VPU
-0.57% , GCI , GANNETT
-0.43% , TIP , Bond, TIPS, TIP
-2.62% , MWV , MEADWESTVACO
-0.32% , VRSN , VeriSign Inc
-1.43% , HP , Helmerich & Payne HP
-1.89% , D , DOMINION RSCS
-0.33% , MUB , Bond Muni ATM-Free S&P iS, MUB
-1.59% , RTN , RAYTHEON
-1.17% , AEE , AMEREN
-1.54% , LOW , LOWES
-0.50% , LLTC , LINEAR TECH
-0.76% , CINF , CINCINNATI FIN
-0.59% , JWN , NORDSTROM
-2.16% , NOC , NORTHROP GRUMMAN
-0.30% , EMR , EMERSON ELECTRIC
-0.24% , AGG , Bond, Aggregate, AGG
-0.24% , IFF , INTL FLAV & FRAG
-0.52% , IP , INTL PAPER
-0.12% , ALL , ALLSTATE
-0.83% , AMGN , AMGEN
-1.61% , SYMC , SYMANTEC
-0.16% , HD , HOME DEPOT
-0.02% , MCHP , Microchip Technology Incorporated
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
5.36% , Indonesia MV, IDX
5.31% , Turkey MSCI iS, TUR
3.14% , India PS, PIN
2.99% , India Earnings WTree, EPI
2.97% , Latin Am 40, ILF
2.97% , Brazil Index, EWZ
2.81% , South Africa Index, EZA
2.77% , Thailand MSCI iS, THD
2.62% , Russia MV, RSX
2.42% , Australia Index, EWA
2.32% , Emerging VIPERs, VWO
2.21% , Malaysia Index, EWM
2.16% , Pacific ex-Japan, EPP
2.06% , Emerging 50 BLDRS, ADRE
2.02% , Emerging Markets MSCI iS, EEM
1.98% , Mexico Index, EWW
1.86% , Chile MSCI iS, ECH
1.85% , Capital Markets KWB ST, KCE
1.83% , Water Resources, PHO
1.80% , Italy Index, EWI
1.75% , China LargeCap Growth G D H USX PS, PGJ
1.71% , Spain Index, EWP
1.50% , Singapore Index, EWS
1.50% , MidCap Growth S&P 400 iS, IJK
1.49% , Hong Kong Index, EWH
1.44% , Dividend ex-U.S. DJ iS, IDV
1.41% , Biotech SPDR, XBI
1.38% , Sweden Index, EWD
1.36% , France Index, EWQ
1.35% , Realty Cohen & Steers, ICF
1.32% , REIT Wilshire, RWR
1.30% , MidCap S&P 400 SPDRs, MDY
1.28% , Taiwan Index, EWT
1.24% , Homebuilders SPDR, XHB
1.23% , Consumer Discretionary SPDR, XLY
1.21% , Growth MidCap Russell, IWP
1.21% , REIT VIPERs, VNQ
1.19% , Frontier Markets Guggenheim , FRN
1.17% , EMU Europe Index, EZU
1.16% , China 25 iS, FXI
1.16% , Foreign LargeCap EAFE MSCI iS, EFA
1.13% , Growth VIPERs, VUG
1.13% , Transportation Av DJ, IYT
1.13% , MidCap Russell, IWR
1.09% , MidCap Blend S&P 400 iS, IJH
1.07% , European VIPERs, VGK
1.07% , Global ex U.S. LargeCap Blend, ACWX
1.06% , Growth SmallCap VIPERs, VBK
1.04% , Networking, IGN
1.04% , Real Estate US DJ iS, IYR
1.03% , United Kingdom Index, EWU
1.03% , Energy SPDR, XLE
1.02% , Financials VIPERs, VFH
1.01% , Financial Services DJ, IYG
1.00% , Semiconductor SPDR, XSD
1.00% , MidCap Value S&P 400 iS, IJJ
0.99% , Financial DJ US, IYF
0.98% , Health Care SPDR, XLV
0.97% , Financial SPDR, XLF
0.97% , Small Cap VIPERs, VB
0.96% , Value EAFE MSCI, EFV
0.95% , Global LargeCap Blend MSCI iS, ACWI
0.93% , LargeCap Growth S&P 500 iS, IVW
0.92% , LargeCap Growth Russell 1000 iS, IWF
0.91% , Energy & Nat Res iS GS, IGE
0.91% , Belgium Index, EWK
0.91% , Value MidCap Russell, IWS
0.90% , Europe 350 S&P Index, IEV
0.88% , Materials SPDR, XLB
0.86% , Growth EAFE MSCI, EFG
0.86% , Basic Materials DJ US, IYM
0.85% , Metals & Mining SPDR, XME
0.84% , Energy DJ, IYE
0.83% , Netherlands Index, EWN
0.83% , LargeCap Blend S&P=Weight R, RSP
0.83% , Austria Index, EWO
0.83% , SmallCap Growth S&P 600 iS, IJT
0.82% , LargeCap VIPERs, VV
0.82% , Energy VIPERs, VDE
0.81% , LargeCap Blend Russell 3000 iS, IWV
0.79% , Telecom DJ US, IYZ
0.79% , Oil Fund PowerShares, DBO
0.79% , Value SmallCap VIPERS, VBR
0.77% , SmallCap Growth Russell 2000 iS, IWO
0.77% , South Korea Index, EWY
0.76% , Commodity Tracking, DBC
0.76% , Agriculture DB PS, DBA
0.76% , Blend Total Market VIPERs, VTI
0.76% , Switzerland Index, EWL
0.76% , Microcap Russell, IWC
0.75% , SmallCap Blend Russell 2000 iS, IWM
0.75% , Silver Trust iS, SLV
0.74% , QQQ Nasdaq 100 Trust, QQQ
0.73% , Energy Global, IXC
0.73% , Global 100, IOO
0.71% , Pacific VIPERs, VPL
0.71% , SmallCap Value Russell 2000 iS, IWN
0.70% , S&P 500 SPDRs LargeCap Blend, SPY
0.69% , LargeCap Blend S&P 500 iS, IVV
0.68% , SmallCap Blend S&P 600 iS, IJR
0.68% , LargeCap Blend Russell 1000 iS, IWB
0.67% , LargeCap Blend S&P 100, OEF
0.67% , Dividend International, PID
0.67% , Bond, Emerging Mkt JPM iS, EMB
0.65% , LargeCap Value Russell 1000 iS, IWD
0.64% , WilderHill Clean Energy PS, PBW
0.64% , Industrial SPDR, XLI
0.64% , Oil, Crude, U.S. Oil Fund, USO
0.61% , Germany Index, EWG
0.58% , Technology DJ US, IYW
0.57% , SmallCap Value S&P 600 iS, IJS
0.56% , SmallCap Blend EAFE MSCI iS, SCZ
0.53% , Consumer Staples SPDR, XLP
0.52% , Value LargeCap Dynamic PS, PWV
0.49% , LargeCap Value S&P 500 iS, IVE
0.46% , Info Tech VIPERs, VGT
0.43% , Value VIPERs, VTV
0.42% , Dividend SPDR, SDY
0.38% , Technology SPDR, XLK
0.37% , Dividend Appreciation Vipers, VIG
0.36% , DIAMONDS (DJIA), DIA
0.29% , Canada Index, EWC
0.21% , Preferred Stock iS, PFF
0.18% , Dividend High Yield Equity PS, PEY
0.17% , Semiconductor iS IGW, SOXX
0.12% , Bond, High Yield Corp iBoxx iS, HYG
0.12% , Financial Preferred, PGF
0.10% , Bond Ex-US Treas, BWX
0.09% , Japan Index, EWJ
0.07% , Dividend U.S. DJ iS, DVY
0.01% , Bond, 1-3 Year Treasury, SHY
-0.02% , Bond Treasury Short-Term iS, SHV
-0.02% , Bond, High-Yield Junk, JNK
-0.24% , Bond, Intermediate US Aggregate iS, AGG
-0.27% , Gold Shares S.T., GLD
-0.30% , Bond, 10 Year Treasury, IEF
-0.33% , Bond, Muni S&P ATM-Free iS, MUB
-0.43% , Bond, TIPS U.S. Treasury iS, TIP
-0.48% , Bond, Long-Term Corp iBoxx iS, LQD
-0.59% , Utilities VIPERs, VPU
-0.59% , Utilities SPDR, XLU
-0.67% , Bear, Short S&P 500, SH
-1.06% , Bond, 20+ Years Treasury, TLT
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The S&P 500 Composite Potential Resistance
1850.84, low of 1/15/2014
1815.52, low of 1/13/2014
1813.55, high of 11/29/2013
1810.97, 50-day SMA
1767.99, low of 12/18/2013
1760.64, low of 11/13/2013
The S&P 500 Composite Potential Support
1739.66, low of 2/32014
1729.86, high of 9/19/2013
1711.57, high of 10/15/2013
1709.67, high of 8/2/2013
1708.44, 200-day SMA
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
