The S&P 500 Composite Index (SPX: 1,782.59), down 0.65%, absolute price gapped lower at the open but quickly reversed. By 2:50 pm ET, SPX had recovered nearly all of its opening loss. Prices fell again in the final 70 minutes. The S&P 500 closed above the open, modestly below the midpoint of the day’s high-low range, and below the closing price of the previous trading day.
The S&P 500 absolute price has remained systematically neutral below its 50-day SMA since 1/24/14 and, on Wednesday 1/29/14, SPX closed below the closing prices of the previous 11 weeks.
NYSE total volume rose 14% to a level 14% 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) fell to -12, down from 53 on 1/30/14. Negative readings mean that there are more New Lows than New Highs, and that indicates a bearish trend. 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 based on the S&P 500 have been weak relative to the price index itself for many months. Both were unable to rise above their previous 2013 highs as the S&P 500 price rose to a higher closing price high on 1/15/14. RSI fell steeply from an overbought peak at 71.16 on 12/31/13 to a low of 34.54 on 1/27/14, which was its lowest level in 14 months, since 11/16/12, indicating relatively bearish momentum. MACD has fallen persistently since 12/31/13 and now is at its lowest level since 9/5/13. Both momentum indicators are indicating bearish divergence.
Momentum divergences, persistently low trading volume, 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 above its 50-day SMA on 1/30/14, thereby turning systematically bullish (from neutral).
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 6 years on 1/30/14, 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 20 weeks on 1/29/14, 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 20 weeks on 1/29/14, 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) rose above its 50-day SMA on 12/20/13, thereby turning systematically bullish (from neutral). 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) turned systematically neutral (from bearish) on 1/7/14 by crossing above both its 50-day SMA and 200-day SMA. 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
9.52% , CSC , COMPUTER SCIENCE
7.90% , WYNN , Wynn Resorts L
2.45% , CTB , COOPER TIRE
10.02% , UIS , UNISYS
2.66% , MSFT , MICROSOFT
5.37% , LLL , L-3 COMMS HLDGS
2.02% , PMCS , PMC SIERRA
1.11% , DBA , Agriculture DB PS, DBA
1.56% , AEE , AMEREN
1.85% , NOV , NATIONAL OILWELL VARC0
3.46% , RTN , RAYTHEON
1.88% , BRCM , BROADCOM STK A
1.34% , IP , INTL PAPER
3.37% , LEN , Lennar Corp. (LEN)
1.40% , DTE , DTE ENERGY
2.62% , EMN , EASTMAN CHEM
2.07% , TYC , TYCO INTL
1.32% , SRE , SEMPRA ENERGY
1.28% , D , DOMINION RSCS
2.06% , CMS , CMS ENERGY
2.62% , DHI , D.R. HORTON, DHI
0.55% , ICF , Realty Cohen & Steers, ICF
0.95% , ED , CON ED
0.79% , AES , AES
0.67% , TLT , Bond, 20+ Years Treasury, TLT
0.69% , MYY , Short 100% MidCap 400, MYY
0.53% , RWR , REIT Wilshire, RWR
2.08% , NWL , NEWELL RUBBER
0.51% , IYW , Technology DJ US, IYW
1.30% , CPWR , COMPUWARE
1.06% , FE , FIRSTENERGY
0.91% , CLX , CLOROX
1.18% , AEP , AM ELEC POWER
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Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.40% , EWO , Austria Index, EWO
-10.37% , NEM , NEWMONT MINING
-4.14% , CVX , CHEVRONTEXACO
-11.00% , AMZN , Amazoncom Inc
-2.89% , WY , WEYERHAEUSER
-0.97% , ADRE , Emerging 50 BLDRS, ADRE
-1.84% , EWG , Germany Index, EWG
-2.45% , TXT , TEXTRON
-1.14% , EWU , United Kingdom Index, EWU
-1.70% , EFA , EAFE Index, EFA
-1.89% , OMC , OMNICOM
-2.68% , NYT , NY TIMES STK A
-2.56% , CB , CHUBB
-1.31% , IYF , Financial DJ US, IYF
-2.10% , ALL , ALLSTATE
-1.70% , CS , Credit Suisse Group, CS
-3.97% , DB , Deutsche Bank AG, DB
-1.63% , FRN , Frontier Markets Guggenheim , FRN
-3.12% , MJN , Mead Johnson Nutrition
-1.58% , CINF , CINCINNATI FIN
-1.71% , CTSH , Cognizant Technology Solutions
-1.90% , F , FORD MOTOR
-1.16% , VRSN , VeriSign Inc
-1.54% , WFC , WELLS FARGO
-0.73% , OEF , LargeCap Blend S&P 100, OEF
-1.25% , PPG , PPG INDUSTRIES
-2.52% , PCAR , PACCAR
-1.29% , FISV , FISERV
-2.62% , EWJ , Japan Index, EWJ
-0.61% , IWZ , Growth LargeCap Russell 3000, IWZ
-0.72% , VTV , Value VIPERs, VTV
-1.88% , AIG , AMER INTL GROUP
-0.85% , IYH , Healthcare DJ, IYH
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.37% , Thailand MSCI iS, THD
1.32% , South Africa Index, EZA
1.11% , Agriculture DB PS, DBA
0.96% , Homebuilders SPDR, XHB
0.83% , Utilities SPDR, XLU
0.69% , Bear, Short S&P 500, SH
0.69% , Utilities VIPERs, VPU
0.67% , Bond, 20+ Years Treasury, TLT
0.55% , Realty Cohen & Steers, ICF
0.54% , REIT VIPERs, VNQ
0.53% , REIT Wilshire, RWR
0.51% , Technology DJ US, IYW
0.48% , Taiwan Index, EWT
0.39% , Bond, 10 Year Treasury, IEF
0.31% , Real Estate US DJ iS, IYR
0.30% , Bond, Long-Term Corp iBoxx iS, LQD
0.27% , Gold Shares S.T., GLD
0.23% , Technology SPDR, XLK
0.20% , Bond, TIPS U.S. Treasury iS, TIP
0.19% , South Korea Index, EWY
0.19% , Bond, Intermediate US Aggregate iS, AGG
0.16% , Emerging Markets MSCI iS, EEM
0.14% , Bond Ex-US Treas, BWX
0.14% , Malaysia Index, EWM
0.12% , Financial Preferred, PGF
0.09% , Bond, Muni S&P ATM-Free iS, MUB
0.06% , India Earnings WTree, EPI
0.05% , Bond, 1-3 Year Treasury, SHY
0.02% , Info Tech VIPERs, VGT
-0.01% , Bond Treasury Short-Term iS, SHV
-0.03% , Emerging VIPERs, VWO
-0.03% , Bond, High Yield Corp iBoxx iS, HYG
-0.05% , Bond, High-Yield Junk, JNK
-0.07% , Canada Index, EWC
-0.12% , Turkey MSCI iS, TUR
-0.12% , Commodity Tracking, DBC
-0.16% , Preferred Stock iS, PFF
-0.22% , Silver Trust iS, SLV
-0.23% , China 25 iS, FXI
-0.24% , Bond, Emerging Mkt JPM iS, EMB
-0.27% , QQQ Nasdaq 100 Trust, QQQ
-0.27% , Transportation Av DJ, IYT
-0.28% , Telecom DJ US, IYZ
-0.28% , Indonesia MV, IDX
-0.30% , WilderHill Clean Energy PS, PBW
-0.31% , Hong Kong Index, EWH
-0.32% , Dividend U.S. DJ iS, DVY
-0.34% , Growth SmallCap VIPERs, VBK
-0.35% , Mexico Index, EWW
-0.40% , MidCap Value S&P 400 iS, IJJ
-0.41% , MidCap S&P 400 SPDRs, MDY
-0.41% , Dividend SPDR, SDY
-0.42% , Metals & Mining SPDR, XME
-0.43% , Oil, Crude, U.S. Oil Fund, USO
-0.43% , Value SmallCap VIPERS, VBR
-0.43% , MidCap Russell, IWR
-0.45% , LargeCap Growth S&P 500 iS, IVW
-0.46% , Semiconductor iS IGW, SOXX
-0.47% , Water Resources, PHO
-0.48% , LargeCap Blend S&P=Weight R, RSP
-0.49% , Consumer Staples SPDR, XLP
-0.49% , LargeCap Growth Russell 1000 iS, IWF
-0.49% , Value MidCap Russell, IWS
-0.50% , Industrial SPDR, XLI
-0.50% , Basic Materials DJ US, IYM
-0.51% , Chile MSCI iS, ECH
-0.51% , SmallCap Growth Russell 2000 iS, IWO
-0.54% , India PS, PIN
-0.54% , MidCap Blend S&P 400 iS, IJH
-0.55% , Small Cap VIPERs, VB
-0.56% , Growth VIPERs, VUG
-0.57% , SmallCap Blend S&P 600 iS, IJR
-0.58% , SmallCap Growth S&P 600 iS, IJT
-0.58% , MidCap Growth S&P 400 iS, IJK
-0.58% , Growth MidCap Russell, IWP
-0.59% , S&P 500 SPDRs LargeCap Blend, SPY
-0.61% , Dividend High Yield Equity PS, PEY
-0.62% , LargeCap VIPERs, VV
-0.62% , SmallCap Value S&P 600 iS, IJS
-0.62% , LargeCap Blend Russell 3000 iS, IWV
-0.63% , LargeCap Blend S&P 500 iS, IVV
-0.63% , Russia MV, RSX
-0.63% , Latin Am 40, ILF
-0.64% , LargeCap Blend Russell 1000 iS, IWB
-0.64% , Dividend Appreciation Vipers, VIG
-0.65% , Blend Total Market VIPERs, VTI
-0.65% , Materials SPDR, XLB
-0.68% , Dividend International, PID
-0.72% , Value VIPERs, VTV
-0.73% , LargeCap Blend S&P 100, OEF
-0.73% , Singapore Index, EWS
-0.73% , LargeCap Value Russell 1000 iS, IWD
-0.74% , SmallCap Blend Russell 2000 iS, IWM
-0.76% , Value LargeCap Dynamic PS, PWV
-0.77% , LargeCap Value S&P 500 iS, IVE
-0.82% , China LargeCap Growth G D H USX PS, PGJ
-0.82% , Energy & Nat Res iS GS, IGE
-0.82% , Semiconductor SPDR, XSD
-0.85% , Oil Fund PowerShares, DBO
-0.85% , SmallCap Value Russell 2000 iS, IWN
-0.87% , Health Care SPDR, XLV
-0.90% , DIAMONDS (DJIA), DIA
-0.96% , Global LargeCap Blend MSCI iS, ACWI
-0.96% , Switzerland Index, EWL
-0.97% , Pacific ex-Japan, EPP
-0.97% , Emerging 50 BLDRS, ADRE
-0.98% , Microcap Russell, IWC
-1.01% , Brazil Index, EWZ
-1.07% , Sweden Index, EWD
-1.07% , Australia Index, EWA
-1.08% , Financials VIPERs, VFH
-1.08% , Italy Index, EWI
-1.14% , United Kingdom Index, EWU
-1.17% , Global ex U.S. LargeCap Blend, ACWX
-1.17% , Financial SPDR, XLF
-1.19% , Energy Global, IXC
-1.23% , Capital Markets KWB ST, KCE
-1.29% , Energy SPDR, XLE
-1.31% , Energy DJ, IYE
-1.31% , Belgium Index, EWK
-1.31% , Financial DJ US, IYF
-1.33% , Global 100, IOO
-1.37% , Europe 350 S&P Index, IEV
-1.40% , Energy VIPERs, VDE
-1.41% , European VIPERs, VGK
-1.41% , Consumer Discretionary SPDR, XLY
-1.45% , Growth EAFE MSCI, EFG
-1.45% , SmallCap Blend EAFE MSCI iS, SCZ
-1.48% , Dividend ex-U.S. DJ iS, IDV
-1.49% , Networking, IGN
-1.54% , Financial Services DJ, IYG
-1.63% , Frontier Markets Guggenheim , FRN
-1.65% , France Index, EWQ
-1.66% , Value EAFE MSCI, EFV
-1.70% , Netherlands Index, EWN
-1.70% , Foreign LargeCap EAFE MSCI iS, EFA
-1.74% , Pacific VIPERs, VPL
-1.78% , EMU Europe Index, EZU
-1.79% , Spain Index, EWP
-1.84% , Germany Index, EWG
-2.30% , Biotech SPDR, XBI
-2.40% , Austria Index, EWO
-2.62% , Japan Index, EWJ
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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
1812.42, 50-day SMA
The S&P 500 Composite Potential Support
1767.99, low of 12/18/2013
1760.64, low of 11/13/2013
1746.20, low of 11/7/2013
1740.50, low of 10/23/2013
1729.86, high of 9/19/2013
1711.57, high of 10/15/2013
1709.67, high of 8/2/2013
1706.44, 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
