Technology stock sector ETF Relative Strength Ratio (XLK/SPY) turned systematically bearish again on 1/3/13, when it whipsawed back down below its 50-day SMA.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) turned systematically bearish again on 1/3/13, when it whipsawed back down below its 50-day SMA.
VIX Fear Index collapsed to 14.24 on 1/3/13 from 23.23 on 12/28/12. This indicates a rapid shift to bullish complacency from worried concern.
The Dow-Jones Transportation Average rose further above its 2012 highs, but the Dow-Jones Industrial Average remained below its 2012 highs, thereby demonstrating non confirmation and bearish divergence.
The S&P 500 (SPX: 1,459.37) fell 3.05 points or 0.21% on Thursday. SPX appears to have encountered technical resistance as it approached its September-October highs.
Investor sentiment data indicated alarming degrees of optimism and bullish complacency in December, matching extremes in September, 2012, when the stock price indexes topped out. Elevated levels of optimism are bearish because when the majority is extremely bullish, investors are already fully invested in the market. Once everyone who is going to buy has already bought, stocks are vulnerable to a downside shakeout. The pendulum of emotion tends to swing too far in one direction, but market mood always reverts to the mean.
The Art of Contrary Thinking calls for questioning popular optimism. I have been skeptical that SPX would be able to overcome technical resistance around its September-October highs. The technical condition of the stock market has not supported the excessive optimism that the bullish majority of stock investors and traders clearly exhibit now and over the past several months. Long-term momentum has been showing bearish divergence and has weakened considerably since the S&P 500 price peak on 9/14/12. And the bull phase of the 4-year cycle is long in tooth. Choosing safety over risk still appears to be the most reasonable approach for conservative traders and investors.
Our clients’ separately managed accounts made gains in 6 of the past 7 consecutive quarters; see:
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9 major U.S. stock sectors ranked in order of long-term relative strength:
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
1474.51, high of 9/14/2012
1464.02, high of 10/18/2012
The S&P 500 Composite Potential Support
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
1425.48, Fibonacci 23.6% of June-Sept ’12 range
1424.41, Fibonacci 61.8% of Sept-Nov ’12 range
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
1411.52, 50-day SMA
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
1395.14, Fibonacci 38.2% of June-Sept 2012 range
1391.04, low of 8/6/2012
1390.67, 200-day SMA
1388.71, low of 5/3/2012
1385.43, low of 11/28/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1370.62, Fibonacci 50.0% of June-Sept 2012 range
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
1346.11, Fibonacci 61.8% of June-Sept 2012 range
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
1311.20, Fibonacci 78.6% of June-Sept 2012 range
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
1257.58, Fibonacci 61.8% of 2011 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
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
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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Tangible Assets, Commodities
U.S. dollar ETF (UUP) turned systematically neutral again on 1/3/13 when it rose above its 50-day SMA. UUP fell below its 200-day SMA on 8/31/12, and the 50-day SMA fell below the 200-day SMA on 10/2/12. Support 21.57, 21.07, and 20.84. Resistance 22.05, 22.30, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price fell below its lows of the previous 6 months on 12/31/12. DBA turned systematically neutral on 11/30/12 when price crossed back down below its 50-day SMA. The 50-day SMA remains above the 200-day SMA, although the 50-200 spread has been narrowing, and the two SMAs could cross in weeks ahead.
Crude Oil, United States Oil ETF (USO) price rose above its highs of the previous 2 months on 1/2/13. USO turned systematically neutral on 12/26/12, when price rose back above its 50-day SMA. USO price fell below its 200-day SMA on 9/17/12, and the 50-day SMA has remained below its 200-day SMA consistently every day since 6/7/12. Support 31.00, 29.02, 26.28, and 22.74. Resistance 34.70, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) price fell below its lows of the previous 4 months on 12/20/12. GLD turned systematically neutral on 11/27/12, when price fell below its 50-day SMA. Support: 158.39, 157.40, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 164.14, 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 bearish on 12/27/12 when the 50-day SMA crossed below the 200-day SMA.
Silver, iShares Silver Trust ETF (SLV) price fell below its lows of the previous 4 months on 12/20/12. SLV turned systematically neutral on 12/13/12 when it fell below its 50-day SMA. Support 28.65, 27.97, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 30.03, 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 4 months on 12/20/12. SLV/GLD turned systematically neutral on 12/14/12 when it fell below its 50-day SMA.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) turned systematically neutral on 12/26/12, when it rose above its 50-day SMA. Long term, JJC has been consolidating losses in Triangle chart pattern trading range between 38.99 and 51.41 for more than a year since October 2011. “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
6.40% , RIG , TRANSOCEAN
7.97% , ROST , Ross Stores Inc
9.43% , KWT , Solar Energy MV, KWT
0.91% , PXJ , Oil & Gas, PXJ
3.82% , RDC , ROWAN COMPANIES
7.49% , LXK , LEXMARK INTL STK A
2.30% , GPS , GAP
3.60% , SVU , SUPERVALU
3.73% , AVP , AVON
2.83% , RYAAY , Ryanair Holdings plc
2.66% , TBT , 200% Short US T Bond, TBT
1.73% , KSU , Kansas City Southern, KSU
3.42% , PWER , POWER ONE
4.07% , MU.O , MICRON TECH
1.97% , F , FORD MOTOR
2.39% , LUV , SOUTHWEST AIRLS
2.39% , MRK , MERCK & CO
2.50% , AN , AUTONATION
2.48% , DELL , DELL
1.68% , HAL , HALLIBURTON
2.91% , GNW , GENWORTH FINANCIAL
1.28% , CMA , COMERICA
1.17% , HMA , HEALTH MGMT STK A
1.66% , MJN , Mead Johnson Nutrition
0.74% , PTEN , Patterson-UTI Energy Inc
2.67% , THC , TENET HEALTHCARE
1.10% , TMK , TORCHMARK
0.82% , TXT , TEXTRON
2.65% , AGN , ALLERGAN
3.27% , TJX , TJX
1.35% , NBR , NABORS
1.94% , HIG , HARTFORD FINL
1.26% , PXN , Nanotech Lux, PXN
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-12.96% , FDO , FAMILY DLR STRS
-4.18% , CHKP , Check Point Software Technologies Ltd
-4.68% , UNH , UNITEDHEALTH GRP
-5.68% , LTD , LIMITED BRANDS
-1.43% , BIIB , BIOGEN IDEC
-1.23% , FMCN , Focus Media, FMCN
-3.27% , WLP , WELLPOINT HEALTH
-2.81% , WAT , WATERS
-3.20% , HUM , HUMANA
-0.86% , EWS , Singapore Index, EWS
-1.38% , TAP , ADOLPH COORS STK B, TAP
-1.05% , DLTR , Dollar Tree Stores Inc
-2.48% , SLV , Silver Trust iS, SLV
-0.92% , BWX , Bond Ex-US Treas, BWX
-2.53% , AFL , AFLAC
-0.99% , EFV , Value EAFE MSCI, EFV
-1.21% , GLD , Gold Shares S.T., GLD
-2.12% , AET , AETNA
-0.49% , FHN , First Horizon National
-0.09% , RSP , LargeCap Blend S&P=Weight R, RSP
-0.58% , VWO , Emerging VIPERs, VWO
-0.01% , GVI , Bond Interm U.S. Gov, GVI
-1.25% , CCL , CARNIVAL STK A
-2.15% , STI , SUNTRUST BANKS
-1.01% , EWT , Taiwan Index, EWT
-1.40% , USB , US BANCORP
-0.67% , VAW , Materials VIPERs, VAW
-0.55% , AES , AES
-1.36% , TLT , Bond, 20+ Years Treasury, TLT
-0.34% , PBE , Biotech & Genome, PBE
-0.22% , IWZ , Growth LargeCap Russell 3000, IWZ
-3.24% , SIL , Silver Miners Global X, SIL
-1.25% , IAU , Gold COMEX iS, IAU
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
3.53% WilderHill Clean Energy PS, PBW
0.81% Latin Am 40, ILF
0.75% Frontier Markets Guggenheim , FRN
0.73% Transportation Av DJ, IYT
0.64% Brazil Index, EWZ
0.41% Dividend High Yield Equity PS, PEY
0.41% Biotech SPDR, XBI
0.29% Homebuilders SPDR, XHB
0.27% MidCap Value S&P 400 iS, IJJ
0.25% Preferred Stock iS, PFF
0.25% Consumer Discretionary SPDR, XLY
0.20% China LargeCap Growth G D H USX PS, PGJ
0.19% Value SmallCap VIPERS, VBR
0.15% Dividend Appreciation Vipers, VIG
0.14% Health Care SPDR, XLV
0.13% Emerging 50 BLDRS, ADRE
0.11% Financial Preferred, PGF
0.08% REIT Wilshire, RWR
0.08% Value MidCap Russell, IWS
0.07% Dividend SPDR, SDY
0.06% Bear, Short S&P 500, SH
0.05% Industrial SPDR, XLI
0.04% MidCap Blend S&P 400 iS, IJH
0.04% Energy VIPERs, VDE
0.03% Capital Markets KWB ST, KCE
0.02% Bond, Muni S&P ATM-Free iS, MUB
0.01% SmallCap Growth S&P 600 iS, IJT
0.00% Utilities SPDR, XLU
0.00% Real Estate US DJ iS, IYR
0.00% Bond, 1-3 Year Treasury, SHY
0.00% Bond Treasury Short-Term iS, SHV
-0.02% REIT VIPERs, VNQ
-0.02% Growth MidCap Russell, IWP
-0.02% Financial DJ US, IYF
-0.02% Energy SPDR, XLE
-0.03% Dividend U.S. DJ iS, DVY
-0.04% SmallCap Growth Russell 2000 iS, IWO
-0.05% Chile MSCI iS, ECH
-0.05% SmallCap Blend S&P 600 iS, IJR
-0.06% MidCap Growth S&P 400 iS, IJK
-0.06% Small Cap VIPERs, VB
-0.06% Realty Cohen & Steers, ICF
-0.07% Energy DJ, IYE
-0.07% MidCap S&P 400 SPDRs, MDY
-0.08% Growth SmallCap VIPERs, VBK
-0.09% Financials VIPERs, VFH
-0.09% Turkey MSCI iS, TUR
-0.09% Financial SPDR, XLF
-0.09% Bond, Emerg Mkt JPM iS, EMB
-0.09% LargeCap Blend S&P=Weight R, RSP
-0.09% MidCap Russell, IWR
-0.10% LargeCap Value S&P 500 iS, IVE
-0.10% LargeCap Blend Russell 3000 iS, IWV
-0.10% Utilities VIPERs, VPU
-0.10% DIAMONDS (DJIA), DIA
-0.11% Semiconductor SPDR, XSD
-0.12% Value VIPERs, VTV
-0.13% LargeCap Blend S&P 500 iS, IVV
-0.13% SmallCap Value S&P 600 iS, IJS
-0.15% Blend Total Market VIPERs, VTI
-0.15% LargeCap Value Russell 1000 iS, IWD
-0.15% LargeCap Blend Russell 1000 iS, IWB
-0.16% LargeCap VIPERs, VV
-0.18% Mexico Index, EWW
-0.20% Financial Services DJ, IYG
-0.20% Malaysia Index, EWM
-0.22% Bond, High-Yield Junk, JNK
-0.22% S&P 500 SPDRs LargeCap Blend, SPY
-0.22% Value LargeCap Dynamic PS, PWV
-0.23% SmallCap Blend Russell 2000 iS, IWM
-0.24% Oil, Crude, U.S. Oil Fund, USO
-0.24% LargeCap Blend S&P 100, OEF
-0.24% SmallCap Value Russell 2000 iS, IWN
-0.25% Consumer Staples SPDR, XLP
-0.25% Bond, Intermediate US Aggregate iS, AGG
-0.27% LargeCap Growth Russell 1000 iS, IWF
-0.27% LargeCap Growth S&P 500 iS, IVW
-0.28% Microcap Russell, IWC
-0.28% Telecom DJ US, IYZ
-0.28% Energy & Nat Res iS GS, IGE
-0.29% Growth VIPERs, VUG
-0.31% Oil Fund PowerShares, DBO
-0.31% Bond, High Yield Corp iBoxx iS, HYG
-0.32% Agriculture DB PS, DBA
-0.37% Dividend International, PID
-0.43% Global LargeCap Blend MSCI iS, ACWI
-0.47% Energy Global, IXC
-0.47% Australia Index, EWA
-0.50% Bond, 10 Year Treasury, IEF
-0.52% QQQ Nasdaq 100 Trust, QQQ
-0.54% Bond, Long-Term Corp iBoxx iS, LQD
-0.55% India Earnings WTree, EPI
-0.58% Emerging VIPERs, VWO
-0.59% Info Tech VIPERs, VGT
-0.61% Global 100, IOO
-0.62% China 25 iS, FXI
-0.64% Technology SPDR, XLK
-0.65% Russia MV, RSX
-0.68% Semiconductor iS IGW, SOXX
-0.68% Bond, TIPS U.S. Treasury iS, TIP
-0.71% Emerging Markets MSCI iS, EEM
-0.73% Technology DJ US, IYW
-0.73% Materials SPDR, XLB
-0.76% Basic Materials DJ US, IYM
-0.80% SmallCap Blend EAFE MSCI iS, SCZ
-0.82% Pacific VIPERs, VPL
-0.83% Commodity Tracking, DBC
-0.85% Water Resources, PHO
-0.85% Sweden Index, EWD
-0.86% Pacific ex-Japan, EPP
-0.86% Indonesia MV, IDX
-0.86% Singapore Index, EWS
-0.87% Canada Index, EWC
-0.88% United Kingdom Index, EWU
-0.89% Global ex U.S. LargeCap Blend, ACWX
-0.90% Japan Index, EWJ
-0.92% Bond Ex-US Treas, BWX
-0.95% India PS, PIN
-0.97% Metals & Mining SPDR, XME
-0.98% Foreign LargeCap EAFE MSCI iS, EFA
-0.98% Growth EAFE MSCI, EFG
-0.99% Value EAFE MSCI, EFV
-1.01% Taiwan Index, EWT
-1.03% Austria Index, EWO
-1.08% Spain Index, EWP
-1.10% Italy Index, EWI
-1.12% Dividend ex-U.S. DJ iS, IDV
-1.14% Switzerland Index, EWL
-1.17% European VIPERs, VGK
-1.21% Gold Shares S.T., GLD
-1.21% Netherlands Index, EWN
-1.22% Belgium Index, EWK
-1.35% Europe 350 S&P Index, IEV
-1.36% Bond, 20+ Years Treasury, TLT
-1.38% South Africa Index, EZA
-1.39% EMU Europe Index, EZU
-1.41% Hong Kong Index, EWH
-1.52% France Index, EWQ
-1.56% Germany Index, EWG
-1.65% Thailand MSCI iS, THD
-1.71% South Korea Index, EWY
-1.71% Networking, IGN
-2.48% Silver Trust iS, SLV
