Stocks finished mostly lower on Tuesday on below-average trading volume. SPX fell below its lowest lows of the previous 15 weeks, down to its lowest level since 8/3/12. The S&P 500 (SPX: 1,374.53) fell more 6% since 9/14/12, based on closing prices.
The technical condition of the stock market does not support the excessive optimism that the bullish majority of stock investors and traders clearly exhibited over the past several months. Typically, action is followed by reaction, and so a downside shakeout or correction has produced losses for bullish investors starting from the second trading day after the latest Fed Quantitative Easing was announced on 9/13/12. The Bears have momentum on their side, at least for the short term and medium term–and perhaps beyond. Choosing safety over risk still appears to be the most reasonable approach for conservative traders and investors.
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*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 6 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 Dow-Jones Industrial Average rose above its closing price highs of the previous 4-years on 10/5/12, but the Dow-Jones Transportation Average has remained relatively weak, substantially below its 2012 high, thereby demonstrating non confirmation and bearish divergence.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) turned systematically bearish on 11/7/11 when the 50-day SMA fell below the 200-day SMA.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) turned systematically neutral on 9/13/12, when it rose above 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) turned systematically neutral on 9/13/12, when it rose above its 50-day SMA. The 50-day SMA has remained below the 200-day SMA every day since 2/3/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) turned systematically neutral again on 10/10/12, when it whipsawed back up above its 50-day SMA. Longer term, the 50-day SMA has remained below the 200-day SMA every day since 1/14/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) turned systematically neutral on 10/11/12 when it fell below its 50-day SMA. OEF/SPY fell below its 200-day SMA on 11/7/11. 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 stability and 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 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 50-day SMA on 10/12/12, thereby turning systematically bearish again. IWM/SPY fell below its 200-day SMA on 9/24/12, 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) whipsawed back up above its 50-day SMA on 10/23/12, thereby turning systematically neutral again. Longer term, the MDY/SPY 50-day SMA has been below the 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
1474.51, high of 9/14/2012
1464.02, high of 10/18/2012
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1432.39, 50-day SMA
1434.27, high of 11/2/2012
1430.53, low of 9/26/2012
1425.53, low of 10/12/2012
1425.48, Fibonacci 23.6% of June-Sept 2012 range
1422.38, high of 4/2/2012
1422.06, low of 10/22/2012
1421.12, high of 10/25/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
1403.28, low of 10/26/12
1396.56, low of 9/4/2012
1395.14, Fibonacci 38.2% of June-Sept 2012 range
1391.04, low of 8/6/2012
1388.71, low of 5/3/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1380.39, high of 7/19/2012
1381.58, 200-day SMA
1374.81, high of 7/3/2012
The S&P 500 Composite Potential Support
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
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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Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) turned systematically bullish on 11/7/12 when price rose above its 50-day SMA. TLT remains above its 200-day SMA, and TLT’s 50-day SMA has remained above the 200-day SMA every day since 6/24/11. Support 119.87, 118.05, 117.44, 115.69, 114.82, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance: 127.72, 130.69, and 132.22.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) turned systematically bullish on 11/7/12 when price rose above its 50-day SMA. IEF remains above its 200-day SMA, and IEF’s 50-day SMA has remained above the 200-day SMA every day since 6/21/11. Support 106.59, 106.42, 105.84, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance: 109.32 and 109.89.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below its 50-day SMA on 9/25/12, thereby turning systematically bearish again. JNK/LQD fell below its 200-day SMA on 9/20/12. JNK/LQD 50-day SMA has remained consistently below the 200-day SMA every day since 6/1/12.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) turned systematically neutral on 11/14/12 when it fell below its 50-day SMA. TIP/IEF rose above its 200-day SMA on 9/27/12, and the 50-day SMA rose above the 200-day SMA on 10/10/12.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) turned systematically neutral on 11/2/12 when price 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 21.86, 21.57, 21.07, and 20.84. Resistance 22.36, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below its lows of the previous 4 months on 11/13/12. DBA turned systematically neutral on 9/17/12 when price crossed below its 50-day SMA. DBA price fell below its 200-day SMA on 11/12/12. The 50-day SMA remains above the 200-day SMA, but the 50-200 spread has been narrowing gradually.
Crude Oil, United States Oil ETF (USO) fell below its lows of the previous 4 months on 11/7/12, confirming its preexisting bearish trend. USO turned systematically bearish on 9/19/12, when price fell below 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 29.02, 26.28, and 22.74. Resistance 32.88, 34.70, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) fell below its lows of the previous 2 months on 11/2/12, confirming its preexisting corrective trend. GLD turned systematically neutral on 10/23/12, when price fell below its 50-day SMA. GLD price rose above its 200-day SMA on 8/22/12. GLD 50-day SMA rose above the 200-day SMA on 9/20/12. Support: 162.30, 159.56, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 168.54, 174.07, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) turned systematically neutral on 11/5/12 when it fell below its 50-day SMA. GDX/GLD fell below its 200-day SMA on 11/12/12. The 50-day SMA has been above the 200-day SMA since 10/19/12.
Silver, iShares Silver Trust ETF (SLV) fell below its lows of the previous 2 months on 11/2/12, confirming its preexisting corrective trend. SLV fell below its 50-day SMA on 10/19/12, thereby turning systematically neutral. SLV whipsawed back above its 200-day SMA on 11/5/12, and the 50-day SMA crossed above the 200-day SMA on 10/1/12. Support 29.84, 29.28, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 32.23, 33.23, 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 2 months on 11/2/12, confirming its preexisting corrective trend. SLV/GLD fell below its 50-day SMA on 10/19/12, thereby turning systematically neutral again. SLV/GLD has been trading around its 200-day SMA since 10/23/12. Longer term, SLV/GLD 50-day SMA crossed above the 200-day SMA on 10/9/12.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the previous 10 weeks on 11/9/12. JJC price fell below its 50-day SMA on 10/22/12 and fell below its 200-day SMA on 10/19/12. “Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, and so this price weakness may be taken as a warning about economic conditions ahead.
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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
5.03% , AMD , ADV MICRO DEV
3.89% , WOR , WORTHINGTON INDS
2.81% , MJN , Mead Johnson Nutrition
3.63% , HD , HOME DEPOT
0.87% , ITF , Japan LargeCap Blend TOPIX 150, ITF
2.26% , CPB , CAMPBELL SOUP
2.56% , SEE , SEALED AIR
2.66% , TJX , TJX
2.52% , ROST , Ross Stores Inc
1.98% , SJM , J. M. Smucker
1.44% , SPLS , STAPLES
1.61% , URBN , Urban Outfitters Inc.
2.07% , D , DOMINION RSCS
1.82% , LXK , LEXMARK INTL STK A
1.90% , LTD , LIMITED BRANDS
3.14% , MU.O , MICRON TECH
0.20% , EPU , Peru MSCI iS, EPU
0.86% , SLB , SCHLUMBERGER
1.31% , TUP , TUPPERWARE
2.19% , EFX , EQUIFAX
0.92% , TMO , THERMO ELECTRON
0.98% , ROK , ROCKWELL AUTOMAT
1.62% , ABC , AMERISOURCEBERGN
0.18% , AGG , Bond, Aggregate, AGG
0.45% , DOG , Short 100% Dow 30, DOG
0.87% , SO , SOUTHERN
0.41% , IDX , Indonesia MV, IDX
1.28% , QID , Short 200% QQQ PS, QID
0.74% , APD , AIR PRODS & CHEM
4.47% , OMX , OFFICEMAX INC., OMX
0.28% , TUR , Turkey MSCI iS, TUR
0.87% , DXD , Short 200% Dow 30 PS, DXD
0.67% , DTE , DTE ENERGY
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-19.03% , MBI , MBIA
-5.74% , BIDU , Baidu, Inc., BIDU
-4.95% , BIG , BIG LOTS
-11.28% , NIHD , NII Holdings, Inc.
-2.40% , PNC , PNC FINL SVC
-4.01% , MSFT , MICROSOFT
-3.28% , JNS , JANUS CAPITAL
-2.42% , RSX , Russia MV, RSX
-0.68% , IGM , Technology GS, IGM
-2.00% , EWT , Taiwan Index, EWT
-2.18% , OXY , OCCIDENTAL
-2.34% , INTC , INTEL
-1.56% , FXI , China 25 iS, FXI
-1.20% , ERIC.O , LM Ericsson Telephone Company
-1.93% , XME , Metals & Mining SPDR, XME
-1.18% , EWA , Australia Index, EWA
-2.53% , GNW , GENWORTH FINANCIAL
-1.90% , ZION , ZIONS
-0.61% , EWS , Singapore Index, EWS
-1.04% , XLNX , XILINX
-0.45% , IYH , Healthcare DJ, IYH
-0.69% , HOLX , Hologic, Inc., HOLX
-1.72% , AES , AES
-1.00% , DDM , Ultra Dow30 Double, DDM
-0.83% , EWH , Hong Kong Index, EWH
-1.97% , AIG , AMER INTL GROUP
-1.84% , MTB , M&T BANK
-1.81% , NTAP , NETWK APPLIANCE
-1.58% , VRSN , VeriSign Inc
-0.97% , CNP , CENTERPNT ENERGY
-0.76% , JKL , Value SmallCap iS M, JKL
-0.75% , IYW , Technology DJ US, IYW
-1.09% , LVLT.K , LEVEL 3 COMMUNICATIONS
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
0.56% Mexico Index, EWW
0.47% Biotech SPDR, XBI
0.41% Indonesia MV, IDX
0.41% Utilities VIPERs, VPU
0.38% Utilities SPDR, XLU
0.33% Bond, 20+ Years Treasury, TLT
0.29% Consumer Discretionary SPDR, XLY
0.28% Turkey MSCI iS, TUR
0.28% Bear, Short S&P 500, SH
0.19% Spain Index, EWP
0.18% Bond, Intermediate US Aggregate iS, AGG
0.12% Bond, 10 Year Treasury, IEF
0.11% Japan Index, EWJ
0.10% Silver Trust iS, SLV
0.05% Financial Preferred, PGF
0.04% Bond, Long-Term Corp iBoxx iS, LQD
0.04% Homebuilders SPDR, XHB
0.04% Realty Cohen & Steers, ICF
0.01% Bond, 1-3 Year Treasury, SHY
0.00% Malaysia Index, EWM
0.00% Growth MidCap Russell, IWP
0.00% Bond Treasury Short-Term iS, SHV
-0.03% MidCap S&P 400 SPDRs, MDY
-0.03% REIT Wilshire, RWR
-0.03% Bond Ex-US Treas, BWX
-0.06% Consumer Staples SPDR, XLP
-0.08% REIT VIPERs, VNQ
-0.08% Bond, Muni S&P ATM-Free iS, MUB
-0.08% Switzerland Index, EWL
-0.09% Dividend SPDR, SDY
-0.10% Bond, Emerg Mkt JPM iS, EMB
-0.11% Transportation Av DJ, IYT
-0.11% Bond, TIPS U.S. Treasury iS, TIP
-0.13% Dividend U.S. DJ iS, DVY
-0.15% Preferred Stock iS, PFF
-0.15% MidCap Growth S&P 400 iS, IJK
-0.16% Water Resources, PHO
-0.16% Netherlands Index, EWN
-0.17% Italy Index, EWI
-0.17% Materials SPDR, XLB
-0.17% Dividend Appreciation Vipers, VIG
-0.18% Commodity Tracking, DBC
-0.20% Growth VIPERs, VUG
-0.21% Gold Shares S.T., GLD
-0.23% India PS, PIN
-0.23% Bond, High Yield Corp iBoxx iS, HYG
-0.24% MidCap Russell, IWR
-0.25% LargeCap Growth Russell 1000 iS, IWF
-0.26% MidCap Blend S&P 400 iS, IJH
-0.28% Industrial SPDR, XLI
-0.30% LargeCap Growth S&P 500 iS, IVW
-0.30% MidCap Value S&P 400 iS, IJJ
-0.30% Bond, High-Yield Junk, JNK
-0.31% LargeCap Blend S&P=Weight R, RSP
-0.32% Real Estate US DJ iS, IYR
-0.32% Dividend High Yield Equity PS, PEY
-0.33% Europe 350 S&P Index, IEV
-0.33% Value MidCap Russell, IWS
-0.34% LargeCap Blend Russell 1000 iS, IWB
-0.34% S&P 500 SPDRs LargeCap Blend, SPY
-0.35% Agriculture DB PS, DBA
-0.35% LargeCap Blend Russell 3000 iS, IWV
-0.36% Basic Materials DJ US, IYM
-0.38% LargeCap VIPERs, VV
-0.38% Pacific VIPERs, VPL
-0.38% Health Care SPDR, XLV
-0.38% Blend Total Market VIPERs, VTI
-0.39% Latin Am 40, ILF
-0.39% Global 100, IOO
-0.39% Growth EAFE MSCI, EFG
-0.40% LargeCap Blend S&P 500 iS, IVV
-0.40% DIAMONDS (DJIA), DIA
-0.40% SmallCap Growth Russell 2000 iS, IWO
-0.41% LargeCap Blend S&P 100, OEF
-0.41% LargeCap Value Russell 1000 iS, IWD
-0.42% Energy SPDR, XLE
-0.44% Growth SmallCap VIPERs, VBK
-0.44% LargeCap Value S&P 500 iS, IVE
-0.47% EMU Europe Index, EZU
-0.47% Telecom DJ US, IYZ
-0.47% Value LargeCap Dynamic PS, PWV
-0.48% Technology SPDR, XLK
-0.48% Foreign LargeCap EAFE MSCI iS, EFA
-0.49% SmallCap Blend S&P 600 iS, IJR
-0.50% Global LargeCap Blend MSCI iS, ACWI
-0.51% Value VIPERs, VTV
-0.51% Value EAFE MSCI, EFV
-0.51% European VIPERs, VGK
-0.52% France Index, EWQ
-0.52% United Kingdom Index, EWU
-0.52% Oil Fund PowerShares, DBO
-0.53% SmallCap Value S&P 600 iS, IJS
-0.53% Small Cap VIPERs, VB
-0.55% India Earnings WTree, EPI
-0.56% Global ex U.S. LargeCap Blend, ACWX
-0.56% SmallCap Growth S&P 600 iS, IJT
-0.56% Belgium Index, EWK
-0.56% Energy VIPERs, VDE
-0.57% SmallCap Blend Russell 2000 iS, IWM
-0.57% Oil, Crude, U.S. Oil Fund, USO
-0.57% Value SmallCap VIPERS, VBR
-0.57% South Africa Index, EZA
-0.59% Energy & Nat Res iS GS, IGE
-0.61% Singapore Index, EWS
-0.61% Canada Index, EWC
-0.61% Info Tech VIPERs, VGT
-0.62% Financials VIPERs, VFH
-0.64% Energy Global, IXC
-0.64% Financial DJ US, IYF
-0.65% Microcap Russell, IWC
-0.65% Energy DJ, IYE
-0.67% Dividend International, PID
-0.68% Financial SPDR, XLF
-0.68% SmallCap Value Russell 2000 iS, IWN
-0.69% QQQ Nasdaq 100 Trust, QQQ
-0.70% Semiconductor SPDR, XSD
-0.74% Capital Markets KWB ST, KCE
-0.75% Technology DJ US, IYW
-0.76% Semiconductor iS IGW, SOXX
-0.83% Hong Kong Index, EWH
-0.84% SmallCap Blend EAFE MSCI iS, SCZ
-0.85% Dividend ex-U.S. DJ iS, IDV
-0.88% Brazil Index, EWZ
-0.90% Financial Services DJ, IYG
-0.91% Emerging Markets MSCI iS, EEM
-0.92% Frontier Markets Guggenheim , FRN
-0.92% Thailand MSCI iS, THD
-0.94% Emerging VIPERs, VWO
-0.94% Germany Index, EWG
-0.95% South Korea Index, EWY
-1.04% Emerging 50 BLDRS, ADRE
-1.11% Chile MSCI iS, ECH
-1.12% Pacific ex-Japan, EPP
-1.18% Networking, IGN
-1.18% Australia Index, EWA
-1.35% Sweden Index, EWD
-1.56% China 25 iS, FXI
-1.69% China LargeCap Growth G D H USX PS, PGJ
-1.70% Austria Index, EWO
-1.93% Metals & Mining SPDR, XME
-2.00% Taiwan Index, EWT
-2.13% WilderHill Clean Energy PS, PBW
-2.42% Russia MV, RSX
