Risk of a Further Downside Price Correction?

Materials stock sector Relative Strength Ratio (XLB/SPY) whipsawed back down below its 50-day SMA, turning systematically bearish again.

Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) whipsawed back down below its 50-day SMA, turning systematically bearish again.

The S&P 500 (SPX: 1,352.46) fell 2.22 points or 0.16% on Monday. NYSE volume rose 6% but remained at a very low level, suggesting tepid demand for stocks.

For months, I have been noting here a general tendency for rising volume on price declines and shrinking volume on price advances. This is a divergence that suggests a bearish demand-supply balance for stocks.

Risk of a further downside price correction probably exceeds upside potential for the short term.

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Equity Mutual Funds lost 6% in 2011, according to Lipper Research Services.
Hedge funds lost 5%, according to COO Connect.
Hedge funds suffered their second-worst year on record in 2011, according to an index maintained by Eurekahedge, an independent research firm that specializes in hedge fund data. Some of the world’s largest and best-known hedge funds suffered huge losses, down 20% to 50%.

But not all money managers were down in 2011; see:
Robert W. Colby Asset Management, Inc. (click here).

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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
1440.24, high of 5/19/2008
1422.38, high of 4/2/2012
1415.32, high of 5/1/2012
1389.07, Fibonacci 78.6% of April-June 2012 range
1388.71, low of 5/3/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1374.81, high of 7/3/2012
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1362.93, Fibonacci 61.8% of April-June 2012 range
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012

The S&P 500 Composite Potential Support
1344.56, Fibonacci 50% of April-June 2012 range
1340.34, Fibonacci 23.6% of 2011-12 range
1340.03, low of 3/6/2012
1339.28, 50-day SMA
1335.52, high of 6/11/2012
1334.93, high of 5/31/2012
1329.05, high of 6/7/2012
1328.49, high of 5/22/2012
1326.19, Fibonacci 38.2% of April-June 2012 range
1306.62, low of 6/12/2012
1303.47, Fibonacci 23.6% of April-June 2012 range
1291.98, low of 5/18/2012
1289.59, Fibonacci 38.2% of 2011-12 range
1302.73, 200-day SMA
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
1248.58, Fibonacci 50.0% of 2011-12 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
1207.56, Fibonacci 61.8% of 2011-12 range
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
1149.16, Fibonacci 78.6% R of 2011-12 range
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 7-10 Year U.S. Treasury ETF (IEF) remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA every day since 6/21/11. Support 107.51, 107.43, 105.85, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance 109.37.

Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) whipsawed back down below its 50-day SMA again on 7/6/12, thereby turning systematically bearish again. JNK/LQD remains below its 200-day SMA. The 50-day SMA fell below the 200-day SMA on 6/1/12.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below its lows of the previous 9 months on 7/2/12, reconfirming its major downtrend and suggesting disinflation or deflation. TIP/IEF is systematically bearish: below its 50-day SMA, below its 200-day SMA, and the 50-day SMA crossed below the 200-day SMA on 6/27/12.
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) price remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA. Support 22.38, 22.14, 21.89, 21.74, 21.58, 21.07, and 20.84. Resistance 23.02, 23.52, 25.84, 27.19, 28.97.

CRB Commodity Price Index whipsawed back above its 50-day SMA on 7/2/12, thereby turning systematically neutral again. CRB remains below its 200-day SMA, and the 50-day SMA has remained below the 200-day SMA every day since 8/18/11.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) rose above its 200-day SMA on 7/3/12 and remains neutral: above its 50-day SMA, above its 200-day SMAs, and the 50-day SMA has been consistently below the 200-day SMA every day since 8/8/11.

Crude Oil, United States Oil ETF (USO) turned systematically bearish on 6/7/12, when the 50-day SMA fell below the 200-day SMA. USO remains below its 50-day and 200-day SMAs. Support 29.02, 26.28, and 22.74. Resistance 33.08, 33.66, 34.76, 35.19, 36.97, 40.29, 41.38, 42.30, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) whipsawed back down below its 50-day SMA again on 7/6/12, thereby turning systematically bearish again. GLD remains below its 200-day SMA, and its 50-day SMA remains below its 200-day SMA. Support: 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 159.20, 162.18, 163.20, 164.89, 166.57, 174.00, 175.46, 177.40, and 185.85.

Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) whipsawed back down below its 50-day SMA on 7/9/12, turning systematically bearish again. GDX/GLD remains below its 200-day SMA, and the 50-day SMA has remained bearishly below the 200-day SMA every day since 2/22/11.

Silver, iShares Silver Trust ETF (SLV) fell below its lows of the previous 19 months on 6/28/12, thereby confirming its preexisting major bearish trend. SLV remains systematically bearish: below its 50-day and 200-day SMAs, and with the 50-day SMA below the 200-day SMA every day since 10/27/11. Support 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 27.98, 28.26, 29.02, 30.52, 31.64, 32.34, 33.44, 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 20 months on 6/28/12, reconfirming its major downtrend. SLV/GLD remains systematically bearish: below its 50-day SMA, below its 200-day SMA, and the 50-day SMA has remained below the 200-day SMA every day since 8/30/11.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) whipsawed back down below its 50-day SMA on 7/5/12, thereby turning systematically bearish again. JJC remains below its 200-day SMA, and its 50-day SMA remains below its 200-day SMA. In addition, JJC remains far below its 2011 high at 61.69 and has underperformed the stock market since JJC peaked at 51.41 on 2/9/12. Given that “Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, this weakness may be suggesting rising doubts about prospects going forward.
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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 revealed to be deal stocks, sooner or later, 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
0.51% , EWO , Austria Index, EWO
3.41% , WLP , WELLPOINT HEALTH
0.35% , VOX , Telecom Services VIPERs, VOX
1.65% , DBO , Oil Fund PowerShares, DBO
1.49% , MRK , MERCK & CO
0.33% , PXJ , Oil & Gas, PXJ
1.47% , SIRI , Sirius Satellite
0.93% , MCO , MOODYS CORP
1.30% , PM , Philip Morris, PM
1.09% , AET , AETNA
0.79% , MON , MONSANTO
1.03% , CI , CIGNA
0.97% , BAX , BAXTER INTL
0.53% , PWER , POWER ONE
1.64% , KBH , KB HOME
0.69% , DHI , D.R. HORTON, DHI
0.61% , IFF , INTL FLAV & FRAG
0.47% , TLH , Bond 10-20 Year US Treas, TLH
0.72% , VHT , Health Care VIPERs, VHT
0.37% , HGSI , Human Genome Sciences Inc
1.99% , RDC , ROWAN COMPANIES
1.94% , CAH , CARDINAL HEALTH
1.11% , GPS , GAP
0.94% , EOG , EOG RESOURCES
0.58% , MZZ , Short 200% MidCap 400 PS, MZZ
0.61% , LMT , LOCKHEED MARTIN
0.62% , SO , SOUTHERN
0.19% , TIP , Bond, TIPS, TIP
0.76% , WY , WEYERHAEUSER
1.25% , TYC , TYCO INTL
0.59% , THC , TENET HEALTHCARE
0.74% , AZO , AUTOZONE
0.39% , VMC , VULCAN MATERIALS

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.37% , IYE , Energy DJ, IYE
-0.80% , PMR , Retail, PMR
-0.83% , PXE , Energy Exploration & Prod, PXE
-7.13% , CROX , CROCS Inc., CROX
-1.67% , ITF , Japan LargeCap Blend TOPIX 150, ITF
-0.54% , FDV , Value 40 Large Low P/E FT DB, FDV
-0.72% , ADRA , Asia 50 BLDRS, ADRA
-4.89% , CHKP , Check Point Software Technologies Ltd
-3.29% , JNS , JANUS CAPITAL
-0.15% , IYJ , Industrial LargeCap Blend DJ US, IYJ
-3.09% , EL , Estee Lauder
-2.92% , DD , DU PONT
-2.02% , AGN , ALLERGAN
-1.39% , PSI , Semiconductors, PSI
-1.33% , SOXX , Semiconductor iS IGW, SOXX
-2.35% , KWT , Solar Energy MV, KWT
-0.94% , PBJ , Food & Beverage, PBJ
-0.34% , VPU , Utilities VIPERs, VPU
-1.97% , RSH , RADIOSHACK
-0.94% , KCE , Capital Markets KWB ST, KCE
-2.22% , DV , DeVry, Inc.
-2.12% , WPO , Washington Post
-0.20% , PWC , LargeCap Blend Dynamic PS, PWC
-2.49% , HOT , STARWOOD HOTELS
-2.25% , FMCN , Focus Media, FMCN
-4.15% , MPEL , Melco Crown Entertainment, MPEL
-1.32% , ZEUS , Olympic Steel, ZEUS
-1.52% , PBI , PITNEY BOWES
-2.96% , ADM , ARCHER DANIELS
-1.89% , PKI , PERKINELMER
-2.86% , BRCM , BROADCOM STK A
-1.72% , CVS , CVS
-4.41% , SHLD , SEARS HOLDINGS
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.21% Agriculture DB PS, DBA
1.84% Oil, Crude, U.S. Oil Fund, USO
1.78% Commodity Tracking, DBC
1.65% Oil Fund PowerShares, DBO
0.91% Silver Trust iS, SLV
0.88% Bond, 20+ Years Treasury, TLT
0.84% Mexico Index, EWW
0.66% Italy Index, EWI
0.64% Malaysia Index, EWM
0.53% Health Care SPDR, XLV
0.51% Austria Index, EWO
0.28% Bond, 10 Year Treasury, IEF
0.26% Bond Ex-US Treas, BWX
0.23% Realty Cohen & Steers, ICF
0.22% Financial Preferred, PGF
0.22% Biotech SPDR, XBI
0.21% Gold Shares S.T., GLD
0.20% REIT Wilshire, RWR
0.20% Real Estate US DJ, IYR
0.20% Bond, Aggregate, AGG
0.19% Bond, TIPS, TIP
0.18% Telecom DJ US, IYZ
0.16% Bear, Short S&P 500, SH
0.14% Bond Muni ATM-Free S&P iS, MUB
0.11% REIT VIPERs, VNQ
0.10% Bond, High-Yield Junk, JNK
0.08% Taiwan Index, EWT
0.07% Bond, Corp, LQD
0.04% Sweden Index, EWD
0.04% EMU Europe Index, EZU
0.03% Bond, High-Yield Corporate, HYG
0.02% European VIPERs, VGK
0.01% Netherlands Index, EWN
0.00% Bond EmrgMkt JPM iS, EMB
0.00% Bond Treasury Short-Term iS, SHV
0.00% Bond, 1-3 Year Treasury, SHY
0.00% Dividend International, PID
0.00% LargeCap Blend S&P 100, OEF
-0.05% Growth 1000 Russell, IWF
-0.05% France Index, EWQ
-0.06% Industrial SPDR, XLI
-0.06% Europe 350 S&P Index, IEV
-0.06% Chile MSCI iS, ECH
-0.07% Growth S&P 500/BARRA, IVW
-0.07% Growth VIPERs, VUG
-0.08% S&P 500 iS LargeCap Blend, IVV
-0.10% Germany Index, EWG
-0.11% Dividend High Yield Equity PS, PEY
-0.11% Consumer Staples SPDR, XLP
-0.12% Value LargeCap Dynamic PS, PWV
-0.12% United Kingdom Index, EWU
-0.12% Growth BARRA Small Cap 600, IJT
-0.12% Belgium Index, EWK
-0.13% S&P 500 SPDRs LargeCap Blend, SPY
-0.13% Switzerland Index, EWL
-0.14% Financial SPDR, XLF
-0.15% LargeCap VIPERs, VV
-0.16% SmallCap S&P 600, IJR
-0.18% Preferred Stock iS, PFF
-0.19% QQQ Nasdaq 100 Trust, QQQ
-0.20% LargeCap 1000 R, IWB
-0.20% Growth SmallCap VIPERs, VBK
-0.21% Technology SPDR, XLK
-0.22% Growth SmallCap R 2000, IWO
-0.22% EAFE Index, EFA
-0.23% Australia Index, EWA
-0.24% India PS, PIN
-0.24% LargeCap Blend Russell 3000, IWV
-0.24% Latin Am 40, ILF
-0.24% Blend Total Market VIPERs, VTI
-0.25% Value VIPERs, VTV
-0.26% DIAMONDS (DJIA), DIA
-0.27% Canada Index, EWC
-0.28% Value SmallCap S&P 600 B, IJS
-0.28% Dividend Appreciation Vipers, VIG
-0.28% Dividend DJ Select, DVY
-0.30% Global ex US ACWI iS, ACWX
-0.31% Dividend SPDR, SDY
-0.31% Value S&P 500 B, IVE
-0.31% Financial DJ US, IYF
-0.31% Growth MidCap 400 B, IJK
-0.33% Small Cap VIPERs, VB
-0.33% Utilities SPDR, XLU
-0.33% Small Cap EAFE MSCI iS, SCZ
-0.33% Water Resources, PHO
-0.34% Russia MV, RSX
-0.34% Utilities VIPERs, VPU
-0.35% MidCap S&P 400 SPDRs, MDY
-0.36% Financials VIPERs, VFH
-0.36% Pacific VIPERs, VPL
-0.36% Emerging Markets, EEM
-0.37% Energy DJ, IYE
-0.37% Technology DJ US, IYW
-0.37% Value 1000 Russell, IWD
-0.37% MidCap S&P 400 iS, IJH
-0.37% Microcap Russell, IWC
-0.38% SmallCap Russell 2000, IWM
-0.40% Global 100, IOO
-0.42% Turkey MSCI iS, TUR
-0.43% Transportation Av DJ, IYT
-0.43% Growth EAFE MSCI, EFG
-0.44% Info Tech VIPERs, VGT
-0.45% Value MidCap S&P 400 B, IJJ
-0.45% Energy SPDR, XLE
-0.45% Emerging VIPERs, VWO
-0.46% Value SmallCap VIPERS, VBR
-0.47% India Earnings WTree, EPI
-0.47% Growth MidCap Russell, IWP
-0.47% Energy Global, IXC
-0.48% Hong Kong Index, EWH
-0.48% Thailand MSCI iS, THD
-0.49% Energy VIPERs, VDE
-0.50% Value EAFE MSCI, EFV
-0.51% Homebuilders SPDR, XHB
-0.51% Pacific ex-Japan, EPP
-0.51% MidCap Russell, IWR
-0.52% Value MidCap Russell, IWS
-0.52% Value SmallCap Russell 2000, IWN
-0.54% Japan Index, EWJ
-0.54% Energy & Nat Res iS GS, IGE
-0.55% Consumer Discretionary SPDR, XLY
-0.56% Emerging 50 BLDRS, ADRE
-0.57% LargeCap Blend S&P=Weight R, RSP
-0.58% South Africa Index, EZA
-0.63% Materials SPDR, XLB
-0.65% Spain Index, EWP
-0.66% Indonesia MV, IDX
-0.66% Financial Services DJ, IYG
-0.67% South Korea Index, EWY
-0.77% Brazil Index, EWZ
-0.88% Singapore Index, EWS
-0.91% Frontier Markets Guggenheim , FRN
-0.92% WilderHill Clean Energy PS, PBW
-0.94% Capital Markets KWB ST, KCE
-1.07% Basic Materials DJ US, IYM
-1.20% China 25 iS, FXI
-1.28% Semiconductor SPDR, XSD
-1.33% Semiconductor iS IGW, SOXX
-1.48% Metals & Mining SPDR, XME
-1.78% Networking, IGN
-1.86% China LargeCap Growth G D H USX PS, PGJ