The S&P 500 Composite (SPX: 1,280.70) rose 0.23% on Monday. Volume on the NYSE fell 8%, reflecting a less bullish trading mood after nearly 3 weeks of rising stock prices.
Longer term, SPX has been consolidating in a trading range since October, 2011, from a low of 1074.77 to high of 1292.66. With the SPX overbought and losing upside momentum for 2 weeks, I doubt that SPX will be able to break through the upper end of its range at this time, thereby confounding the bullish majority of investors yet again.
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Equity Mutual Funds lost 6% in 2011, according to Lipper Research Services.
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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Stock Market Indicators
The Dow Theory signaled a Primary Tide Bear Market on 8/2/11, when both Dow-Jones Industrial and Transportation Averages closed below their closing price lows of the previous 11 months. On 1/4/12, both Averages reconfirmed a Secondary Reaction upside bounce by closing above their closing price highs of the previous 5 months. This appears to be one of those junctures when interpretation of the Dow Theory could be open to debate. Significantly, in my opinion, the higher highs on 1/4/12 were NOT confirmed by the broad-based, capitalization-weighted price indexes. I want to see broader upside confirmation before changing my bearish interpretation of the major trend.
NASDAQ Composite/S&P 500 Relative Strength Ratio broke down below the lows of the previous 6-months on 12/23/11. The Ratio has been trending lower since peaking on 9/23/11. Absolute price of the NASDAQ Composite has been correcting and consolidating since peaking at 2887.75 on 5/2/11. The price 50-day SMA has remained bearishly below the 200-day SMA consistently every day since 8/12/11.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below the lows of the previous 2 years on 12/29/11. BKF/SPY remains below its falling 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 1/13/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below the lows of the previous 2 years on 1/6/12, reconfirming the preexisting major bearish trend. EEM/SPY remains below its falling 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 2/3/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below the lows of the previous 7 years on 1/6/12, reconfirming the preexisting major bearish trend. EFA/SPY remains below its falling 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 1/14/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) rose above the highs of the previous 7 months on 1/4/12 and has been in a rising trend since 11/4/11. Longer term, the 50-day SMA has remained bullishly above the 200-day SMA every day since 8/25/11. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative safety of large size. Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors prefer riskier and more volatile stocks.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below is 50-day SMA on 1/4/12. IWM/SPY has remained below its 200-day SMA consistently every day since 7/6/11. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA consistently every day since 8/11/11.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below is 50-day SMA on 12/12/11. MDY/SPY has remained below its 200-day SMA consistently every day since 8/1/11. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA consistently every day since 8/24/11.
Advisory Service Sentiment: There were 69.5% Bulls plus Neutrals versus 30.5% Bears as of 1/4/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The 20-year median of Bulls plus Neutrals is 69.40 and the mean is 68.32.
VIX Fear Index broke down below the lows of the previous 5-months on 12/22/11, hitting 20.34 intraday. That is down from recent peaks of 30.91 on 12/8/11, 37.83 on 11/1/11, 46.88 on 10/4/11, and 48.00 on 8/8/11. This drop indicates a shift away from fear and toward confidence, which, according to Humphrey Bancroft Neill’s Art of Contrary Thinking, may be bearish. VIX is a market estimate of expected constant 30-day volatility, calculated by weighting S&P 500 Index CBOE option bid/ask quotes spanning a wide range of strike prices for the two nearest expiration dates.
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
1406.32, high of 5/29/2008
1381.50, Fibonacci 78.6% of 2007-2009 range
1370.58, high of 5/2/11
1359.44, high of 5/10/11
1356.48, high of 7/7/11
1347.00, high of 7/21/11
1307.28, Fibonacci 78.6% of 2011 range
1292.66, high of 10/27/11
1284.62, high of 1/3/2012
The S&P 500 Composite Potential Support
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1258.40, 200-day SMA
1257.46, low of 12/30/11
1257.58, Fibonacci 61.8% of 2011 range
1255.22, high of 12/22/2011
1248.64, low of 12/29/2011
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 11/3/11
1231.04, high of 12/16/11
1226.64, low of 11/9/2011
1222.68, Fibonacci 50% of 2011 range
1224.57, high of 12/19/11
1215.20, low of 12/16/11
1209.47, low of 12/14/2011
1209.43, low of 11/17/2011
1204.49, Fibonacci 23.6% of 2009-11 range
1202.37, low of 12/19/11
1187.77, Fibonacci 38.2% of 2011 range
1158.66, low of 11/25/2011
1144.38, Fibonacci 23.6% of 2011 range
1101.73, Fibonacci 38.2% of 2009-11 range
1074.77, low of 10/4/2011
1039.70, low of 8/27/10
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
1018.69, Fibonacci 50% of 2009-11 range
1008.55, Fibonacci 38.2% of 2009-2010 range
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
943.29, Gann 50.0% of 2009-2010 range
935.64, Fibonacci 61.8% of 2009-11 range
878.04, Fibonacci 61.8% of 2009-2010 range
874.17, Gann 62.5% of 2009-2010 range
869.32, low of 7/8/2009
817.40, Fibonacci 78.6% of 2009-11 range
805.17, Gann 75.0% of 2009-2010 range
785.13, Fibonacci 78.6% of 2009-2010 range
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) price whipsawed back below its 50-day SMA on 1/9/12. TLT remains well above its 200-day SMA, and the 50-day SMA has remained bullishly above the 200-day SMA every day since 6/24/11, suggesting a persistently bullish major trend for the longer term. Support 117.57, 115.80, 115.21, 109.82, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 121.76, 124.02 and 125.03.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) price rose above the highs of the previous 4 trading days on 1/9/12. IEF remains in bullish position above its 50-day and 200-day SMAs, and the 50-day SMA has remained bullishly above the 200-day SMA every day since 6/21/11, suggesting a persistently bullish major trend. Support 104.45, 104.25, 103.29, 102.32, 101.36, 101.11, 99.79, and 97.66. Resistance 106.04 and 106.66.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) remains below its falling 200-day SMA. The 50-day SMA has remained bearishly below the 200-day SMA every day since 6/20/11.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) crossed above its 50-day SMA on 1/9/12 but remains below its 200-day SMA. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 7/15/11.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) rose above the high of the previous 10 months on 1/6/12, reconfirming its bullish major trend. UUP rose above its 50-day SMA on 11/14/11 and rose above its 200-day SMA on 11/9/11. The 50-day SMA has remained bullishly above the 200-day SMA every day since 10/26/11. Support 22.24, 21.97, 21.92, 21.58, 21.07, and 20.84. Resistance 22.77, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell steeply since peaking at 29.36 on 1/3/12. DBA encountered significant resistance near its falling 50-day SMA. DBA was in a vulnerable, overbought position on 1/3/12. Price fell below the lows of the previous 14 months on 12/16/11, again confirming a bearish major downtrend.
Crude Oil, United States Oil ETF (USO) closed moderately lower on 1/9/12, possibly ending a normal 3-day minor correction. USO broke out above the highs of the previous 7 months on 1/4/12, thereby signaling a major uptrend. Support 38.56. 37.87, 35.73, 34.54, 32.52, 29.10, 26.28, and 22.74. Resistance 39.96, 40.74, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) rose above the highs of the previous 3 weeks on 1/6/12 but reversed to close slightly lower on the day, suggesting exhaustion of the minor uptrend. GLD fell below the lows of the previous 5 months on 12/29/11, confirming a significant bearish trend. On 12/12/11, I warned that a break below the low at 165.53 set on 12/6/11 would be bearish. GLD remains below its 50-day and 200-day SMAs. Support: 154.55, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 158.63, 162.07, 165.53, 170.80, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) remains bearishly below its 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 2/22/11. GDX/GLD fell below 3-year lows on 12/19/11, reconfirming a bearish major trend for the long term.
Silver, iShares Silver Trust ETF (SLV) fell below the lows of the previous 11 months on 12/29/11. SLV remains bearishly below its falling 50-day and 200-day SMAs. SLV crossed below its 50-day SMA on 12/8/11 and crossed below its 200-day SMA on 9/22/11. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 10/27/11. Support 25.65 and 24.44. Resistance: 28.99, 32.53, 34.44, 34.51, 40.23, 41.49, 42.30, 42.78, 44.71 and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) fell below the lows of the previous 14 months on 12/28/11, confirming a bearish trend. SLV/GLD remains bearishly below 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 8/30/11. This SLV/GLD downtrend means investors prefer Gold over Silver.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) whipsawed back below its 50-day SMA on 1/4/12. JJC remains below its 200-day SMA, and the 50-day SMA has remained bearishly below the 200-day SMA every day since 8/8/11. Major trend weakness in Copper suggests serious concerns about the economic outlook.
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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
1.47% , IGN , Networking, IGN
13.78% , NFLX , Netflix, NFLX
0.46% , VFH , Financials VIPERs, VFH
4.02% , RL , Polo Ralph Lauren
0.63% , BBH , Biotech H, BBH
2.03% , SOXX , Semiconductor iS IGW, SOXX
4.01% , URBN , Urban Outfitters Inc.
1.53% , PBW , WilderHill Clean Energy PS, PBW
2.23% , LLTC , LINEAR TECH
0.71% , EWL , Switzerland Index, EWL
2.08% , XBI , Biotech SPDR, XBI
0.45% , JKG , MidCap Blend Core iS M, JKG
3.93% , CBE , COOPER INDS STK A
1.18% , ILF , Latin Am 40, ILF
0.79% , VIS , Industrials VIPERs, VIS
4.24% , TNB , THOMAS & BETTS
3.33% , LIZ , LIZ CLAIRBORNE
2.13% , CMCSA , COMCAST HOLDINGS STK A
5.25% , RYAAY , Ryanair Holdings plc
0.90% , ACWX , Global ex US ACWI iS, ACWX
2.40% , TEVA , Teva Pharmaceutical Industries Limited
1.68% , QLGC , QLOGIC
2.89% , AA , ALCOA
2.41% , COF , CAPITAL ONE FNCL
2.25% , SIRI , Sirius Satellite
1.14% , EWN , Netherlands Index, EWN
0.33% , BWX , Bond Ex-US Treas, BWX
3.00% , AMAT , APPLIED MATERIAL
2.72% , RF , REGIONS FINAN
7.52% , EK , EASTMAN KODAK
2.37% , KWT , Solar Energy MV, KWT
1.79% , PXQ , Networking, PXQ
1.78% , TER , TERADYNE
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-7.08% , HMA , HEALTH MGMT STK A
-4.24% , GOOG , Google
-0.21% , PBJ , Food & Beverage, PBJ
-2.37% , IGT , INTL GAME TECH
-2.28% , AFL , AFLAC
-2.36% , JNY , JONES APPAREL
-2.61% , COST , COSTCO WHOLESAL
-0.22% , PSJ , Software, PSJ
-0.91% , BMY , BRISTOL MYERS
-0.11% , KLD , LargeCap Blend Socially Responsible iS, KLD
-0.96% , PX , PRAXAIR
-1.59% , BC , BRUNSWICK
-0.90% , EWS , Singapore Index, EWS
-1.27% , MZZ , Short 200% MidCap 400 PS, MZZ
-1.79% , VIAB.O , VIACOM STK B
-0.86% , AMGN , AMGEN
-0.79% , MSI , Motorola Solutions, MSI
-2.55% , DYN , DYNEGY
-0.19% , EFV , Value EAFE MSCI, EFV
-1.30% , ZEUS , Olympic Steel, ZEUS
-0.78% , HGSI , Human Genome Sciences Inc
-1.07% , VRSN , VeriSign Inc
-0.58% , HOG , HARLEY DAVIDSON
-0.45% , QCOM , QUALCOMM
-0.37% , FLR , FLUOR
-0.37% , RWR , REIT Wilshire, RWR
-1.66% , SUN , SUNOCO
-0.70% , XL , XL CAPITAL STK A
-1.77% , UNM , UNUMPROVIDENT
-0.51% , PPG , PPG INDUSTRIES
-0.22% , LAMR , Lamar Advertising Company
-0.55% , ADM , ARCHER DANIELS
-0.08% , PWB , Lg Cap Growth PSD, PWB
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.13% China 25 iS, FXI
2.10% Brazil Index, EWZ
2.08% Biotech SPDR, XBI
2.03% Semiconductor iS IGW, SOXX
1.99% Semiconductor SPDR, XSD
1.59% Agriculture DB PS, DBA
1.53% WilderHill Clean Energy PS, PBW
1.47% Networking, IGN
1.39% Sweden Index, EWD
1.31% China LargeCap Growth G D H USX PS, PGJ
1.18% Latin Am 40, ILF
1.14% Netherlands Index, EWN
1.13% Emerging 50 BLDRS, ADRE
1.05% Thailand MSCI iS, THD
1.02% Emerging Markets, EEM
0.92% India Earnings WTree, EPI
0.90% Russia MV, RSX
0.90% Global ex US ACWI iS, ACWX
0.86% Small Cap EAFE MSCI iS, SCZ
0.86% Microcap Russell, IWC
0.83% India PS, PIN
0.81% Financial Services DJ, IYG
0.80% Emerging VIPERs, VWO
0.79% Silver Trust iS, SLV
0.77% EMU Europe Index, EZU
0.76% European VIPERs, VGK
0.75% Energy Global, IXC
0.74% Industrial SPDR, XLI
0.73% France Index, EWQ
0.71% Switzerland Index, EWL
0.71% Growth EAFE MSCI, EFG
0.70% Frontier Markets Guggenheim , FRN
0.66% Financial Preferred, PGF
0.65% Transportation Av DJ, IYT
0.61% Growth MidCap 400 B, IJK
0.61% Growth SmallCap R 2000, IWO
0.60% South Africa Index, EZA
0.59% Spain Index, EWP
0.59% Taiwan Index, EWT
0.58% Belgium Index, EWK
0.56% Homebuilders SPDR, XHB
0.56% MidCap S&P 400 SPDRs, MDY
0.55% Indonesia MV, IDX
0.55% MidCap S&P 400 iS, IJH
0.54% Growth SmallCap VIPERs, VBK
0.52% Financial SPDR, XLF
0.52% Energy DJ, IYE
0.52% Value MidCap S&P 400 B, IJJ
0.52% Preferred Stock iS, PFF
0.51% Europe 350 S&P Index, IEV
0.50% SmallCap Russell 2000, IWM
0.48% Energy SPDR, XLE
0.46% Financials VIPERs, VFH
0.45% Small Cap VIPERs, VB
0.41% Germany Index, EWG
0.41% Dividend International, PID
0.40% SmallCap S&P 600, IJR
0.39% Growth MidCap Russell, IWP
0.39% EAFE Index, EFA
0.39% Japan Index, EWJ
0.38% Capital Markets KWB ST, KCE
0.38% Energy VIPERs, VDE
0.36% MidCap Russell, IWR
0.36% Financial DJ US, IYF
0.36% Value S&P 500 B, IVE
0.34% Value SmallCap VIPERS, VBR
0.33% Bond Muni ATM-Free S&P iS, MUB
0.33% Energy & Nat Res iS GS, IGE
0.33% Bond Ex-US Treas, BWX
0.33% Value 1000 Russell, IWD
0.32% Australia Index, EWA
0.32% Hong Kong Index, EWH
0.32% Growth BARRA Small Cap 600, IJT
0.32% Value VIPERs, VTV
0.30% Canada Index, EWC
0.29% Water Resources, PHO
0.28% LargeCap Blend S&P=Weight R, RSP
0.27% Value MidCap Russell, IWS
0.25% Value SmallCap S&P 600 B, IJS
0.24% S&P 500 SPDRs LargeCap Blend, SPY
0.24% Mexico Index, EWW
0.24% LargeCap VIPERs, VV
0.23% Blend Total Market VIPERs, VTI
0.22% Malaysia Index, EWM
0.21% Utilities VIPERs, VPU
0.21% LargeCap Blend Russell 3000, IWV
0.20% Materials SPDR, XLB
0.20% LargeCap 1000 R, IWB
0.19% Telecom DJ US, IYZ
0.19% LargeCap Blend S&P 100, OEF
0.19% Chile MSCI iS, ECH
0.18% Value SmallCap Russell 2000, IWN
0.17% Health Care SPDR, XLV
0.17% Value LargeCap Dynamic PS, PWV
0.17% Dividend DJ Select, DVY
0.16% Consumer Staples SPDR, XLP
0.15% Dividend Appreciation Vipers, VIG
0.14% Utilities SPDR, XLU
0.14% Bond, High-Yield Corporate, HYG
0.12% S&P 500 iS LargeCap Blend, IVV
0.12% United Kingdom Index, EWU
0.11% Commodity Tracking, DBC
0.11% DIAMONDS (DJIA), DIA
0.10% Bond, TIPS, TIP
0.09% Global 100, IOO
0.08% Pacific VIPERs, VPL
0.08% Dividend SPDR, SDY
0.07% Turkey MSCI iS, TUR
0.05% Growth 1000 Russell, IWF
0.05% Pacific ex-Japan, EPP
0.03% Growth VIPERs, VUG
0.02% Bond, 1-3 Year Treasury, SHY
0.02% Bond, 10 Year Treasury, IEF
0.01% Bond Treasury Short-Term iS, SHV
0.00% Info Tech VIPERs, VGT
0.00% Bond, High-Yield Junk, JNK
-0.03% Growth S&P 500/BARRA, IVW
-0.08% Bond, Aggregate, AGG
-0.09% Basic Materials DJ US, IYM
-0.13% Bear, Short S&P 500, SH
-0.15% Austria Index, EWO
-0.15% Bond EmrgMkt JPM iS, EMB
-0.15% Bond, Corp, LQD
-0.15% Consumer Discretionary SPDR, XLY
-0.15% Technology SPDR, XLK
-0.18% Bond, 20+ Years Treasury, TLT
-0.18% Technology DJ US, IYW
-0.19% Value EAFE MSCI, EFV
-0.22% Dividend High Yield Equity PS, PEY
-0.23% South Korea Index, EWY
-0.28% Real Estate US DJ, IYR
-0.33% QQQ Nasdaq 100 Trust, QQQ
-0.34% Oil Fund PowerShares, DBO
-0.35% REIT VIPERs, VNQ
-0.36% Oil, Crude, U.S. Oil Fund, USO
-0.37% REIT Wilshire, RWR
-0.40% Realty Cohen & Steers, ICF
-0.45% Gold Shares S.T., GLD
-0.46% Metals & Mining SPDR, XME
-0.62% Italy Index, EWI
-0.90% Singapore Index, EWS
