The S&P 500 Composite (SPX: 1,261.01) absolute price rose to challenge the highs of the previous 2 trading days and its 200-day SMA on 12/7/11, only to reverse to the downside in the final minutes, again failing the test of resistance.
As I have been noting here, SPX appears to be encountering resistance near its 200-day SMA, now at 1264.00 and declining fractionally every day.
Because the 200-day SMA is so widely followed, predatory traders might try to plant more late-day false rumors, which appear to be mindlessly reported by the gullible media, in an effort to close SPX above its 200-day SMA, in order to trigger buy orders to sell into. Note that since 1/3/2000, of the 106 instances of the SPX closing above or below its 200-day SMA, 88% of the 200-day SMA crossover signals would have resulted in a loss, going both long and short, following the trend in the direction of the crossover.
Short-term price momentum oscillators have stalled out. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 8/12/11.
NASDAQ Composite/S&P 500 Relative Strength Ratio broke down below the lows of the previous 3-months on 12/7/11 and has been trending lower since peaking on 9/23/11. Absolute price of the NASDAQ Composite remains below its falling 200-day SMA, and the 50-day SMA has been bearishly below the 200-day SMA every day since 8/12/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) rose above the highs of the previous 7 weeks on 12/7/11 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.
Stock markets may become much more volatile, with heightened sensitivity to news and rumors of news, and with large daily moves in both directions. Note that very high price volatility is typical of bear markets, while bull markets are much less volatile. Reward/Risk still appears significantly skewed to the Risk side.
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) rose above its 50-day SMA on 12/7/11 and remains above its 200-day SMA.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below the lows of the previous 13 months on 12/7/11, thereby confirming a major bearish downtrend in all time frames.
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Stock Market Indicators
The S&P 500 Composite (SPX: 1,261.01) price rose to challenge the highs of the previous 2 trading days and its 200-day SMA on 12/7/11.
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
1277.55, high of 11/8/2011
1267.06, high of 12/7/2011
1264.00, 200-day SMA
The S&P 500 Composite Potential Support
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 11/3/11
1226.64, low of 11/9/2011
1222.68, Fibonacci 50% of 2011 range
1221.06, low of 10/26/2011
1215.42, low of 11/1/2011
1209.43, low of 11/17/2011
1204.49, Fibonacci 23.6% of 2009-11 range
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
The Dow Theory signaled a Primary Tide Bear Market on 8/2/11, when both Dow-Jones Averages, Industrial and Transportation, closed below their closing price lows of the previous 11 months. This Bear Market was confirmed on 10/3/11 by lower closing price lows for both Averages. A short-term downtrend was confirmed on 11/21/11 when both Averages closed below previous 4-week lows after making lower highs since peaking on 10/27/11.
A Dow Theory Primary Tide Bear Market is a powerful beast that must not be underestimated. The median Dow Theory Primary Tide Bear Market in history lasts 16 months and takes stock prices down 34%. In a Dow Theory Primary Tide Bear Market, the big surprises usually come to the downside. Typically, there is no safe place to hide in a Dow Theory Primary Tide Bear Market. Even those stocks that have held up relatively well through most of the Bear Market eventually succumb to the relentless tide of selling.
NASDAQ Composite/S&P 500 Relative Strength Ratio broke down below the lows of the previous 3-months on 12/7/11 and has been trending lower since peaking on 9/23/11. Absolute price of the NASDAQ Composite remains below its falling 200-day SMA, and the 50-day SMA has been bearishly below the 200-day SMA every day since 8/12/11.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) remains below the 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) remains below the 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) remains below the 50-day and 200-day SMAs. The 50-day SMA has remained bearishly below the 200-day SMA of the EFA/SPY Ratio 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 weeks on 12/7/11 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) has been in a downtrend since 4/5/11. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 8/11/11.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) has been in a downtrend since 4/5/11. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 8/24/11.
Advisory Service Sentiment: There were 70.5% Bulls plus Neutrals versus 29.5% Bears as of 12/7/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. This is the most optimism in nearly 4 months. The 20-year median of Bulls plus Neutrals is 69.40 and the mean is 68.32.
VIX Fear Index fell below the lows of the previous 5 weeks to 25.29 intraday on 12/2/11, down from a peak of 48.00 on 8/8/11.This indicates significantly diminished fear. 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.
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Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) rose above its 50-day SMA on 12/7/11 and remains above its 200-day SMA. Longer term, the 50-day SMA has remained bullishly above the 200-day SMA every day since 6/24/11. Support 115.80, 115.21, 109.82, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 123.05 and 125.03.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) rose above the highs of the previous 5 trading days and rose above its 50-day SMA on 12/7/11. IEF remains above its 200-day SMA. Longer term, the 50-day SMA has remained bullishly above the 200-day SMA every day since 6/21/11. Support 103.29, 102.32, 101.36, 101.11, 99.79, and 97.66. Resistance 105.43 and 106.66.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) has been in a minor uptrend since 11/23/11 but still remains in a larger downtrend since 2/8/11. The 50-day SMA has remained bearishly below the 200-day SMA every day since 6/20/11. JNK/LQD broke down below the lows of the previous 29-months on 10/3/11. Absolute price of JNK has been weak since 10/27/11 and remains bearish.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) has been in a downtrend since peaking on 4/8/11. 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) appears to be consolidating above its 50-day SMA. UUP remains bullishly above 200-day SMA. The 50-day SMA has remained bullishly above the 200-day SMA every day since 10/26/11. Support 21.97, 21.92, 21.58, 21.07, and 20.84. Resistance 22.44 and 22.62.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below the lows of the previous 13 months on 12/7/11, thereby confirming a major bearish downtrend in all time frames.
Crude Oil, United States Oil ETF (USO) absolute price fell below the lows of the previous 3 trading days on 12/7/11. A further price pullback now would come as no surprise. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 7/14/11. Finally, USO broke down below 2-year lows on 10/4/11 to confirm a major bear market. Support 36.79, 36.49, 34.54, 32.52, 29.10, 26.28, and 22.74. Resistance 39.74, 40.74, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) absolute price rose above the high of the previous trading day on 12/7/11. GLD successfully tested its 50-day SMA on 12/6/11. GLD looks bullish for the short term. GLD remains bullishly above its 50-day and 200-day SMAs, and the 50-day SMA has remained bullishly above the 200-day SMA every day since 2/11/09. Support: 165.53, 162.07, 154.19, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) remains bearishly below its falling 200-day SMA. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 2/22/11. GDX/GLD fell below 29-month lows on 8/8/11, reconfirming a bearish major trend for the long term.
Silver, iShares Silver Trust ETF (SLV) absolute price fell below the lows of the previous 6 trading days on 12/6/11 before reversing to the upside to close higher and back above its 50-day SMA. SLV remains below its 200-day SMA. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 10/27/11. SLV price broke down below the lows of the previous 7 months on 9/26/11, which confirmed a bearish major trend for the long term. Support 29.83, 29.14, 27.41, 26.03, and 24.44. Resistance: 34.44, 34.51, 40.23, 41.49, 42.30, 42.78, 44.71 and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) remains bearishly below falling 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) absolute price fell below the lows of the previous 3 trading days on 12/7/11. JJC remains below its 200-day SMA. Longer term, 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
0.42% , XLG , LargeCap Rydex Rus Top 50, XLG
0.55% , ADRA , Asia 50 BLDRS, ADRA
4.30% , GCI , GANNETT
2.61% , TROW , T ROWE PRICE GP
2.44% , NYT , NY TIMES STK A
2.09% , LTD , LIMITED BRANDS
1.71% , LNCR , Lincare Holdings Inc
0.99% , KCE , Capital Markets KWB ST, KCE
3.92% , GS , GOLDMAN SACHS
2.10% , UPS , UNITED PARCEL STK B
1.53% , TUR , Turkey MSCI iS, TUR
0.50% , VHT , Health Care VIPERs, VHT
1.26% , PXN , Nanotech Lux, PXN
0.44% , OEF , LargeCap Blend S&P 100, OEF
2.97% , CMA , COMERICA
0.86% , SYY , SYSCO
5.36% , FMCN , Focus Media, FMCN
1.90% , CAH , CARDINAL HEALTH
0.63% , ITF , Japan LargeCap Blend TOPIX 150, ITF
2.95% , TLAB , TELLABS
0.66% , IEV , Europe 350 S&P Index, IEV
1.74% , LOW , LOWES
2.40% , OMX , OFFICEMAX INC., OMX
6.51% , MTG , MGIC INVESTMENT
0.68% , IOO , Global 100, IOO
1.31% , MDT , MEDTRONIC
1.39% , CSCO , CISCO SYSTEMS
2.66% , STT , STATE STREET
2.64% , ECH , Chile MSCI iS, ECH
1.54% , BBBY , BED BATH BEYOND
0.68% , ITW , ILLINOIS TOOL
0.79% , T , AT&T Corp., T
4.58% , MS , MORGAN STANLEY
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.68% , PXE , Energy Exploration & Prod, PXE
-7.51% , RFMD , RF Micro Devices Inc
-6.70% , LVLT.K , LEVEL 3 COMMUNICATIONS
-7.21% , EK , EASTMAN KODAK
-0.80% , IYZ , Telecom DJ US, IYZ
-0.79% , IIH , Internet Infrastructure H, IIH
-1.77% , CTAS , CINTAS
-1.07% , EIS , Israel MSCI iS, EIS
-0.33% , JKI , Value MidCap iS M, JKI
-2.54% , BHH , Internet B2B H, BHH
-3.32% , NE , NOBLE
-2.65% , IGT , INTL GAME TECH
-2.35% , PH , PARKER HANNIFIN
-0.44% , EWP , Spain Index, EWP
-2.78% , THC , TENET HEALTHCARE
-1.23% , ZMH , ZIMMER HLDGS
-2.05% , UIS , UNISYS
-2.01% , PGR , PROGRESSIVE OHIO
-0.30% , EWI , Italy Index, EWI
-0.81% , VOX , Telecom Services VIPERs, VOX
-1.84% , BAX , BAXTER INTL
-3.06% , LIZ , LIZ CLAIRBORNE
-1.38% , APOL , APOLLO GROUP
-3.94% , BHI , BAKER HUGHES
-1.55% , MAR , MARRIOTT INTL STK A
-0.64% , IGV , Software, IGV
-1.62% , SRCL , Stericycle, SRCL
-0.86% , PUI , Utilities, PUI
-2.08% , ZION , ZIONS
-0.08% , PKB , Building & Construction, PKB
-1.05% , ESRX , EXPRESS SCRIPTS
-0.98% , VFC , VF
-1.02% , LO , Lorillard, Inc. LO
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.64% Chile MSCI iS, ECH
1.92% Thailand MSCI iS, THD
1.53% Turkey MSCI iS, TUR
1.40% Japan Index, EWJ
1.33% Semiconductor iS IGW, SOXX
1.21% Financial SPDR, XLF
1.19% REIT Wilshire, RWR
1.19% Financials VIPERs, VFH
1.17% Realty Cohen & Steers, ICF
1.13% Financial Services DJ, IYG
1.12% Austria Index, EWO
1.09% REIT VIPERs, VNQ
1.06% Financial DJ US, IYF
1.03% Pacific VIPERs, VPL
1.00% Small Cap EAFE MSCI iS, SCZ
0.99% Capital Markets KWB ST, KCE
0.94% Real Estate US DJ, IYR
0.85% United Kingdom Index, EWU
0.79% Frontier Markets Guggenheim , FRN
0.78% Sweden Index, EWD
0.78% Growth EAFE MSCI, EFG
0.76% Switzerland Index, EWL
0.74% Health Care SPDR, XLV
0.73% Gold Shares S.T., GLD
0.71% China 25 iS, FXI
0.70% EAFE Index, EFA
0.68% Global 100, IOO
0.66% Europe 350 S&P Index, IEV
0.66% Taiwan Index, EWT
0.66% Bond Ex-US Treas, BWX
0.65% South Africa Index, EZA
0.65% Pacific ex-Japan, EPP
0.64% Consumer Discretionary SPDR, XLY
0.63% Global ex US ACWI iS, ACWX
0.63% Bond, Corp, LQD
0.59% European VIPERs, VGK
0.58% Canada Index, EWC
0.57% Value 1000 Russell, IWD
0.57% Emerging VIPERs, VWO
0.56% DIAMONDS (DJIA), DIA
0.56% Australia Index, EWA
0.55% Value S&P 500 B, IVE
0.49% France Index, EWQ
0.48% Indonesia MV, IDX
0.47% Value EAFE MSCI, EFV
0.45% Bond, 10 Year Treasury, IEF
0.44% LargeCap Blend S&P 100, OEF
0.42% Value VIPERs, VTV
0.41% Russia MV, RSX
0.41% Homebuilders SPDR, XHB
0.40% Emerging Markets, EEM
0.39% Singapore Index, EWS
0.38% Hong Kong Index, EWH
0.37% S&P 500 SPDRs LargeCap Blend, SPY
0.37% Value LargeCap Dynamic PS, PWV
0.36% Belgium Index, EWK
0.36% Bond, 20+ Years Treasury, TLT
0.33% Bond Muni ATM-Free S&P iS, MUB
0.32% S&P 500 iS LargeCap Blend, IVV
0.30% EMU Europe Index, EZU
0.30% Dividend SPDR, SDY
0.29% China LargeCap Growth G D H USX PS, PGJ
0.26% Blend Total Market VIPERs, VTI
0.26% LargeCap 1000 R, IWB
0.26% Value SmallCap VIPERS, VBR
0.25% Consumer Staples SPDR, XLP
0.22% Dividend High Yield Equity PS, PEY
0.22% Dividend Appreciation Vipers, VIG
0.19% LargeCap VIPERs, VV
0.18% Bond, Aggregate, AGG
0.17% India Earnings WTree, EPI
0.16% Growth S&P 500/BARRA, IVW
0.16% LargeCap Blend Russell 3000, IWV
0.13% Latin Am 40, ILF
0.13% LargeCap Blend S&P=Weight R, RSP
0.12% Technology SPDR, XLK
0.10% Germany Index, EWG
0.09% South Korea Index, EWY
0.09% Microcap Russell, IWC
0.09% Materials SPDR, XLB
0.09% Value SmallCap S&P 600 B, IJS
0.07% Malaysia Index, EWM
0.07% Value MidCap Russell, IWS
0.07% Dividend International, PID
0.07% Transportation Av DJ, IYT
0.06% India PS, PIN
0.05% Info Tech VIPERs, VGT
0.05% Value SmallCap Russell 2000, IWN
0.04% Bond, 1-3 Year Treasury, SHY
0.02% Technology DJ US, IYW
0.01% Bond Treasury Short-Term iS, SHV
0.00% Netherlands Index, EWN
0.00% QQQ Nasdaq 100 Trust, QQQ
0.00% WilderHill Clean Energy PS, PBW
-0.01% Growth BARRA Small Cap 600, IJT
-0.01% Value MidCap S&P 400 B, IJJ
-0.03% SmallCap S&P 600, IJR
-0.03% Industrial SPDR, XLI
-0.04% Dividend DJ Select, DVY
-0.04% Semiconductor SPDR, XSD
-0.07% Growth 1000 Russell, IWF
-0.10% Emerging 50 BLDRS, ADRE
-0.11% Small Cap VIPERs, VB
-0.14% Utilities SPDR, XLU
-0.14% Growth VIPERs, VUG
-0.16% Preferred Stock iS, PFF
-0.17% Bond, TIPS, TIP
-0.20% SmallCap Russell 2000, IWM
-0.20% Financial Preferred, PGF
-0.22% Basic Materials DJ US, IYM
-0.23% Bond EmrgMkt JPM iS, EMB
-0.23% Utilities VIPERs, VPU
-0.24% MidCap Russell, IWR
-0.24% Oil Fund PowerShares, DBO
-0.28% Energy Global, IXC
-0.30% MidCap S&P 400 iS, IJH
-0.30% Italy Index, EWI
-0.31% MidCap S&P 400 SPDRs, MDY
-0.32% Bond, High-Yield Corporate, HYG
-0.32% Bear, Short S&P 500, SH
-0.35% Growth SmallCap R 2000, IWO
-0.39% Brazil Index, EWZ
-0.39% Mexico Index, EWW
-0.43% Growth MidCap Russell, IWP
-0.44% Spain Index, EWP
-0.47% Water Resources, PHO
-0.47% Growth MidCap 400 B, IJK
-0.49% Oil, Crude, U.S. Oil Fund, USO
-0.49% Networking, IGN
-0.53% Growth SmallCap VIPERs, VBK
-0.55% Metals & Mining SPDR, XME
-0.70% Energy & Nat Res iS GS, IGE
-0.71% Bond, High-Yield Junk, JNK
-0.80% Telecom DJ US, IYZ
-0.81% Biotech SPDR, XBI
-0.83% Energy DJ, IYE
-0.86% Commodity Tracking, DBC
-0.88% Energy VIPERs, VDE
-0.95% Energy SPDR, XLE
-1.00% Silver Trust iS, SLV
-1.29% Agriculture DB PS, DBA
