The S&P 500 Composite (SPX, 1,286.94) fell 5.34 points or 0.41% on Monday, August 1, 2011. SPX was down every day last week, falling 3.92% for the week. SPX broke down further below the lows of the previous 4 weeks, again confirming its short-term downtrend.
The NASDAQ Composite, the NYSE Composite, the Russell 1000, Russell 2000, Russell 3000, the Dow-Jones Industrials, and the Dow-Jones Transports also confirmed by breaking down below the lows of the previous 4+ weeks.
The S&P 500 tested its widely-followed 200-day SMA (now at 1,285.41 and rising) and closed above it on Friday and Monday. A close below the 200-day SMA might bring in still more selling pressure, however.
The NASDAQ Advance-Decline Line fell below 9-month lows, suggesting weakness in the broad list of smaller-cap stocks.
Uncertainty prevails for the short term. For the medium term, a complex Dow Theory Secondary Reaction probably is still unfolding during the historically weak, “Sell in May, and go away” season.
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) closed further above the highs of the previous 8 months, confirming a significant uptrend.
Crude Oil, United States Oil ETF (USO) fell below the lows of the previous 4 weeks and closed further below its 20-, 50-, and 200-day simple moving averages on 8/1/11, confirming a short-term downtrend.
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Stock Market Indicators
NASDAQ Composite/S&P 500 Relative Strength Ratio has been strong since bottoming on 6/20/11. Although the Ratio’s 50-day SMA remains below the 200-day SMA, the spread is closing and the SMAs may cross in days ahead. Long term, the trend remains bullish. Absolute price peaked on 5/2/11 at 2,887.75 (intraday) and appears to be consolidating.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) rose above 7-week highs on 8/1/11, suggesting a recovery attempt. The EEM/SPY ratio remains below the 200-day SMA, and the 50-day SMA remains below the 200-day SMA, so the trend is neutral. Absolute price is neutral: EEM broke down below 14-week lows on 6/23/11 but has stabilized since.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) has been in a major long-term downtrend since peaking on 11/27/07. The Ratio fell below its 50-day SMA on 8/1/11, remains below the 200-day SMA, and the 50-day SMA remains below the 200-day SMA. Absolute price has been weak since 5/2/11 and is bearish relative to the same SMAs.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) rose above the highs of the previous 5 months on 8/1/11, suggesting a medium-term recovery. But OEX/SPX fell below 28-year lows on 5/26/11, confirming its preexisting bearish long-term major trend.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below 6-week lows on 7/27/11. IWM/SPY appears bearish for the short term.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below 5-month lows and key SMAs on 7/28/11. MDY/SPY appears bearish for the medium term.
Advisory Service Sentiment: There were 49.5% Bulls versus 21.5% Bears as of 7/27/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio rose to 2.30, which suggests bullish complacency when compared to 20-year range of 0.41 to 3.74, a median of 1.56, and a mean of 1.64.
VIX Fear Index jumped to 25.94 intraday on 7/29/11, the highest level of fear in 19 weeks. 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 Dow Theory signaled a Primary Tide Bull Market on 7/23/09, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 6 months.
As of the close on June 6, 2011, the Dow Theory confirmed a Secondary Reaction (a significant downside correction) for the general stock market, as the Dow Industrials and Transports both closed below 10-week lows. Previously, as of June 1, 2011, the Dow Theory gave a warning of a significant downside correction for the general stock market, as the Dow Industrials and Transports both closed below 5-week lows.
The S&P 500 Composite (SPX, 1,286.94) fell 5.34 points or 0.41% on Monday, August 1, 2011.
S&P 500 Cash Index Potential Resistance
1370.50, 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
S&P 500 Cash Index Potential Support
1274.73, low of 8/1/11
1258.07, low of 6/16/11
1249.05, low of 3/16/11
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Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) closed further above the highs of the previous 8 months on 8/1/11, confirming a significant uptrend.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell further below its 20-, and 50-, and 200-day simple moving averages on 7/29/11, confirming a significant bearish trend. JNK/LQD broke down below 9-month lows on 6/16/11.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) rose above the highs of the previous 10 weeks on 7/28/11, suggesting a medium-term uptrend. TIP/IEF is rising above key SMAs of 20, 50, and 200 days. This means fixed-income investors currently prefer the inflation-protected TIPs over the unprotected 7-10 Year U.S. Treasury Note ETF (IEF).
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) fell below the lows of the previous 11 weeks on 7/26/11, again confirming a significant downtrend. In addition, on 7/21/11, UUP fell below the lower boundary line of a Symmetrical Triangle Consolidation Pattern from the low at 20.84 on 5/4/11. Support 20.91 and 20.84. Resistance 21.18, 21.74, 21.86, and 22.21.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below the lows of the previous 4 weeks on 7/29/11, suggesting a downtrend. DBA may be forming a bearish Descending Triangle Top Reversal Pattern since its high at 35.58 set on 3/4/11. Support 32.17, 31.65, and 31.46. Resistance 33.42, 34.83, and 35.58.
Crude Oil, United States Oil ETF (USO) fell below the lows of the previous 4 weeks and closed further below its 20-, 50-, and 200-day simple moving averages on 8/1/11, confirming a short-term downtrend. Support 36.46 and 35.14. Resistance 39.25, 40.74, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) rose above all-time highs on 7/29/11. The dominant trend remains bullish. In a world of too much debt, weak currencies, and self-serving politicians, investors around the globe seek the safety of gold as the only forever-true money. Support: 154.10, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: none.
Gold Mining Stocks ETF (GDX) Relative (to the Gold bullion ETF) Strength Ratio (GDX/GLD) fell further below its 50- and 200-day SMAs on 7/29/11. GDX/GLD fell below 27-month lows on 6/17/11, which was a bearish indication for the long term. The Ratio is down substantially since its peak on 4/8/11, and the main trend remains bearish.
Silver, iShares Silver Trust ETF (SLV) fell below 6-day lows on 8/1/11, confirming a minor price pullback or consolidation. Longer term, Silver appears to have emerged on the bullish side of a 2-month Triangle Consolidation. Support 37.23, 34.02, and 31.97. Resistance: 44.71 and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) fell below 11-day lows on 8/1/11, confirming a minor pullback. The SLV/GLD Ratio remains in a bullish position relative to 50- and 200-day SMAs.
Copper, iPath DJ-UBS Copper TR Sub-Idx ETN (JJC ) consolidated gains in recent days. JJC rose above the highs of the previous 3 months on 7/19/11, confirming a preexisting medium-term uptrend. JJC has been in a bullish trend since bottoming at 51.13 on 5/11/11. Strength in Copper suggests confidence in the economic outlook, while Weakness suggests doubts about the future. Support 56.92, 55.50, 52.93, 52.12, 51.13. Resistance: 57.48, 59.06, 60.04, and 61.69.
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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
5.35% , NVDA , NVIDIA
2.26% , OMX , OFFICEMAX INC., OMX
0.25% , IXP , Telecommunications Global, IXP
0.32% , IDU , Utilities DJ, IDU
0.51% , EMB , Bond EmrgMkt JPM iS, EMB
1.72% , MZZ , Short 200% MidCap 400 PS, MZZ
1.31% , FMCN , Focus Media, FMCN
0.72% , TTH , Telecom H, TTH
1.46% , MTB , M&T BANK
1.20% , IDX , Indonesia MV, IDX
1.67% , CMS , CMS ENERGY
0.43% , IYZ , Telecom DJ US, IYZ
1.06% , ODP , OFFICE DEPOT
1.41% , IFF , INTL FLAV & FRAG
0.19% , TLH , Bond 10-20 Year US Treas, TLH
1.01% , BIIB , BIOGEN IDEC
1.13% , COH , COACH
0.34% , RZV , Value SmallCap S&P 600, RZV
1.15% , RSH , RADIOSHACK
1.52% , JCI , JOHNSON CONTROLS
1.12% , PNC , PNC FINL SVC
1.18% , CTSH , Cognizant Technology Solutions
1.64% , VZ , VERIZON COMMS
0.87% , TDC , Teradata Corporation, TDC
0.61% , MYY , Short 100% MidCap 400, MYY
1.09% , PGN , PROGRESS ENERGY
0.91% , CVS , CVS
0.35% , RSX , Russia MV, RSX
0.30% , EPI , India Earnings WTree, EPI
0.32% , EWY , South Korea Index, EWY
0.47% , EPP , Pacific ex-Japan, EPP
0.71% , ROST , Ross Stores Inc
0.90% , DBA , Agriculture DB PS, DBA
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.80% , FEZ , Euro STOXX 50, FEZ
-1.54% , ADRU , Europe 100 BLDRS, ADRU
-1.26% , PPA , Aerospace & Defense, PPA
-6.18% , TEVA , Teva Pharmaceutical Industries Limited
-1.83% , IYH , Healthcare DJ, IYH
-2.88% , EWG , Germany Index, EWG
-2.96% , RF , REGIONS FINAN
-0.97% , IXJ , Healthcare Global, IXJ
-4.30% , CI , CIGNA
-5.68% , HMA , HEALTH MGMT STK A
-7.04% , HGSI , Human Genome Sciences Inc
-4.27% , BHH , Internet B2B H, BHH
-2.98% , HUM , HUMANA
-1.00% , NYC , LargeCap Blend NYSE Composite iS, NYC
-3.24% , UNH , UNITEDHEALTH GRP
-4.09% , TMO , THERMO ELECTRON
-0.47% , IYY , LargeCap Blend Total Market DJ, IYY
-3.26% , DGX , QUEST DIAG
-1.65% , IEV , Europe 350 S&P Index, IEV
-2.13% , RFV , Value MidCap S&P 400, RFV
-0.27% , IYK , Consumer Non-Cyclical, IYK
-0.98% , EWJ , Japan Index, EWJ
-2.89% , PDCO , Patterson Dental Company
-4.86% , SPLS , STAPLES
-0.52% , DBO , Oil Fund PowerShares, DBO
-0.39% , PSI , Semiconductors, PSI
-2.23% , LH , LAB CRP OF AMER
-2.80% , FEU , Value LargeCap Euro STOXX 50 DJ, FEU
-6.32% , LPX , LOUISIANA PAC
-2.89% , EWP , Spain Index, EWP
-0.30% , IXG , Financials Global LargeCap Value, IXG
-3.12% , WLP , WELLPOINT HEALTH
-3.17% , LLL , L-3 COMMS HLDGS
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.01% Chile MSCI iS, ECH
1.27% South Africa Index, EZA
1.20% Indonesia MV, IDX
0.91% Financial Preferred, PGF
0.90% Agriculture DB PS, DBA
0.67% Bond, 20+ Years Treasury, TLT
0.64% Hong Kong Index, EWH
0.53% Malaysia Index, EWM
0.51% Bond EmrgMkt JPM iS, EMB
0.50% Frontier Markets Guggenheim , FRN
0.47% Pacific ex-Japan, EPP
0.44% Emerging 50 BLDRS, ADRE
0.43% Telecom DJ US, IYZ
0.40% Taiwan Index, EWT
0.35% Russia MV, RSX
0.35% Singapore Index, EWS
0.32% South Korea Index, EWY
0.30% Utilities SPDR, XLU
0.30% India Earnings WTree, EPI
0.30% Utilities VIPERs, VPU
0.25% Thailand MSCI iS, THD
0.19% Canada Index, EWC
0.16% Latin Am 40, ILF
0.12% Bond, 10 Year Treasury, IEF
0.12% Australia Index, EWA
0.08% Preferred Stock iS, PFF
0.00% Commodity Tracking, DBC
-0.02% DIAMONDS (DJIA), DIA
-0.02% Bond Treasury Short-Term iS, SHV
-0.04% Bond, Aggregate, AGG
-0.05% Energy & Nat Res iS GS, IGE
-0.05% Energy VIPERs, VDE
-0.06% Financial Services DJ, IYG
-0.07% Energy DJ, IYE
-0.08% Technology SPDR, XLK
-0.08% Bond, Corp, LQD
-0.08% Emerging VIPERs, VWO
-0.08% Emerging Markets, EEM
-0.09% India PS, PIN
-0.10% Microcap Russell, IWC
-0.11% Bond, 1-3 Year Treasury, SHY
-0.11% Semiconductor iS IGW, SOXX
-0.14% Basic Materials DJ US, IYM
-0.14% Energy SPDR, XLE
-0.16% Bond, High-Yield Junk, JNK
-0.18% Pacific VIPERs, VPL
-0.18% Metals & Mining SPDR, XME
-0.21% LargeCap Blend S&P 100, OEF
-0.21% LargeCap Blend Russell 3000, IWV
-0.21% Technology DJ US, IYW
-0.23% Dividend DJ Select, DVY
-0.24% Dividend High Yield Equity PS, PEY
-0.24% Bond, TIPS, TIP
-0.24% WilderHill Clean Energy PS, PBW
-0.24% Value 1000 Russell, IWD
-0.25% Dividend International, PID
-0.26% Value VIPERs, VTV
-0.27% Capital Markets KWB ST, KCE
-0.27% Value S&P 500 B, IVE
-0.30% Bond Muni ATM-Free S&P iS, MUB
-0.30% Financial SPDR, XLF
-0.31% Financial DJ US, IYF
-0.31% Info Tech VIPERs, VGT
-0.32% Financials VIPERs, VFH
-0.32% Silver Miners Global X, SIL
-0.33% China 25 iS, FXI
-0.34% Materials SPDR, XLB
-0.36% Consumer Staples SPDR, XLP
-0.36% Gold Shares S.T., GLD
-0.38% Bond, High-Yield Corporate, HYG
-0.39% Value SmallCap S&P 600 B, IJS
-0.39% Dividend Appreciation Vipers, VIG
-0.40% Growth VIPERs, VUG
-0.43% S&P 500 SPDRs LargeCap Blend, SPY
-0.43% Value SmallCap VIPERS, VBR
-0.43% Energy Global, IXC
-0.45% Blend Total Market VIPERs, VTI
-0.45% LargeCap VIPERs, VV
-0.47% QQQ Nasdaq 100 Trust, QQQ
-0.47% MidCap S&P 400 iS, IJH
-0.47% S&P 500 iS LargeCap Blend, IVV
-0.48% Growth 1000 Russell, IWF
-0.49% Value SmallCap Russell 2000, IWN
-0.50% LargeCap 1000 R, IWB
-0.51% Growth S&P 500/BARRA, IVW
-0.52% Value LargeCap Dynamic PS, PWV
-0.52% Oil Fund PowerShares, DBO
-0.53% Consumer Discretionary SPDR, XLY
-0.53% Small Cap VIPERs, VB
-0.55% Growth SmallCap R 2000, IWO
-0.56% Dividend SPDR, SDY
-0.57% Mexico Index, EWW
-0.58% SmallCap S&P 600, IJR
-0.58% MidCap S&P 400 SPDRs, MDY
-0.59% Oil, Crude, U.S. Oil Fund, USO
-0.60% Growth MidCap 400 B, IJK
-0.62% United Kingdom Index, EWU
-0.63% Turkey MSCI iS, TUR
-0.63% Industrial SPDR, XLI
-0.65% Water Resources, PHO
-0.65% SmallCap Russell 2000, IWM
-0.65% Small Cap EAFE MSCI iS, SCZ
-0.67% Brazil Index, EWZ
-0.67% Growth SmallCap VIPERs, VBK
-0.68% Value MidCap S&P 400 B, IJJ
-0.68% China LargeCap Growth G D H USX PS, PGJ
-0.72% Growth MidCap Russell, IWP
-0.73% Growth EAFE MSCI, EFG
-0.73% Global ex US ACWI iS, ACWX
-0.73% Bond Ex-US Treas, BWX
-0.73% Global 100, IOO
-0.76% LargeCap Blend S&P=Weight R, RSP
-0.76% Switzerland Index, EWL
-0.78% MidCap Russell, IWR
-0.85% Growth BARRA Small Cap 600, IJT
-0.87% Semiconductor SPDR, XSD
-0.87% Value MidCap Russell, IWS
-0.98% Japan Index, EWJ
-1.01% Transportation Av DJ, IYT
-1.19% Homebuilders SPDR, XHB
-1.23% Netherlands Index, EWN
-1.26% EAFE Index, EFA
-1.31% Biotech SPDR, XBI
-1.32% Real Estate US DJ, IYR
-1.33% Austria Index, EWO
-1.44% Silver Trust iS, SLV
-1.44% Networking, IGN
-1.49% REIT Wilshire, RWR
-1.50% Value EAFE MSCI, EFV
-1.51% REIT VIPERs, VNQ
-1.65% Europe 350 S&P Index, IEV
-1.70% Health Care SPDR, XLV
-1.73% Belgium Index, EWK
-1.74% European VIPERs, VGK
-1.76% Realty Cohen & Steers, ICF
-1.99% France Index, EWQ
-2.37% Sweden Index, EWD
-2.45% EMU Europe Index, EZU
-2.88% Germany Index, EWG
-2.89% Spain Index, EWP
-3.61% Italy Index, EWI
