NASDAQ Composite/S&P 500 Relative Strength Ratio fell below 8-month lows on 6/17/11. Absolute price closed below 6-month closing price lows on 6/17/11. The NASDAQ Advance-Decline Line fell to a new 9-month low last week. All confirm a significant downtrend.
S&P 500 Composite (SPX, 1,271.50) rose modestly, up 3.86 points or 0.30% on Friday 6/17/11–but SPX fell below 3-month lows just the day before. Small counter trend fluctuations do not change the clear intermediate-term downtrend.
Crude Oil nearest futures contract price broke down below the lows of the past 4 months on 6/17/11, confirming a significant downtrend.
Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) fell further below 27-month lows on 6/17/11. The Ratio has been falling steeply since 4/8/11 and remains bearish. GDX is offering a bearish divergence relative to GLD, and that might be taken as a warning about prospects for GLD, Gold futures, bullion, and coins.
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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
x 3.95% , EWP , Spain Index, EWP
0.87% , NY , Value LargeCap NYSE 100 iS, NY
7.01% , SNV , SYNOVUS
1.19% , PSTL , Steel Global PS ETF, PSTL
5.89% , SNI , Scripps Networks Interactive
1.57% , IXG , Financials Global LargeCap Value, IXG
2.04% , EWI , Italy Index, EWI
5.28% , NYT , NY TIMES STK A
0.30% , PUI , Utilities, PUI
3.73% , SHLD , SEARS HOLDINGS
0.77% , NYC , LargeCap Blend NYSE Composite iS, NYC
3.36% , PCAR , PACCAR
1.89% , FO , FORTUNE BRANDS
4.55% , AN , AUTONATION
2.03% , GRMN , GARMIN LTD
1.93% , CR , CRANE
1.31% , BIIB , BIOGEN IDEC
1.72% , OMX , OFFICEMAX INC., OMX
1.91% , EWN , Netherlands Index, EWN
1.79% , RF , REGIONS FINAN
1.53% , BF.B , BROWN FORMAN STK B
2.72% , KEY , KEYCORP
2.16% , EZU , EMU Europe Index, EZU
1.20% , EK , EASTMAN KODAK
2.18% , JNY , JONES APPAREL
1.66% , EWG , Germany Index, EWG
3.30% , EP , EL PASO
1.04% , HSIC , Henry Schein Inc
2.20% , FITB , FIFTH THIRD BANC
1.85% , LM , LEGG MASON
1.03% , IDX , Indonesia MV, IDX
3.35% , ZION , ZIONS
3.86% , FHN , First Horizon National
x
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.65% , ADRU , Europe 100 BLDRS, ADRU
-21.45% , RIMM , RESEARCH IN MOTION LTD
-1.25% , PIC , Insurance, PIC
-4.21% , MRVL , MARVELL TECHNOLOGY
-3.58% , MHP , MCGRAW HILL
-2.70% , ININ , Interactive Intelligence ININ
-5.02% , MCO , MOODYS CORP
-4.40% , FLEX , Flextronics International Ltd
-1.17% , ADRA , Asia 50 BLDRS, ADRA
-3.69% , NBR , NABORS
-2.83% , PNC , PNC FINL SVC
-3.17% , RFMD , RF Micro Devices Inc
-3.07% , GOOG , Google
-0.99% , XSD , Semiconductor SPDR, XSD
-1.62% , DBO , Oil Fund PowerShares, DBO
-2.14% , CTXS , CITRIX SYSTEMS
-2.07% , ADSK , AUTODESK
-0.97% , XBI , Biotech SPDR, XBI
-1.63% , APOL , APOLLO GROUP
-1.65% , BBBY , BED BATH BEYOND
-2.38% , NVDA , NVIDIA
-1.85% , LVLT , LEVEL 3 COMMUNICATIONS
-0.91% , MOLX , MOLEX
-1.82% , STLD , Steel Dynamics, STLD
-1.48% , SOXX , Semiconductor iS IGW, SOXX
-1.07% , INTC , INTEL
-1.07% , ADBE , ADOBE SYS
-1.67% , JBL , JABIL CIRCUIT
-1.03% , TIN , TEMPLE INLAND
-0.88% , HUM , HUMANA
-0.74% , ZMH , ZIMMER HLDGS
-0.51% , XLK , Technology SPDR, XLK
-2.14% , LRCX , LAM RESEARCH CORP
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9 major U.S. stock sectors ranked in order of long-term relative strength — Now available by subscription:
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Crude Oil nearest futures contract price broke down below the lows of the past 4 months on 6/17/11, confirming a significant downtrend. Recent data from the Commodity Futures Trading Commission showed hedge-fund and other money managers increased net long positions in Oil–which could prove to be bearish when this hot money rushes for the exits. On 5/3/11, when Crude Oil was 111.56, I wrote, “Crude Oil nearest futures contract price fell below the lows of the previous 7 trading days on 5/3/11, suggesting a short-term price pullback.” Support 87.09, 83.85, 83.55, 80.28, 80.06, 79.84, 79.25, 78.86, 73.52, 72.63, 70.76, 70.35, 69.51, 68.59, 67.15, 65.05, and 64.24. Resistance 103.39, 104.60, 105.16, 114.83, 115.27, 120.42, 130.0, and 147.27.
Gold nearest futures contract price recovered somewhat over the past 4 trading days. Gold broke down below 2-week lows on 6/13/11, however, confirming a short-term downtrend. On 6/9/11, when Gold was 1542.7, I noted that Gold “appears to have stalled out since 6/6/11. Gold’s 5-week countertrend bounce might be weakening. Reward/Risk does not appear attractive. It seems possible that Gold has finally topped out at 1577.4 after rising 132% from 681 in October, 2008.” Support: 1511.4, 1462.5, 1445.0, 1411.5, 1380.7, 1419.5, 1351.4, 1309.1, 1307.7, 1297.0, 1274.8, 1270.5, 1232.4, 1210.9, 1191.5, and 1155.6. Resistance: 1555.0, 1577.4.
Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) fell further below 27-month lows on 6/17/11. The Ratio has been falling steeply since 4/8/11 and remains bearish. GDX is offering a bearish divergence relative to GLD, and that might be taken as a warning about prospects for GLD, Gold futures, bullion, and coins.
Silver nearest futures contract price broke down below 3-week lows on 6/13/11, reconfirming a downside correction. Silver fell 35% from 49.82 on 4/25/11 to 32.3 on 5/12/11, breaking down below 10-week lows. On 5/2/11, when Silver was 46.084, I wrote, “Silver nearest futures contract price broke sharply below the lows of the previous 2 weeks. The short-term price trend has turned down. If this downtrend continues, it could have implications for inflation expectations.” Support 34.4, 32.3, 31.695, 31.61, 30.265, 29.635, 26.30, 24.98, and 22.84. Resistance: 37.86, 38.845, 39.38, 39.47, 49.82, 49.845 and 50.35.
Silver/Gold Ratio entered a steep downtrend since the peak on 4/28/11. Although the Ratio has stabilized somewhat since making a low on 5/16/11, it probably remains bearish.
Copper nearest futures contract price has been trading choppy/sideways for the past few weeks. Longer term, Copper broke down below previous 5-month lows on 5/12/11, confirming an intermediate-term correction, if not a bear market. Weakness in Copper suggests doubts about the economic outlook. Support 3.9505, 3.8535, 3.846, 3.6065, 3.3930, 3.1775, 2.9285, 2.8555, 2.8445, and 2.72. Resistance: 4.2125, 4.402, 4.533, 4.554, 4.6495, 4.6535, and 4.6575.
U.S. Treasury Bond nearest futures contract price consolidated gains after breaking out above the highs of the previous 7 months on 6/16/11–and thereby reconfirming a significant uptrend. In its favor, nearly everyone has been talking bearish on Bonds this year, so the Bond is rising up off an extreme oversold condition. Support 123.23, 123.18, 120.20, 119.15, 117.28, 117.04, 116.26, 115.15, 114.06, 113.04, and 112.15. Resistance 127.19, 128.00 129.14, 129.27, 132.26, 133.00, 135.12, 135.19, 136.31, 137.31, and 142.31.
Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) broke further below 9-month lows on 6/16/11. Absolute price of JNK also broke down below 9-month lows on 6/16/11. Both confirm a bearish trend for JNK.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell below the lows of the previous 6 months on 6/16/11, again reconfirming a significant downtrend. TIP/IEF entered a downtrend after peaking on 4/8/11. This downtrend means that fixed-income investors prefer the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs. Inflation expectations are still waning.
The U.S. dollar nearest futures contract price surrendered a normal fraction of recent gains on 6/17/11. USD closed above the highs of the past 3 weeks on 6/16/11, which was a bullish indication for the short-term trend. In addition, the larger trend of the USD has been firming since making the low at 73.325 on 5/2/11. Support 73.88, 73.515, 73.325, 72.86, and 70.80. Resistance 76.54, 76.87, 76.98, 77.675, 78.98, 79.34, 81.635, 81.935, 82.02, 83.64, 84.73, 85.36, 86.71, 88.80, 89.22, 89.71, and 92.53.
Advisory Service Sentiment: There were 37% Bulls versus 26% Bears as of 6/15/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. This is near normal, since the Ratio’s 20-year range is 0.41 to 3.74, the median is 1.56, and the mean is 1.64. Note that Advisory Service Sentiment as of 4/6/11 rose to 3.65, its highest level in the 8 years since the 20-year high of 3.74 set on 6/18/03. The market has been working off that excess by correcting to the downside.
VIX Fear Index rose above 3-month highs to 22.73 on 6/16/11, indicating a relatively modest uptick in fear. For comparison, there was a brief spike up to an intraday peak of 31.28 on 3/16/11. 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.
On 5/2/11, when the S&P 500 Composite (SPX) was 1,358.59, I warned, “The majority of major stock price indexes opened higher on gaps but reversed to close with losses on the day. This may signal exhaustion of the short-term uptrend. Sentiment indicators have been suggesting that the stock market may be over loved and overbought. And in view of the sharp reversals in the metal commodities, the so-called “inflation trade”, when speculators buy stocks and sell fixed-income instruments based on expectations of rising price levels for goods and services, may be on thin ice.”
Based on the daily SPX, momentum indicators gave bearish divergence warnings in April; that is, they never made it back to their February peaks when the price indexes rose to higher highs. These bearish divergence warnings are still in effect.
S&P 500 Composite (SPX, 1,271.50) rose 3.86 points or 0.30% on Friday 6/17/11.
S&P 500 Cash Index 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
1370.50, high of 5/2/11
1359.44, high of 5/10/11
1346.82, high of 5/19/11
1294.70, low of 4/18/11
S&P 500 Cash Index Potential Support
1249.05, low of 3/16/11
1246.73, high of 12/13/10
1238.81, Fibonacci 78.6% of 1,576.09 high
1235.05, high of 12/7/10
1232.85, low of 12/16/10
1228.74, Fibonacci 61.8% of 2007-2009 range
1227.08, high of 11/5/10
1173.00, low of 11/16/10
1171.70, low of 10/27/10
1166.74, low of 10/20/10
1159.71, low of 10/19/10
1,151.41, low of 10/7/10
1,131.87, low of 10/4/10
1122.79, low of 9/23/2010
1114.63, low of 9/15/2010
1110.88, low of 9/10/2010
1091.15, low of 9/7/2010
1039.70, low of 8/27/10
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
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
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
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
One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
3.95% Spain Index, EWP
2.16% EMU Europe Index, EZU
2.07% Turkey MSCI iS, TUR
2.04% Italy Index, EWI
2.03% Belgium Index, EWK
1.91% Netherlands Index, EWN
1.84% France Index, EWQ
1.76% Sweden Index, EWD
1.66% Germany Index, EWG
1.64% Austria Index, EWO
1.62% European VIPERs, VGK
1.55% Malaysia Index, EWM
1.55% Bond, High-Yield Junk, JNK
1.30% Value EAFE MSCI, EFV
1.25% Europe 350 S&P Index, IEV
1.19% Australia Index, EWA
1.18% Chile MSCI iS, ECH
1.10% Bond, High-Yield Corporate, HYG
1.10% Transportation Av DJ, IYT
1.06% Frontier Markets Guggenheim , FRN
1.04% Realty Cohen & Steers, ICF
1.04% South Africa Index, EZA
1.03% Indonesia MV, IDX
0.98% EAFE Index, EFA
0.95% REIT VIPERs, VNQ
0.93% Small Cap EAFE MSCI iS, SCZ
0.87% Silver Trust iS, SLV
0.85% Real Estate US DJ, IYR
0.84% Financial Services DJ, IYG
0.83% Pacific ex-Japan, EPP
0.81% Homebuilders SPDR, XHB
0.81% Financial DJ US, IYF
0.81% United Kingdom Index, EWU
0.79% Growth EAFE MSCI, EFG
0.77% Financials VIPERs, VFH
0.70% Capital Markets KWB ST, KCE
0.69% Global ex US ACWI iS, ACWX
0.68% Financial Preferred, PGF
0.68% Utilities VIPERs, VPU
0.65% Gold Shares S.T., GLD
0.65% Global 100, IOO
0.63% Preferred Stock iS, PFF
0.55% Latin Am 40, ILF
0.55% Financial SPDR, XLF
0.55% Pacific VIPERs, VPL
0.54% Dividend DJ Select, DVY
0.48% Value VIPERs, VTV
0.47% WilderHill Clean Energy PS, PBW
0.47% Dividend High Yield Equity PS, PEY
0.46% Value MidCap Russell, IWS
0.46% Value 1000 Russell, IWD
0.45% Brazil Index, EWZ
0.45% Value S&P 500 B, IVE
0.40% Consumer Discretionary SPDR, XLY
0.37% Telecom DJ US, IYZ
0.37% Bond Ex-US Treas, BWX
0.35% Japan Index, EWJ
0.34% Value SmallCap VIPERS, VBR
0.34% Value SmallCap S&P 600 B, IJS
0.32% S&P 500 iS LargeCap Blend, IVV
0.32% Blend Total Market VIPERs, VTI
0.31% Dividend Appreciation Vipers, VIG
0.30% LargeCap Blend Russell 3000, IWV
0.28% Agriculture DB PS, DBA
0.27% LargeCap 1000 R, IWB
0.26% Value MidCap S&P 400 B, IJJ
0.26% LargeCap VIPERs, VV
0.23% REIT Wilshire, RWR
0.23% MidCap Russell, IWR
0.23% LargeCap Blend S&P 100, OEF
0.22% Water Resources, PHO
0.21% Value SmallCap Russell 2000, IWN
0.18% Growth S&P 500/BARRA, IVW
0.18% DIAMONDS (DJIA), DIA
0.17% Emerging VIPERs, VWO
0.17% MidCap S&P 400 iS, IJH
0.16% Growth VIPERs, VUG
0.13% Emerging Markets, EEM
0.12% Energy Global, IXC
0.12% Growth MidCap Russell, IWP
0.10% LargeCap Blend S&P=Weight R, RSP
0.09% Bond, Aggregate, AGG
0.08% Growth MidCap 400 B, IJK
0.08% Singapore Index, EWS
0.07% Growth 1000 Russell, IWF
0.05% Small Cap VIPERs, VB
0.05% Mexico Index, EWW
0.04% Bond, Corp, LQD
0.03% SmallCap Russell 2000, IWM
0.02% Bond, 1-3 Year Treasury, SHY
0.00% Silver Miners Global X, SIL
0.00% Hong Kong Index, EWH
0.00% China 25 iS, FXI
0.00% Bond Treasury Short-Term iS, SHV
-0.01% Bond Muni ATM-Free S&P iS, MUB
-0.04% SmallCap S&P 600, IJR
-0.05% Bond EmrgMkt JPM iS, EMB
-0.05% Bond, TIPS, TIP
-0.06% Industrial SPDR, XLI
-0.07% Bond, 10 Year Treasury, IEF
-0.08% MidCap S&P 400 SPDRs, MDY
-0.08% Consumer Staples SPDR, XLP
-0.08% Basic Materials DJ US, IYM
-0.11% Switzerland Index, EWL
-0.13% Taiwan Index, EWT
-0.15% South Korea Index, EWY
-0.17% Energy & Nat Res iS GS, IGE
-0.18% India Earnings WTree, EPI
-0.19% Growth SmallCap VIPERs, VBK
-0.20% S&P 500 SPDRs LargeCap Blend, SPY
-0.20% Canada Index, EWC
-0.21% Energy VIPERs, VDE
-0.21% Russia MV, RSX
-0.23% Growth SmallCap R 2000, IWO
-0.26% Health Care SPDR, XLV
-0.27% Microcap Russell, IWC
-0.27% Info Tech VIPERs, VGT
-0.29% Technology DJ US, IYW
-0.29% Energy DJ, IYE
-0.31% Value LargeCap Dynamic PS, PWV
-0.32% Growth BARRA Small Cap 600, IJT
-0.33% Utilities SPDR, XLU
-0.35% Thailand MSCI iS, THD
-0.36% India PS, PIN
-0.38% Dividend SPDR, SDY
-0.44% Commodity Tracking, DBC
-0.44% Metals & Mining SPDR, XME
-0.47% Bond, 20+ Years Treasury, TLT
-0.51% Technology SPDR, XLK
-0.54% QQQ Nasdaq 100 Trust, QQQ
-0.56% Materials SPDR, XLB
-0.62% Energy SPDR, XLE
-0.83% Dividend International, PID
-0.97% Emerging 50 BLDRS, ADRE
-0.97% Biotech SPDR, XBI
-0.99% Semiconductor SPDR, XSD
-1.36% China LargeCap Growth G D H USX PS, PGJ
-1.48% Semiconductor iS IGW, SOXX
-1.51% Networking, IGN
-1.62% Oil Fund PowerShares, DBO
-2.11% Oil, Crude, U.S. Oil Fund, USO
