A Lesson on Media Reports

Gold, SPDR Gold Shares ETF (GLD) fell below its 50-day SMA, thereby turning systematically bearish.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price fell to its lowest level in 8 months, thereby confirming its major bearish trend. 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.

The S&P 500 (SPX: 1,365.00) fell 10.14 points or 0.74% on Thursday and broke down below the lows of the previous 4 trading days. NYSE trading volume fell 5%.

Neither the Fed nor the ECB offered much for speculators this week–just as I suspected, but it seemed to catch by surprise those who believe what the mass media puts out. The ECB’s Mario Draghi suggested that the media got carried away, reading into his London speech things he did not actually say or intend. Why does the media blow stories out of proportion? Who benefits? Think about it. This is a good lesson in why we should trade based on technical analysis and ignore media reports.

Technical market conditions suggest that downside risk still may exceed upside potential for the stock market. Choosing safety over risk appears to be the most reasonable approach for conservative traders and investors.

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Hedge funds and equity mutual funds both lost money last year, 2011, and some are down again this year as well.

Meanwhile, one money manager made gains for 5 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).

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AAII Sentiment rose into the neutral zone. According to the AAII weekly survey of individual investors reported on 8/2/12, there were 30.45% Bulls and 34.93% Bears. This is in the typical range, and so it is neutral.

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
1391.74, high of 7/30/2012
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
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1370.58, high of 5/2/2011

The S&P 500 Composite Potential Support
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
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
1340.04, 50-day SMA
1335.52, high of 6/11/2012
1334.93, high of 5/31/2012
1329.24, low of 7/24/2012
1329.05, high of 6/7/2012
1328.49, high of 5/22/2012
1326.19, Fibonacci 38.2% of April-June 2012 range
1325.41, low of 7/12/2012
1321.26, 200-day SMA
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
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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Tangible Assets, Commodities

U.S. dollar ETF (UUP) rose above its 50-day SMA on 8/1/12, turning systematically bullish again. UUP remains above its 200-day SMA, and its 50-day SMA has stayed above its 200-day SMA every day since 10/26/11. Support 22.38, 22.14, 21.89, 21.74, 21.58, 21.07, and 20.84. Resistance 23.14, 23.52, 25.84, 27.19, 28.97.

CRB Commodity Price Index remains systematically neutral: above its 50-day SMA, below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 8/18/11.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) remains systematically neutral: above its 50-day SMA, above its 200-day SMA, but its 50-day SMA has remained below its 200-day SMA every day since 8/8/11. The 50-200 spread has been narrowing since late June but still may be weeks away from the 2 SMAs meeting. A trend of rising food prices could bring trouble for the general economy because more consumer spending for food means less consumer spending available for other goods and services.

Crude Oil, United States Oil ETF (USO) turned systematically neutral on 7/16/12, when price rose above its 50-day SMA. USO remains far below its 200-day SMA, and its 50-day remains far below its 200-day SMA. Support 32.45, 31.40, 29.02, 26.28, and 22.74. Resistance 34.84, 35.19, 36.97, 40.29, 41.38, 42.30, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) fell below its 50-day SMA on 8/2/12, thereby turning systematically bearish: below its 50-day SMA, below its 200-day SMA, and with its 50-day SMA below the 200-day SMA every day since 4/17/12. 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) price whipsawed back down below its 50-day SMA on 8/1/12, thereby turning systematically bearish again. SLV remains below its 200-day SMA, and its 50-day SMA has remained 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) price fell to its lowest level in 8 months on 8/2/12, thereby confirming its major bearish trend. JJC price fell below its 50-day SMA on 8/1/12, remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 5/31/12. In addition, JJC remains far below its 2011 high at 61.69 and has underperformed the stock market since 12/31/10. Given that “Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, this relative 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 later revealed to be deal stocks 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
12.75% , GPS , GAP
17.14% , OMX , OFFICEMAX INC., OMX
6.83% , GILD , Gilead Sciences Inc
7.56% , LNC , LINCOLN NATL
5.17% , PRU , PRUDENTIAL FINL
4.54% , SNI , Scripps Networks Interactive
3.41% , K , KELLOGG
1.82% , TDC , Teradata Corporation, TDC
2.60% , TJX , TJX
4.17% , MET , METLIFE
1.92% , LTD , LIMITED BRANDS
4.03% , CI , CIGNA
1.49% , TMK , TORCHMARK
0.34% , ADRA , Asia 50 BLDRS, ADRA
1.84% , CMI , CUMMINS
1.61% , KLAC , KLA TENCOR
0.50% , MYY , Short 100% MidCap 400, MYY
1.87% , SYMC , SYMANTEC
2.41% , ODP , OFFICE DEPOT
0.54% , UNM , UNUMPROVIDENT
1.51% , SDS , Short 200% S&P 500 PS, SDS
1.42% , EMN , EASTMAN CHEM
2.70% , TWX , TIME WARNER INC
1.07% , MZZ , Short 200% MidCap 400 PS, MZZ
1.72% , PETM , PETsMART Inc
2.14% , LEN , Lennar Corp. (LEN)
1.62% , DHI , D.R. HORTON, DHI
1.12% , MON , MONSANTO
0.68% , DOG , Short 100% Dow 30, DOG
0.34% , MHP , MCGRAW HILL
0.92% , AES , AES
1.90% , FMCN , Focus Media, FMCN
0.36% , ABT , ABBOTT LABS

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-64.08% , MTG , MGIC INVESTMENT
-16.77% , SEE , SEALED AIR
-8.57% , BMY , BRISTOL MYERS
-1.07% , FPX , IPOs, First Tr IPOX-100, FPX
-1.60% , TMW , Wilshire 5000 ST TM, TMW
-2.95% , EWO , Austria Index, EWO
-0.57% , PWC , LargeCap Blend Dynamic PS, PWC
-4.36% , EWI , Italy Index, EWI
-1.96% , EIS , Israel MSCI iS, EIS
-1.67% , PXE , Energy Exploration & Prod, PXE
-0.97% , PUI , Utilities, PUI
-1.64% , DGT , Global Titans, DGT
-5.42% , ETFC , E*TRADE FINANCIAL
-3.31% , PCAR , PACCAR
-2.86% , EWQ , France Index, EWQ
-2.46% , EWN , Netherlands Index, EWN
-3.53% , NWL , NEWELL RUBBER
-1.49% , MTK , Technology MS sT, MTK
-2.59% , EWG , Germany Index, EWG
-2.01% , DBO , Oil Fund PowerShares, DBO
-3.65% , MBI , MBIA
-1.12% , KLD , LargeCap Blend Socially Responsible iS, KLD
-3.86% , CAH , CARDINAL HEALTH
-0.77% , RSP , LargeCap Blend S&P=Weight R, RSP
-2.40% , URBN , Urban Outfitters Inc.
-4.93% , APA , APACHE
-0.69% , VIA.O , VIACOM INC. (New)
-2.65% , DISH , EchoStar Communications
-1.85% , VDE , Energy VIPERs, VDE
-3.99% , CIEN.O , CIENA
-3.38% , ECL , ECOLAB
-5.64% , EWP , Spain Index, EWP
-3.32% , PH , PARKER HANNIFIN
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.54% WilderHill Clean Energy PS, PBW
0.64% Bear, Short S&P 500, SH
0.62% Homebuilders SPDR, XHB
0.57% Bond, 20+ Years Treasury, TLT
0.56% Semiconductor SPDR, XSD
0.39% Mexico Index, EWW
0.29% REIT VIPERs, VNQ
0.28% Preferred Stock iS, PFF
0.25% Consumer Discretionary SPDR, XLY
0.24% Bond, 10 Year Treasury, IEF
0.22% Realty Cohen & Steers, ICF
0.11% Real Estate US DJ, IYR
0.08% REIT Wilshire, RWR
0.07% Bond EmrgMkt JPM iS, EMB
0.07% Bond, Corp, LQD
0.02% Bond, Aggregate, AGG
0.01% Growth BARRA Small Cap 600, IJT
0.01% Bond, 1-3 Year Treasury, SHY
0.01% Bond Treasury Short-Term iS, SHV
0.00% Bond Muni ATM-Free S&P iS, MUB
-0.02% Bond, TIPS, TIP
-0.10% SmallCap S&P 600, IJR
-0.11% Water Resources, PHO
-0.11% Financial Preferred, PGF
-0.12% South Africa Index, EZA
-0.15% Transportation Av DJ, IYT
-0.18% Bond Ex-US Treas, BWX
-0.22% Australia Index, EWA
-0.23% Growth SmallCap R 2000, IWO
-0.29% Microcap Russell, IWC
-0.32% Growth MidCap 400 B, IJK
-0.36% QQQ Nasdaq 100 Trust, QQQ
-0.36% Hong Kong Index, EWH
-0.36% SmallCap Russell 2000, IWM
-0.37% Technology DJ US, IYW
-0.38% Bond, High-Yield Junk, JNK
-0.40% Value SmallCap S&P 600 B, IJS
-0.40% Bond, High-Yield Corporate, HYG
-0.42% Malaysia Index, EWM
-0.43% Growth MidCap Russell, IWP
-0.45% Japan Index, EWJ
-0.45% Turkey MSCI iS, TUR
-0.45% Info Tech VIPERs, VGT
-0.46% Pacific VIPERs, VPL
-0.47% Growth SmallCap VIPERs, VBK
-0.47% Switzerland Index, EWL
-0.48% MidCap S&P 400 SPDRs, MDY
-0.50% Growth VIPERs, VUG
-0.51% Industrial SPDR, XLI
-0.51% Value SmallCap VIPERS, VBR
-0.51% Pacific ex-Japan, EPP
-0.53% Growth 1000 Russell, IWF
-0.54% Small Cap VIPERs, VB
-0.56% Value SmallCap Russell 2000, IWN
-0.56% Utilities SPDR, XLU
-0.57% MidCap Russell, IWR
-0.59% Semiconductor iS IGW, SOXX
-0.61% Dividend Appreciation Vipers, VIG
-0.61% MidCap S&P 400 iS, IJH
-0.62% LargeCap 1000 R, IWB
-0.63% Dividend DJ Select, DVY
-0.65% Gold Shares S.T., GLD
-0.65% Technology SPDR, XLK
-0.65% LargeCap VIPERs, VV
-0.66% Taiwan Index, EWT
-0.67% LargeCap Blend Russell 3000, IWV
-0.67% Value LargeCap Dynamic PS, PWV
-0.67% Utilities VIPERs, VPU
-0.68% Frontier Markets Guggenheim , FRN
-0.68% Singapore Index, EWS
-0.69% Blend Total Market VIPERs, VTI
-0.69% S&P 500 SPDRs LargeCap Blend, SPY
-0.69% LargeCap Blend S&P 100, OEF
-0.69% S&P 500 iS LargeCap Blend, IVV
-0.70% DIAMONDS (DJIA), DIA
-0.71% Financial DJ US, IYF
-0.71% Telecom DJ US, IYZ
-0.72% Thailand MSCI iS, THD
-0.74% Sweden Index, EWD
-0.74% Financials VIPERs, VFH
-0.75% Growth S&P 500/BARRA, IVW
-0.75% Value S&P 500 B, IVE
-0.75% Dividend High Yield Equity PS, PEY
-0.75% Financial SPDR, XLF
-0.77% LargeCap Blend S&P=Weight R, RSP
-0.82% Consumer Staples SPDR, XLP
-0.82% Value MidCap Russell, IWS
-0.82% China LargeCap Growth G D H USX PS, PGJ
-0.84% Commodity Tracking, DBC
-0.86% Value MidCap S&P 400 B, IJJ
-0.86% Value 1000 Russell, IWD
-0.87% Silver Trust iS, SLV
-0.87% Small Cap EAFE MSCI iS, SCZ
-0.91% Latin Am 40, ILF
-0.91% Dividend SPDR, SDY
-0.96% Value VIPERs, VTV
-0.96% Health Care SPDR, XLV
-0.97% Emerging 50 BLDRS, ADRE
-0.99% China 25 iS, FXI
-1.03% Canada Index, EWC
-1.06% Agriculture DB PS, DBA
-1.09% United Kingdom Index, EWU
-1.09% Dividend International, PID
-1.12% Chile MSCI iS, ECH
-1.14% Networking, IGN
-1.17% Emerging Markets, EEM
-1.18% Materials SPDR, XLB
-1.18% Basic Materials DJ US, IYM
-1.26% India Earnings WTree, EPI
-1.27% Brazil Index, EWZ
-1.28% Financial Services DJ, IYG
-1.30% Growth EAFE MSCI, EFG
-1.32% Global 100, IOO
-1.34% Global ex US ACWI iS, ACWX
-1.40% Emerging VIPERs, VWO
-1.40% EAFE Index, EFA
-1.47% Value EAFE MSCI, EFV
-1.51% Russia MV, RSX
-1.55% Energy Global, IXC
-1.67% Energy SPDR, XLE
-1.68% India PS, PIN
-1.69% Energy DJ, IYE
-1.72% Oil, Crude, U.S. Oil Fund, USO
-1.83% Indonesia MV, IDX
-1.85% Energy VIPERs, VDE
-1.85% Energy & Nat Res iS GS, IGE
-1.89% Metals & Mining SPDR, XME
-1.91% Europe 350 S&P Index, IEV
-1.95% Capital Markets KWB ST, KCE
-1.98% Biotech SPDR, XBI
-2.00% European VIPERs, VGK
-2.01% Oil Fund PowerShares, DBO
-2.17% South Korea Index, EWY
-2.27% Belgium Index, EWK
-2.46% Netherlands Index, EWN
-2.59% Germany Index, EWG
-2.86% France Index, EWQ
-2.95% Austria Index, EWO
-3.06% EMU Europe Index, EZU
-4.36% Italy Index, EWI
-5.64% Spain Index, EWP