Widely-owned Apple (AAPL) rose 7% in after-hours trading on news of stronger than expected sales and earnings. The entire stock market is generally expected to benefit from this positive surprise. The strength of the stock market after the expected higher opening might offer a “tell” as to the real strength of the market’s hand.
The S&P 500 Composite (SPX: 1,371.97) rose 0.37% on Tuesday. NYSE volume fell 1%, suggesting relatively sluggish demand for stocks.
A variety of technical indicators have been demonstrating waning bullish momentum for stocks. A downside correction or shakeout has seemed overdue, according to past norms.
Following unusually large price run ups, such as Q1 2012, stocks become more vulnerable to sudden reversals. Potential Reward relative to potential Risk remains unattractive for stocks at this time.
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Equity Mutual Funds lost 6% in 2011, according to Lipper Research Services.
Hedge funds lost 5%, according to COO Connect.
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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9 major U.S. stock sectors ranked in order of long-term relative strength:
Available by subscription only (click here).
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Stock Market Indicators
The Dow Theory signaled a downside Secondary Reaction on 4/9/12, as both Industrials and Transports fell below their lows of the previous 3 weeks. The Averages gave an early warning by diverging after 2/3/12, as the Transports turned corrective and failed to confirm higher highs by the Industrials.
NASDAQ Composite/S&P 500 Relative Strength Ratio fell below the lows of the previous 11 weeks and closed further below its 50-day SMA on 4/24/12. Absolute price fell below the lows of the previous 6 weeks and closed further below its 50-day SMA on 4/23/12. Both confirmed a significant downside correction.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 2 months on 3/29/12, reconfirming its bearish trend. Systematically, BKF/SPY remains bearish below its 50-day SMA, below its 200-day SMA, and with the 50-day SMA below the 200-day SMA every day since 1/13/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below its lows of the previous 3 months on 4/24/12, reconfirming its bearish trend. EEM/SPY remains below its 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained below the 200-day SMA every day since 2/3/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) reconfirmed a bearish major trend when it fell below its lows of the previous 8 years on 4/5/12. Systematically, EFA/SPY remains bearish below its 50-day and 200-day SMAs, and the 50-day SMA has remained below the 200-day SMA consistently every day since 1/14/11. Don’t be fooled by the minor stabilization over the past 2 weeks–the important trend is bearish.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below its lows of the previous 5 weeks on 4/19/12, suggesting a minor pullback within its major bullish trend. OEX/SPX remains above its 50-day and 200-day SMAs, and the 50-day SMA has remained 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. On the other side of the coin, 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 relatively weak for a year, since 4/5/11. IWM/SPY fell further below its lows of the previous 4 months on 4/10/12, reconfirming renewed downside momentum for the medium term. Systematically, IWM/SPY returned to bearish status again on 4/20/12 when the 50-day SMA crossed below the 200-day SMA.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) has been relatively weak since 4/5/11. MDY/SPY fell below its lows of the previous 3 months on 4/10/12, reconfirming downside momentum for the medium term. Systematically, MDY/SPY remains technically neutral, below both its 50-day and 200-day SMAs, but with the 50-day SMA slightly above the 200-day SMA.
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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
1392.76, high of 4/17/2012
1391.56, low of 3/29/2012
1383.29, low of 4/18/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1380.38, 50-day SMA
1376.55, Fibonacci 100.0% projection 10/11 range
The S&P 500 Composite Potential Support
1357.38, low of 4/11/2012
1340.03, low of 3/6/2012
1337.35, low of 2/10/2012
1300.49, low of 1/30/2012
1277.58, low of 1/13/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1273.26, 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) remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA every day since 6/24/11. Support 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 119.14, 120.91, 121.64, 121.76, 124.02 and 125.03.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA every day since 6/21/11. Support 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance 105.80, 106.49 and 106.66.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below its lows of the previous 4 months on 4/10/12. Although it has stabilized in recent days, JNK/LQD remains below its 50-day SMA and its 200-day SMA.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) appears to have turned corrective, in a minor way, after peaking on 3/19/12. It would not take much price strength to turn TIP/IEF bullish again, however. Systematically, TIP/IEF is neutral at this time: below its 50-day SMA (although just moderately below now), above its 200-day SMA, and the 50-day SMA has been above the 200-day SMA every day since 6/21/11.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) is systematically neutral at this time: below its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA. Support 21.85, 21.74, 21.58, 21.07, and 20.84. Resistance 22.23, 22.47, 22.85, 23.52, 25.84, 27.19, 28.97.
CRB Commodity Price Index fell below its lows of the previous 4 months on 4/23/12. Systematically, CRB remains bearish: below its 50-day SMA, below its 200-day SMA, and with the 50-day SMA below the 200-day SMA every day since 8/18/11.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below the lows of the previous 17 months on 4/18/12, for another a bearish trend confirmation. Systematically, DBA remains bearish, below both its 50-day SMA and 200-day SMAs, and with the 50-day SMA consistently below the 200-day SMA every day since 8/8/11.
Crude Oil, United States Oil ETF (USO) whipsawed back below its 50-day SMA on 4/3/12, turning systematically neutral. USO remains above its 200-day SMA, and the 50-day SMA has remained above the 200-day SMA consistently every day since 1/3/12. Support 38.31, 36.67, 35.73, 34.54, 32.52, 29.10, 26.28, and 22.74. Resistance 39.89, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) broke down below its lows of the previous 12 weeks and fell further below its 50-day and 200-day SMAs on 4/4/12. Systematically, GLD turned bearish on 4/17/12, when its 50-day SMA crossed below its 200-day SMA. Support: 156.58, 156.19, 154.55, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 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) fell below its lows of the previous 3 years on 4/23/12, thereby reconfirming a bearish major trend for the long term. Systematically, GDX/GLD remains bearish: below its 50-day and 200-day SMAs, 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) broke down below its lows of the previous 3 months on 4/23/12, confirming a downtrend for the medium term. Systematically, SLV remains bearish: below its 50-day and 200-day SMAs, and with the 50-day SMA below the 200-day SMA every day since 10/27/11. Support 28.63, 27.83, 25.65, and 24.44. Resistance: 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) broke down below its lows of the previous 3 months on 4/24/12, reconfirming a downtrend for the medium term. SLV/GLD remains below its 50-day SMA, below its 200-day SMA, and the 50-day SMA has remained bearishly below the 200-day SMA every day since 8/30/11.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell further below its lows of the past 3 months on 4/16/12, confirming a downtrend for the medium term. Systematically, however, JJC remains neutral: below its 50-day and 200-day SMAs, and with the 50-day SMA now only moderately above the 200-day SMA. JJC remains far below its 2011 high at 61.69 and has underperformed the stock market since JJC peaked at 51.41 on 2/9/12. 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.
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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
5.96% , HSY , HERSHEY FOODS
8.67% , PH , PARKER HANNIFIN
5.91% , RF , REGIONS FINAN
4.80% , BHI , BAKER HUGHES
5.56% , S , SPRINT NEXTEL
3.81% , MBI , MBIA
1.60% , IXP , Telecommunications Global, IXP
3.63% , T , AT&T Corp., T
0.69% , PUI , Utilities, PUI
0.91% , NYC , LargeCap Blend NYSE Composite iS, NYC
5.97% , KSU , Kansas City Southern, KSU
1.48% , VOX , Telecom Services VIPERs, VOX
4.49% , KBH , KB HOME
1.14% , VFH , Financials VIPERs, VFH
4.62% , PHM , PULTE HOMES
1.70% , EIX , EDISON INTL
0.26% , EPU , Peru MSCI iS, EPU
2.67% , KMB , KIMBERLY CLARK
0.58% , FEU , Value LargeCap Euro STOXX 50 DJ, FEU
1.50% , BIIB , BIOGEN IDEC
1.56% , MMM , 3M
1.68% , EWI , Italy Index, EWI
3.24% , BSX , BOSTON SCIENT
2.41% , VZ , VERIZON COMMS
0.67% , EIS , Israel MSCI iS, EIS
1.59% , IPG , INTERPUBLIC GRP
2.60% , TLAB , TELLABS
0.94% , IYG , Financial Services DJ, IYG
2.15% , CIEN.O , CIENA
0.43% , IWV , LargeCap Blend Russell 3000, IWV
2.42% , BK , BANK OF NEW YORK
1.19% , DUK , DUKE ENERGY
1.87% , NOC , NORTHROP GRUMMAN
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-24.06% , BIG , BIG LOTS
-7.02% , CR , CRANE
-7.40% , WAT , WATERS
-10.55% , RSH , RADIOSHACK
-11.40% , SYMC , SYMANTEC
-4.52% , APD , AIR PRODS & CHEM
-3.56% , A , AGILENT TECH
-6.48% , LXK , LEXMARK INTL STK A
-4.96% , RAI , Reynolds American
-4.33% , COH , COACH
-13.90% , NFLX , Netflix, NFLX
-3.42% , GWW , WW GRAINGER
-3.58% , ZION , ZIONS
-4.45% , AM , AMER GREETINGS STK A
-2.85% , MHP , MCGRAW HILL
-0.80% , ADRU , Europe 100 BLDRS, ADRU
-2.73% , NKE , NIKE STK B
-1.88% , TMO , THERMO ELECTRON
-2.16% , DLTR , Dollar Tree Stores Inc
-3.62% , JNY , JONES APPAREL
-1.45% , PKI , PERKINELMER
-1.32% , CSCO , CISCO SYSTEMS
-2.27% , RL , Polo Ralph Lauren
-3.38% , NIHD , NII Holdings, Inc.
-2.40% , JNS , JANUS CAPITAL
-1.27% , CPWR , COMPUWARE
-2.91% , FDO , FAMILY DLR STRS
-1.79% , IGT , INTL GAME TECH
-2.12% , PSTL , Steel Global PS ETF, PSTL
-2.50% , VRSN , VeriSign Inc
-1.94% , WFM.O , Whole Foods Market Inc
-2.02% , X , US STEEL CORP
-0.26% , MTK , Technology MS sT, MTK
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.86% Spain Index, EWP
1.72% Turkey MSCI iS, TUR
1.72% France Index, EWQ
1.68% Italy Index, EWI
1.63% Realty Cohen & Steers, ICF
1.52% REIT Wilshire, RWR
1.50% REIT VIPERs, VNQ
1.45% Telecom DJ US, IYZ
1.43% Homebuilders SPDR, XHB
1.32% Industrial SPDR, XLI
1.28% Real Estate US DJ, IYR
1.15% EMU Europe Index, EZU
1.14% Microcap Russell, IWC
1.14% Financials VIPERs, VFH
1.13% Financial SPDR, XLF
1.11% Austria Index, EWO
1.06% Financial DJ US, IYF
1.04% Transportation Av DJ, IYT
0.99% Value SmallCap Russell 2000, IWN
0.97% Value EAFE MSCI, EFV
0.94% Financial Services DJ, IYG
0.93% Sweden Index, EWD
0.92% European VIPERs, VGK
0.91% Value SmallCap S&P 600 B, IJS
0.90% Value SmallCap VIPERS, VBR
0.88% Small Cap EAFE MSCI iS, SCZ
0.87% Taiwan Index, EWT
0.87% Dividend High Yield Equity PS, PEY
0.84% Value VIPERs, VTV
0.82% Australia Index, EWA
0.81% Utilities VIPERs, VPU
0.80% EAFE Index, EFA
0.78% Value S&P 500 B, IVE
0.77% Belgium Index, EWK
0.76% SmallCap Russell 2000, IWM
0.75% Value 1000 Russell, IWD
0.74% Pacific ex-Japan, EPP
0.74% Networking, IGN
0.74% Pacific VIPERs, VPL
0.74% Energy SPDR, XLE
0.74% Dividend DJ Select, DVY
0.73% Europe 350 S&P Index, IEV
0.71% Dividend SPDR, SDY
0.70% Energy DJ, IYE
0.69% Utilities SPDR, XLU
0.68% Thailand MSCI iS, THD
0.64% Value MidCap Russell, IWS
0.63% Energy VIPERs, VDE
0.62% Japan Index, EWJ
0.62% Metals & Mining SPDR, XME
0.61% Global ex US ACWI iS, ACWX
0.59% Global 100, IOO
0.59% Energy & Nat Res iS GS, IGE
0.57% SmallCap S&P 600, IJR
0.57% Value MidCap S&P 400 B, IJJ
0.54% DIAMONDS (DJIA), DIA
0.54% Brazil Index, EWZ
0.53% Energy Global, IXC
0.51% China 25 iS, FXI
0.51% Financial Preferred, PGF
0.51% Germany Index, EWG
0.47% United Kingdom Index, EWU
0.47% South Africa Index, EZA
0.45% Netherlands Index, EWN
0.45% Small Cap VIPERs, VB
0.45% Capital Markets KWB ST, KCE
0.44% Growth EAFE MSCI, EFG
0.43% LargeCap Blend S&P 100, OEF
0.43% LargeCap Blend Russell 3000, IWV
0.43% Growth BARRA Small Cap 600, IJT
0.42% South Korea Index, EWY
0.39% Water Resources, PHO
0.39% Singapore Index, EWS
0.39% Growth SmallCap R 2000, IWO
0.38% S&P 500 SPDRs LargeCap Blend, SPY
0.38% LargeCap Blend S&P=Weight R, RSP
0.37% S&P 500 iS LargeCap Blend, IVV
0.37% Oil Fund PowerShares, DBO
0.36% Oil, Crude, U.S. Oil Fund, USO
0.36% Bond Muni ATM-Free S&P iS, MUB
0.35% Health Care SPDR, XLV
0.35% Hong Kong Index, EWH
0.34% LargeCap 1000 R, IWB
0.34% India PS, PIN
0.33% Blend Total Market VIPERs, VTI
0.32% LargeCap VIPERs, VV
0.28% Dividend Appreciation Vipers, VIG
0.26% Dividend International, PID
0.26% Agriculture DB PS, DBA
0.25% Canada Index, EWC
0.25% MidCap S&P 400 SPDRs, MDY
0.24% Bond Ex-US Treas, BWX
0.24% MidCap S&P 400 iS, IJH
0.23% Bond, High-Yield Corporate, HYG
0.22% Emerging Markets, EEM
0.18% Bond, High-Yield Junk, JNK
0.17% Emerging VIPERs, VWO
0.16% Growth SmallCap VIPERs, VBK
0.16% Preferred Stock iS, PFF
0.15% MidCap Russell, IWR
0.14% Gold Shares S.T., GLD
0.14% Growth S&P 500/BARRA, IVW
0.12% Basic Materials DJ US, IYM
0.11% Latin Am 40, ILF
0.11% Bond EmrgMkt JPM iS, EMB
0.10% Value LargeCap Dynamic PS, PWV
0.06% Chile MSCI iS, ECH
0.04% Biotech SPDR, XBI
0.03% Consumer Staples SPDR, XLP
0.03% Bond, TIPS, TIP
0.00% WilderHill Clean Energy PS, PBW
0.00% Switzerland Index, EWL
0.00% Materials SPDR, XLB
0.00% Growth 1000 Russell, IWF
0.00% Commodity Tracking, DBC
0.00% China LargeCap Growth G D H USX PS, PGJ
0.00% Bond Treasury Short-Term iS, SHV
-0.04% Bond, 1-3 Year Treasury, SHY
-0.05% Growth MidCap 400 B, IJK
-0.05% Emerging 50 BLDRS, ADRE
-0.10% Growth VIPERs, VUG
-0.13% Silver Trust iS, SLV
-0.14% Malaysia Index, EWM
-0.14% Bond, Aggregate, AGG
-0.17% Indonesia MV, IDX
-0.18% Bond, Corp, LQD
-0.21% Technology SPDR, XLK
-0.24% Russia MV, RSX
-0.24% Frontier Markets Guggenheim , FRN
-0.26% Bond, 10 Year Treasury, IEF
-0.29% Growth MidCap Russell, IWP
-0.34% Consumer Discretionary SPDR, XLY
-0.38% Mexico Index, EWW
-0.44% Bear, Short S&P 500, SH
-0.49% India Earnings WTree, EPI
-0.54% QQQ Nasdaq 100 Trust, QQQ
-0.63% Info Tech VIPERs, VGT
-0.70% Technology DJ US, IYW
-0.70% Semiconductor SPDR, XSD
-0.70% Bond, 20+ Years Treasury, TLT
-0.74% Semiconductor iS IGW, SOXX
