Agriculture, PowerShares DB Agriculture Fund ETF (DBA) broke out to the upside of a triangle consolidation pattern. DBA remains systematically bullish.
Crude Oil, United States Oil ETF (USO) rose above its highs of the previous 3 months.
High and rising prices of necessities could bring trouble for the general economy because more consumer spending for food and fuel means less consumer spending available for other goods and services.
The S&P 500 (SPX: 1,413.17) fell 4.96 points or 0.35% on Tuesday.
Stocks opened higher and added to gains during the first 70 minutes. That morning extreme was the highest intraday high since 5/19/2008.
The market declined for months after that 2008 peak more than 4 years ago. Again, the market rejected that same high price. Selling pressure suddenly appeared after 10:40 a.m. ET, for no obvious external reason.
The daily high-low range was significantly larger than the ranges of the previous 2 trading days, with a high open and a low close, creating a Bearish Engulfing Candlestick.
From 6/4/12 to 8/21/12, intraday, SPX recovered slightly more than 100% of its April-June drop.
Stock price indexes recently were “overbought” or “extended” at 2% to 3% above 20-day EMAs.
Momentum oscillators turned downward, and many of them demonstrate bearish divergences.
The number of stocks making new highs is a fraction of July’s peak numbers.
NYSE volume rose 18% to confirm greater selling pressure. Still, volume was 16% below its 200-day SMA. Volume has been running near the lowest levels of the year since 8/8/12, possibly reflecting diminishing enthusiasm for stocks, as well as summer vacations. On-Balance Volume for the SPX remains in a downtrend with bearish divergence. NYSE Cumulative Volume of Advancing Stocks minus Volume of Declining Stocks remains weak relative to price. Volume has not been confirming the price up move.
It takes volume to push prices up. After the shorts have been forced to cover and the longs have had their fill of buying, in the absence of a fresh source of demand, stocks fall of their own weight.
With the stock price indexes far above their 4-year lows and still very close to the top end of their 4-year price range, downside risk may exceed upside potential for the stock market. Choosing safety over risk appears to be the most reasonable approach for conservative traders and investors.
For extensive coverage of major global markets with illustrative charts, take a free trial for my weekly report —
click here.
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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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Stock Market Indicators
The Dow Theory signaled a Primary Tide Bear Market on 5/17/12 when both Industrials and Transports closed below their closing price lows of the previous 4 months, including the critical lows of March and April, 2012. 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. Again on 5/1/12, the Industrials rose to a higher closing price high while the Transports failed to rise to a higher closing price high, thereby indicating a non-confirmation and bearish divergence. Currently, the Industrials are very close to their highs of the year, but the Transports continue to lag well below their highs, thereby demonstrating a bearish divergence.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) rose above its 50-day SMA on 8/6/12, thereby turning systematically bullish again. QQQ/SPY remains above its 200-day SMA, and its 50-day SMA has been above its 200-day SMA since 8/5/11.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 3 years on 7/23/12, reconfirming its bearish trend. Short term, BKF/SPY turned systematically bearish again on 8/14/12, when it fell below its 50-day SMA. BKF/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 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 years on 7/23/12, reconfirming its bearish trend. EEM/SPY turned systematically bearish again on 8/17/12, when it fell below its 50-day SMA. EEM/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 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 9 years on 7/24/12. EFA/SPY turned systematically neutral 8/3/12 when it rose above its 50-day SMA. EFA/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/14/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) rose above its highs of the previous 2 years on 7/31/12, thereby reconfirming its preexisting major bullish trend. OEF/SPY remains systematically bullish above its 50-day SMA, above its 200-day SMA, and the 50-day SMA has been above the 200-day SMA consistently every day since 8/24/11. 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) fell below its lows of the previous 10 months on 8/1/12, thereby confirming its major downtrend. Systematically, the IWM/SPY ratio remains bearish: below its 50-day SMA, below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA consistently every day since 4/20/12.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) MDY/SPY rose above its 50-day SMA on 8/21/12, thereby turning systematically neutral again. MDY/SPY remains below its 200-day SMA, and its 50-day SMA has been below its 200-day SMA since 6/6/12.
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VIX Fear Index fell to 13.30 intraday on 8/17/12, its lowest level in more than 5 years, since 6/20/07. VIX fell from an intraday peak of 27.73 on 6/4/12. This large drop suggests a shift from worried concern to bullish complacency. 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 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
1426.68, high of 8/21/2012
1422.38, high of 4/2/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
The S&P 500 Composite Potential Support
1391.04, low of 8/6/2012
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
1365.16, 50-day SMA
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
1335.52, high of 6/11/2012
1334.93, high of 5/31/2012
1331.86, 200-day SMA
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
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) fell below its 50-day SMA on 8/3/12, turning systematically neutral. 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, above 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) broke out to the upside of a triangle consolidation pattern on 8/21/12. DBA remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and its 50-day SMA rose above its 200-day SMA on 8/13/12. High 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) rose above its highs of the previous 3 months on 8/21/12. USO turned systematically neutral on 7/16/12, when price rose above its 50-day SMA. USO remains below its 200-day SMA, and its 50-day remains far below its 200-day SMA. Support 34.34, 32.45, 31.40, 29.02, 26.28, and 22.74. Resistance 36.97, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) rose above its 50-day SMA on 8/3/12, thereby turning systematically neutral. GLD remains below its 200-day SMA, and its 50-day SMA has stayed below its 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) rose above its 50-day SMA on 8/16/12, thereby turning systematically neutral again. GDX/GLD remains below its 200-day SMA, and its 50-day SMA has remained bearishly below its 200-day SMA every day since 2/22/11.
Silver, iShares Silver Trust ETF (SLV) price whipsawed back above its 50-day SMA on 8/3/12, thereby turning systematically neutral again for the short term. 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 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 27.48, 27.60, 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. Short term, SLV/GLD turned systematically neutral again when it rose above its 50-day SMA on 8/17/12. SLV/GLD remains 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 whipsawed back above its 50-day SMA on 8/21/12, thereby turning systematically neutral again for the short term. Longer term, JJC fell to its lowest level in 8 months on 8/2/12, thereby confirming its major bearish trend. JJC price 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
18.22% , URBN , Urban Outfitters Inc.
1.35% , EWQ , France Index, EWQ
5.11% , CHD , Church & Dwight
1.38% , EZU , EMU Europe Index, EZU
0.88% , EWA , Australia Index, EWA
3.20% , FCX , FREEPRT MCMORAN STK B
1.85% , JNS , JANUS CAPITAL
1.13% , EWG , Germany Index, EWG
2.76% , KWT , Solar Energy MV, KWT
0.55% , DOG , Short 100% Dow 30, DOG
4.76% , CECO , CAREER EDUCATION CORP
0.55% , EWL , Switzerland Index, EWL
2.50% , C , CITIGROUP
2.06% , GNW , GENWORTH FINANCIAL
1.79% , JPM , J P MORGAN CHASE
0.90% , ININ , Interactive Intelligence ININ
0.36% , PSQ , Short 100% QQQ, PSQ
1.74% , DLX , DELUXE
2.75% , SIL , Silver Miners Global X, SIL
1.52% , DVN , DEVON ENERGY
2.37% , HIG , HARTFORD FINL
0.66% , EWK , Belgium Index, EWK
0.82% , EIS , Israel MSCI iS, EIS
0.75% , VGK , European VIPERs, VGK
1.68% , SNDK , SanDisk Corporation
1.20% , XME , Metals & Mining SPDR, XME
2.17% , EWI , Italy Index, EWI
1.29% , PKI , PERKINELMER
2.12% , FII , FED INVESTORS STK B
1.40% , PFG , PRINCIPAL FINL
0.95% , IAU , Gold COMEX iS, IAU
0.78% , QID , Short 200% QQQ PS, QID
2.33% , ATI , ALLEGHENY TECH
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.30% , KLD , LargeCap Blend Socially Responsible iS, KLD
-5.74% , BIDU , Baidu, Inc., BIDU
-2.28% , RFMD , RF Micro Devices Inc
-0.61% , IYZ , Telecom DJ US, IYZ
-7.96% , RSH , RADIOSHACK
-5.61% , WOR , WORTHINGTON INDS
-2.07% , XRAY , DENTSPLY International Inc
-1.62% , PXN , Nanotech Lux, PXN
-1.85% , VZ , VERIZON COMMS
-0.80% , ADRE , Emerging 50 BLDRS, ADRE
-0.42% , MTK , Technology MS sT, MTK
-1.48% , SHW , SHERWIN WILLIAMS
-1.38% , BBY , BEST BUY
-1.46% , AM , AMER GREETINGS STK A
-2.28% , COH , COACH
-0.23% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
-0.16% , PXE , Energy Exploration & Prod, PXE
-2.20% , LEN , Lennar Corp. (LEN)
-0.93% , DDM , Ultra Dow30 Double, DDM
-2.59% , RIMM , RESEARCH IN MOTION LTD
-0.62% , NE , NOBLE
-1.96% , MJN , Mead Johnson Nutrition
-1.25% , PCG , PG&E
-0.31% , PFM , Dividend Achievers PS, PFM
-1.49% , ISIL , INTERSIL CORP
-0.26% , JKG , MidCap Blend Core iS M, JKG
-0.91% , EWW , Mexico Index, EWW
-0.76% , QLD , Ultra QQQ Double, QLD
-0.09% , PSI , Semiconductors, PSI
-1.69% , SLM.O , SLM CORP
-1.06% , GWW , WW GRAINGER
-1.15% , QCOM , QUALCOMM
-1.57% , SRE , SEMPRA ENERGY
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.17% Italy Index, EWI
1.69% India PS, PIN
1.50% Silver Trust iS, SLV
1.40% India Earnings WTree, EPI
1.38% EMU Europe Index, EZU
1.35% France Index, EWQ
1.20% Metals & Mining SPDR, XME
1.20% South Africa Index, EZA
1.13% Germany Index, EWG
1.11% Netherlands Index, EWN
1.00% Gold Shares S.T., GLD
0.92% Commodity Tracking, DBC
0.88% Australia Index, EWA
0.84% Europe 350 S&P Index, IEV
0.75% European VIPERs, VGK
0.66% Belgium Index, EWK
0.66% Spain Index, EWP
0.64% SmallCap Blend EAFE MSCI iS, SCZ
0.62% Bond Ex-US Treas, BWX
0.60% Agriculture DB PS, DBA
0.58% Turkey MSCI iS, TUR
0.57% Foreign LargeCap EAFE MSCI iS, EFA
0.55% Taiwan Index, EWT
0.55% Switzerland Index, EWL
0.51% Thailand MSCI iS, THD
0.49% Value EAFE MSCI, EFV
0.46% WilderHill Clean Energy PS, PBW
0.45% Financial Services DJ, IYG
0.44% Bond, 20+ Years Treasury, TLT
0.44% Global ex U.S. LargeCap Blend, ACWX
0.43% Pacific ex-Japan, EPP
0.42% Oil, Crude, U.S. Oil Fund, USO
0.41% Austria Index, EWO
0.41% Oil Fund PowerShares, DBO
0.40% Russia MV, RSX
0.37% Networking, IGN
0.35% Capital Markets KWB ST, KCE
0.33% MidCap Growth S&P 400 iS, IJK
0.33% Financial SPDR, XLF
0.32% Bear, Short S&P 500, SH
0.31% Chile MSCI iS, ECH
0.30% Dividend ex-U.S. DJ iS, IDV
0.28% Bond, High-Yield Junk, JNK
0.25% Pacific VIPERs, VPL
0.25% Growth EAFE MSCI, EFG
0.24% Semiconductor SPDR, XSD
0.23% United Kingdom Index, EWU
0.23% MidCap Blend S&P 400 iS, IJH
0.22% Financials VIPERs, VFH
0.22% Bond, High Yield Corp iBoxx iS, HYG
0.21% Bond, Emerg Mkt JPM iS, EMB
0.21% REIT VIPERs, VNQ
0.21% Financial DJ US, IYF
0.17% Bond, Long-Term Corp iBoxx iS, LQD
0.16% Realty Cohen & Steers, ICF
0.14% Canada Index, EWC
0.14% Small Cap VIPERs, VB
0.14% Materials SPDR, XLB
0.14% REIT Wilshire, RWR
0.13% Bond, Intermediate US Aggregate iS, AGG
0.13% Global 100, IOO
0.12% MidCap Value S&P 400 iS, IJJ
0.12% MidCap S&P 400 SPDRs, MDY
0.11% Financial Preferred, PGF
0.10% Transportation Av DJ, IYT
0.09% Value SmallCap VIPERS, VBR
0.08% Bond, 10 Year Treasury, IEF
0.08% Bond, Muni S&P ATM-Free iS, MUB
0.07% Basic Materials DJ US, IYM
0.07% Bond, TIPS U.S. Treasury iS, TIP
0.07% Global LargeCap Blend MSCI iS, ACWI
0.06% SmallCap Value S&P 600 iS, IJS
0.06% Biotech SPDR, XBI
0.05% Semiconductor iS IGW, SOXX
0.04% SmallCap Value Russell 2000 iS, IWN
0.03% Growth MidCap Russell, IWP
0.03% Preferred Stock iS, PFF
0.00% Real Estate US DJ iS, IYR
0.00% Malaysia Index, EWM
0.00% Japan Index, EWJ
0.00% Frontier Markets Guggenheim , FRN
0.00% Energy & Nat Res iS GS, IGE
0.00% Bond, 1-3 Year Treasury, SHY
0.00% Bond Treasury Short-Term iS, SHV
-0.01% Growth SmallCap VIPERs, VBK
-0.04% MidCap Russell, IWR
-0.04% SmallCap Blend S&P 600 iS, IJR
-0.04% Value MidCap Russell, IWS
-0.06% SmallCap Growth S&P 600 iS, IJT
-0.06% SmallCap Blend Russell 2000 iS, IWM
-0.07% Indonesia MV, IDX
-0.10% LargeCap Blend S&P=Weight R, RSP
-0.10% LargeCap Value Russell 1000 iS, IWD
-0.12% Dividend SPDR, SDY
-0.13% Consumer Discretionary SPDR, XLY
-0.14% LargeCap Value S&P 500 iS, IVE
-0.15% Emerging Markets MSCI iS, EEM
-0.16% SmallCap Growth Russell 2000 iS, IWO
-0.18% Sweden Index, EWD
-0.20% Dividend International, PID
-0.20% Microcap Russell, IWC
-0.20% LargeCap Blend Russell 3000 iS, IWV
-0.21% Blend Total Market VIPERs, VTI
-0.21% Value VIPERs, VTV
-0.22% Industrial SPDR, XLI
-0.22% Emerging VIPERs, VWO
-0.22% China LargeCap Growth G D H USX PS, PGJ
-0.23% Hong Kong Index, EWH
-0.26% Energy Global, IXC
-0.26% Water Resources, PHO
-0.27% LargeCap Blend Russell 1000 iS, IWB
-0.30% Singapore Index, EWS
-0.30% S&P 500 SPDRs LargeCap Blend, SPY
-0.30% Dividend Appreciation Vipers, VIG
-0.31% Energy VIPERs, VDE
-0.31% Dividend High Yield Equity PS, PEY
-0.32% Energy SPDR, XLE
-0.32% LargeCap Blend S&P 500 iS, IVV
-0.34% Growth VIPERs, VUG
-0.34% Health Care SPDR, XLV
-0.34% Energy DJ, IYE
-0.37% LargeCap VIPERs, VV
-0.38% LargeCap Growth Russell 1000 iS, IWF
-0.39% Homebuilders SPDR, XHB
-0.39% QQQ Nasdaq 100 Trust, QQQ
-0.40% LargeCap Growth S&P 500 iS, IVW
-0.44% LargeCap Blend S&P 100, OEF
-0.46% DIAMONDS (DJIA), DIA
-0.48% Info Tech VIPERs, VGT
-0.49% China 25 iS, FXI
-0.50% Dividend U.S. DJ iS, DVY
-0.55% Technology DJ US, IYW
-0.61% Consumer Staples SPDR, XLP
-0.61% Telecom DJ US, IYZ
-0.64% Utilities VIPERs, VPU
-0.65% Technology SPDR, XLK
-0.69% South Korea Index, EWY
-0.70% Value LargeCap Dynamic PS, PWV
-0.73% Utilities SPDR, XLU
-0.80% Emerging 50 BLDRS, ADRE
-0.88% Latin Am 40, ILF
