The S&P 500 Composite Index (SPX: 1,897.45, up 0.04%) absolute price gapped higher on the open, added moderately to opening gains in the first 75 minutes, but surrendered nearly all of the early gain by the close. SPX closed below the open and below the midpoint of the day’s high-low range. The Spinning Top Candlestick suggested an indecisive standoff of bulls versus bears.
NYSE total volume fell 2% to a level 12% below its 200-day SMA. Generally, rising volume confirms the direction (up or down) of a price move, but falling volume may indicate diminishing power behind a price trend, which can suggest a price reversal ahead.
The Number of Daily Net New Highs on the NYSE (New Highs minus New Lows) rose to 347 from 326 the previous trading day. These levels compare to peaks above 800 recorded in 2012 and 2013, when the S&P 500 was lower than it is now. So this indicator still is diverging bearishly relative to last year’s levels.
Momentum oscillators RSI and MACD based on the S&P 500 Index failed to rise to higher highs on 5/13/14 and continue to demonstrate bearish divergence compared to price. Both have remained below their peaks of 2013 consistently on every upside price bounce in 2014. Both fell to their lowest levels in more than 14 months on 2/3/14.
Beyond the noisy day-to-day price action, the outlook for the stock market appears uncertain. Momentum divergences, generally low trading volume on up days, rising trading volume on down days, and excessive bullish sentiment remain challenges to a sustainable upside trend. On the other hand, the bullish case appears to rest primarily on continuation of central banks’ highly-accommodative monetary policies and hopes for faster economic recovery.
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Stock Market Indicators
The Dow Theory reconfirmed a Primary Tide Bull Market on 5/13/14 when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed at new closing price highs. Such a confirmation suggests that significant stock market sectors are in gear and pulling together in the same direction.
NASDAQ 100 ETF/S&P 500 ETF Relative Strength Ratio (QQQ/SPY) fell below its lows of the previous 7 months on 5/7/14, thereby suggesting a significant downtrend. QQQ/SPY crossed below its 50-day SMA on 3/20/14, thereby turning systematically neutral (from bullish). The 50-day SMA is above the 200-day SMA, but the spread is narrowing so rapidly that a bearish crossover appears likely in weeks ahead. Absolute price of QQQ crossed above its 50-day SMA on 5/12/14, thereby turning systematically bullish (from neutral).
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 8 years on 3/13/14, thereby reconfirming its preexisting long-term downtrend. The 50-day SMA remains in weak position below the 200-day SMA. BKF/SPY has underperformed since it peaked on 10/14/2010. Absolute price of BKF has been stuck in a trading range from 32.62 to 39.67 for about a year and has remained systematically neutral most of that time.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below its lows of the previous 8 years on 3/13/14, thereby reconfirming its preexisting long-term downtrend. The 50-day SMA remains in weak position below the 200-day SMA. Long term, EEM/SPY has underperformed since the ratio peaked on 10/14/2010. Absolute price of EEM has been stuck in a trading range from 36.16 to 45.34 for more than 2 years and has remained systematically neutral most of that time.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) has remained systematically bearish or neutral since 12/10/13, when the 50-day SMA crossed below the 200-day SMA. EFA/SPY fell below its lowest levels of the previous 11 years on 3/20/14, thereby reconfirming its preexisting major long-term downtrend.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) turned systematically neutral (from bearish) on 4/3/14 by crossing above its 50-day SMA. The 50-day SMA remains below the 200-day SMA. Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors seek greater potential returns in more volatile, smaller stocks. On the other hand, Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative stability and safety of large size.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below its lowest levels of the previous 11 months on 5/8/14, thereby reconfirming its preexisting major bearish trend. The IWM/SPY 50-day SMA crossed below the 200-day SMA on 4/29/14, thereby turning systematically bearish (from neutral). Absolute price crossed below its 50-day SMA on 4/4/14, thereby turning systematically neutral (from bullish).
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) 50-day SMA crossed below the 200-day SMA on 5/9/14, thereby turning systematically bearish (from neutral). Absolute price rose above its 50-day SMA on 5/12/14, thereby turning systematically bullish (from neutral).
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price rose above its 50-day SMA on 5/12/14, thereby turning systematically neutral (from bearish).UUP has remained systematically bearish most of the time since peaking at 22.98 on 7/9/13. Support 21.07 and 20.84. Resistance 21.96, 22.34, 22.98, 23.14, 23.52, 25.84, 27.19, and 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) absolute price crossed back down below its 50-day SMA on 5/9/14, thereby turning systematically neutral (from bullish).
Crude Oil, United States Oil ETF (USO) absolute price rose above its 50-day SMA on 5/12/14, thereby turning systematically bullish (from neutral). Support 35.96, 35.63, 34.97, 34.00, 32.53, 32.12, 30.79, 29.02, 26.28, and 22.74. Resistance 37.81, 39.54, 39.64, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) absolute price remains systematically neutral. Support: 122.84, 114.46, 113.08, and 102.28. Resistance: 133.69, 137.62, 143.43, 149.44, 153.85, 156.80, 164.40, 166.94, 170.01, 174.07, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) has remained systematically neutral most of the time since GDX absolute price made a low at 20.24 on 12/24/13. Previously, GDX/GLD was systematically bearish most of the time since GDX absolute price peaked at 66.98 on 9/9/11.
Silver, iShares Silver Trust ETF (SLV) price fell to its lowest level in 10 months on 5/1/14. SLV price turned systematically bearish (from neutral) on 3/20/14 when it crossed below its 50-day SMA. Support 18.16, 17.75, 16.73, 14.37, 12.27, 11.64, and 8.45. Resistance: 21.30, 22.23, 23.84, 25.34, 27.14, 27.35, 28.50, 28.61, 29.73, 31.41, 32.72, 33.31, 34.08, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) fell to its lowest level in more than 3 years on 5/1/14, thereby confirming its preexisting major downtrend. SLV/GLD turned systematically bearish (from neutral) on 2/26/14 when it crossed below its 50-day SMA.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) absolute price whipsawed back up above its 50-day SMA on 5/8/14, thereby turning systematically neutral (from bearish). JJC price broke down below the lows of the previous 4 years on 3/19/14, suggesting a major long-term downtrend. “Dr. Copper” is widely accepted as one of the better indicators of investor confidence (or lack thereof) in the global industrial economy.
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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
4.50% , LLL , L-3 COMMS HLDGS
2.73% , CVG , CONVERGYS
3.31% , MCK , MCKESSON CORP
2.19% , SIRI , Sirius Satellite
2.20% , CTB , COOPER TIRE
1.96% , DVN , DEVON ENERGY
1.36% , ECH , Chile MSCI iS, ECH
0.51% , PXE , Energy Exploration & Prod, PXE
3.25% , THC , TENET HEALTHCARE
1.58% , DDS , DILLARD STK A
1.35% , EWJ , Japan Index, EWJ
3.60% , NTAP , NETWK APPLIANCE
1.92% , FCX , FREEPRT MCMORAN STK B
1.23% , USO , Oil, Crude, U.S. Oil Fund, USO
1.99% , DHI , D.R. HORTON, DHI
0.59% , MO , ALTRIA, MO
1.07% , WMB , WILLIAMS
0.99% , ABT , ABBOTT LABS
1.75% , CAH , CARDINAL HEALTH
1.38% , PHM , PULTE HOMES
1.40% , LEN , Lennar Corp. (LEN)
0.13% , IOO , Global 100, IOO
1.69% , EXPD , Expeditors International WA
1.04% , LLY , ELI LILLY
0.53% , VRSN , VeriSign Inc
0.44% , ISIL , INTERSIL CORP
0.41% , FRN , Frontier Markets Guggenheim , FRN
0.81% , URBN , Urban Outfitters Inc.
0.99% , UPS , UNITED PARCEL STK B
1.37% , NCR , NCR
0.33% , ERIC.O , LM Ericsson Telephone Company
0.17% , PGF , Financial Preferred, PGF
0.06% , IYM , Basic Materials DJ US, IYM
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.83% , IGV , Software, IGV
-2.12% , EPU , Peru MSCI iS, EPU
-2.88% , MRVL , MARVELL TECHNOLOGY
-0.59% , PEJ , Leisure & Entertainment, PEJ
-2.78% , WHR , WHIRLPOOL
-2.30% , FAST , Fastenal Company
-2.10% , DLTR , Dollar Tree Stores Inc
-1.38% , RHT , Red Hat Inc.
-1.20% , EWI , Italy Index, EWI
-1.85% , AMAT , APPLIED MATERIAL
-1.05% , ITT , ITT INDS
-0.52% , IJK , Growth MidCap 400 B, IJK
-2.67% , CS , Credit Suisse Group, CS
-1.07% , CMCSA , COMCAST HOLDINGS STK A
-1.15% , EWO , Austria Index, EWO
-2.00% , SCHW.K , CHARLES SCHWAB, SCHW.O
-1.42% , CSCO , CISCO SYSTEMS
-0.28% , EZU , EMU Europe Index, EZU
-0.31% , EWL , Switzerland Index, EWL
-0.76% , BBY , BEST BUY
-1.46% , ADI.O , ANALOG DEVICES
-0.78% , EFX , EQUIFAX
-1.89% , AZO , AUTOZONE
-1.26% , LO , Lorillard, Inc. LO
-0.45% , MMC , MARSH & MCLENNAN
-1.01% , T , AT&T Corp., T
-1.77% , MBI , MBIA
-0.83% , SPG , SIMON PROP GRP
-0.48% , PEY , Dividend High Yield Equity PS, PEY
-1.73% , TXN.O , TEXAS INSTRUMENT
-0.31% , ITW , ILLINOIS TOOL
-0.36% , GCI , GANNETT
-0.76% , EA.O , ELECTRONIC ARTS
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.36% , Chile MSCI iS, ECH
1.35% , Japan Index, EWJ
1.23% , Oil, Crude, U.S. Oil Fund, USO
1.19% , Oil Fund PowerShares, DBO
1.09% , South Korea Index, EWY
0.96% , India PS, PIN
0.96% , Russia MV, RSX
0.93% , India Earnings WTree, EPI
0.89% , Pacific VIPERs, VPL
0.87% , Bond, 20+ Years Treasury, TLT
0.73% , Sweden Index, EWD
0.63% , Mexico Index, EWW
0.49% , South Africa Index, EZA
0.46% , Transportation Av DJ, IYT
0.46% , Commodity Tracking, DBC
0.45% , Energy DJ, IYE
0.43% , Emerging VIPERs, VWO
0.41% , Frontier Markets Guggenheim , FRN
0.39% , Bond, 10 Year Treasury, IEF
0.38% , Emerging Markets MSCI iS, EEM
0.37% , Bond, Long-Term Corp iBoxx iS, LQD
0.37% , Energy SPDR, XLE
0.35% , Energy VIPERs, VDE
0.32% , Energy & Nat Res iS GS, IGE
0.28% , China 25 iS, FXI
0.28% , Agriculture DB PS, DBA
0.26% , Bond, TIPS U.S. Treasury iS, TIP
0.25% , Growth EAFE MSCI, EFG
0.24% , Hong Kong Index, EWH
0.24% , Utilities SPDR, XLU
0.23% , Turkey MSCI iS, TUR
0.20% , Consumer Staples SPDR, XLP
0.19% , Value VIPERs, VTV
0.17% , Global ex U.S. LargeCap Blend, ACWX
0.17% , Industrial SPDR, XLI
0.17% , LargeCap Blend S&P 100, OEF
0.17% , Financial Preferred, PGF
0.17% , Bond, Intermediate US Aggregate iS, AGG
0.16% , Pacific ex-Japan, EPP
0.16% , Bond, High Yield Corp iBoxx iS, HYG
0.15% , Health Care SPDR, XLV
0.15% , DIAMONDS (DJIA), DIA
0.15% , Foreign LargeCap EAFE MSCI iS, EFA
0.14% , LargeCap Blend S&P 500 iS, IVV
0.14% , Global LargeCap Blend MSCI iS, ACWI
0.13% , Global 100, IOO
0.12% , LargeCap Value S&P 500 iS, IVE
0.11% , Utilities VIPERs, VPU
0.11% , Energy Global, IXC
0.10% , Value LargeCap Dynamic PS, PWV
0.09% , S&P 500 SPDRs LargeCap Blend, SPY
0.08% , Materials SPDR, XLB
0.08% , Australia Index, EWA
0.07% , LargeCap Value Russell 1000 iS, IWD
0.07% , LargeCap Growth S&P 500 iS, IVW
0.07% , QQQ Nasdaq 100 Trust, QQQ
0.07% , Canada Index, EWC
0.06% , Basic Materials DJ US, IYM
0.06% , Bond, Muni S&P ATM-Free iS, MUB
0.05% , Technology SPDR, XLK
0.05% , Preferred Stock iS, PFF
0.05% , Bond, High-Yield Junk, JNK
0.04% , Technology DJ US, IYW
0.04% , Bond, 1-3 Year Treasury, SHY
0.04% , Bond, Emerging Mkt JPM iS, EMB
0.03% , LargeCap VIPERs, VV
0.03% , Value EAFE MSCI, EFV
0.03% , Dividend Appreciation Vipers, VIG
0.03% , Latin Am 40, ILF
0.02% , LargeCap Blend Russell 1000 iS, IWB
0.01% , Bond Treasury Short-Term iS, SHV
0.00% , LargeCap Growth Russell 1000 iS, IWF
0.00% , Indonesia MV, IDX
-0.02% , Info Tech VIPERs, VGT
-0.03% , Dividend U.S. DJ iS, DVY
-0.04% , LargeCap Blend S&P=Weight R, RSP
-0.04% , Bear, Short S&P 500, SH
-0.05% , United Kingdom Index, EWU
-0.05% , Dividend International, PID
-0.05% , Silver Trust iS, SLV
-0.05% , Thailand MSCI iS, THD
-0.06% , Blend Total Market VIPERs, VTI
-0.06% , Malaysia Index, EWM
-0.07% , France Index, EWQ
-0.08% , SmallCap Blend EAFE MSCI iS, SCZ
-0.08% , LargeCap Blend Russell 3000 iS, IWV
-0.09% , Financial SPDR, XLF
-0.09% , Germany Index, EWG
-0.10% , Emerging 50 BLDRS, ADRE
-0.12% , Growth VIPERs, VUG
-0.12% , Dividend SPDR, SDY
-0.14% , Taiwan Index, EWT
-0.16% , WilderHill Clean Energy PS, PBW
-0.18% , Growth MidCap Russell, IWP
-0.19% , MidCap Russell, IWR
-0.20% , Bond Ex-US Treas, BWX
-0.20% , Value MidCap Russell, IWS
-0.22% , Europe 350 S&P Index, IEV
-0.23% , European VIPERs, VGK
-0.26% , Financial DJ US, IYF
-0.26% , Dividend ex-U.S. DJ iS, IDV
-0.27% , Gold Shares S.T., GLD
-0.28% , Consumer Discretionary SPDR, XLY
-0.28% , EMU Europe Index, EZU
-0.30% , Networking, IGN
-0.31% , Spain Index, EWP
-0.31% , Switzerland Index, EWL
-0.32% , Brazil Index, EWZ
-0.34% , Financial Services DJ, IYG
-0.34% , MidCap Value S&P 400 iS, IJJ
-0.37% , Singapore Index, EWS
-0.38% , Financials VIPERs, VFH
-0.39% , MidCap Blend S&P 400 iS, IJH
-0.48% , Dividend High Yield Equity PS, PEY
-0.49% , MidCap S&P 400 SPDRs, MDY
-0.52% , MidCap Growth S&P 400 iS, IJK
-0.53% , Value SmallCap VIPERS, VBR
-0.53% , Telecom DJ US, IYZ
-0.54% , Homebuilders SPDR, XHB
-0.58% , Netherlands Index, EWN
-0.59% , Real Estate US DJ iS, IYR
-0.60% , Metals & Mining SPDR, XME
-0.63% , Small Cap VIPERs, VB
-0.64% , REIT VIPERs, VNQ
-0.70% , REIT Wilshire, RWR
-0.71% , Realty Cohen & Steers, ICF
-0.72% , Water Resources, PHO
-0.75% , Capital Markets KWB ST, KCE
-0.79% , Semiconductor iS IGW, SOXX
-0.84% , Growth SmallCap VIPERs, VBK
-0.84% , SmallCap Value Russell 2000 iS, IWN
-0.84% , Belgium Index, EWK
-0.93% , SmallCap Value S&P 600 iS, IJS
-0.96% , Biotech SPDR, XBI
-0.98% , SmallCap Blend Russell 2000 iS, IWM
-1.01% , Semiconductor SPDR, XSD
-1.08% , Microcap Russell, IWC
-1.09% , SmallCap Blend S&P 600 iS, IJR
-1.10% , SmallCap Growth Russell 2000 iS, IWO
-1.15% , Austria Index, EWO
-1.17% , China LargeCap Growth G D H USX PS, PGJ
-1.20% , Italy Index, EWI
-1.24% , SmallCap Growth S&P 600 iS, IJT
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The S&P 500 Composite Potential Resistance
1902.17, high of 5/13/2014
The S&P 500 Composite Potential Support
1867.63, 50-day SMA
1850.61, low of 4/28/2014
1813.55, high of 11/29/2013
1783.79, 200-day SMA
1737.92, low of 2/5/2014
1729.86, high of 9/19/2013
1711.57, high of 10/15/2013
1709.67, high of 8/2/2013
1703.85, high of 9/26/2013
1700.18, high of 8/8/2013
1698.78, high of 7/23/2013
1696.81, high of 8/13/2013
1696.55, high of 10/1/2013
1695.93, low of 10/15/2013
1687.18, high of 5/22/2013
1687.11, low of 9/27/2013
1676.03, low of 7/26/2013
1674.99, low of 9/30/2013
1672.40, high of 9/9/2013
1671.84, low of 7/16/2013
1670.36, low of 10/3/2013
1669.51, high of 8/26/2013
1654.19, high of 6/18/2013
1654.18, high of 7/9/2013
1652.61, low of 8/16/2013
1646.47, low of 10/9/2013
1629.05, low of 8/27/2013
1560.33, low of 6/24/2013
1536.03, low of 4/18/2013
1530.94, high of 2/19/2013
1485.01, low of 2/26/2013
1474.51, high of 9/14/2012
1451.64, low on 1/8/2013
1448.00, high of 12/19/2012
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1438.59, high of 12/12/2012
1434.27, high of 11/2/2012
1432.82, low of 12/20/2012
1430.53, low of 9/26/2012
1426.76, low of 12/12/2012
1425.53, low of 10/12/2012
1423.73, high of 12/3/2012
1422.58, low of 12/21/2012
1422.38, high of 4/2/2012
1422.06, low of 10/22/2012
1421.12, high of 10/25/2012
1420.34, high of 12/7/2012
1419.70, high of 11/29/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
1409.16, high of 11/23/2012
1403.28, low of 10/26/12
1401.58, low of 12/28/12
1398.11, low of 12/31/2012
1397.68, low of 11/26/2012
1396.56, low of 9/4/2012
1391.04, low of 8/6/2012
1388.71, low of 5/3/2012
1385.43, low of 11/28/2012
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1357.38, low of 4/10/2012
1343.35, low of 11/16/2012
1340.03, low of 3/6/2012
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
1325.41, low of 7/12/2012
1306.62, low of 6/12/2012
1291.98, low of 5/18/2012
1266.74, low of 6/4/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1244.80, low of 12/7/2011
1239.73, low of 12/1/2011
1234.81, low of 11/3/2011
1231.04, high of 12/16/2011
1226.64, low of 11/9/2011
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1202.37, low of 12/19/2011
1158.66, low of 11/25/2011
1074.77, low of 10/4/2011
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
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
