U.S. dollar and U.S. Treasury bond prices gained as capital chose safety in a risky world.
Junk bonds and Inflation Protected bonds have been underperforming U.S. Treasury bonds.
Crude Oil, United States Oil ETF (USO) rose 37% from its October low and appears overbought for the short-term.
Gold and Silver both fell below 3-day lows and 4-week uptrend lines on 11/16/11, suggesting downside corrections.
Consumer Discretionary Stock Sector Relative Strength Ratio (XLY/SPY) whipsawed below its 50-day SMA and is now technically neutral again.
Materials Stock Sector Relative Strength Ratio (XLB/SPY) recovered fractionally from 9/30/11 to 10/28/11 but has been drifting lower again recently.
The S&P 500 Composite (SPX: 1,236.91) rose 20.90 points or 1.66% on Wednesday, November 16, 2011. SPX broke down below the lows of the previous 3 trading days and a 6-week trendline.
Confirming the down trend for price, volume on the NYSE rose 14% to its highest level since 11/9/11, which was also a down day for price. The stock market has been falling on heavy volume and rising on light volume in November, which is a bearish indication.
Price momentum oscillators, such as RSI and MACD, are weaker than price, thereby demonstrating bearish divergence.
Over the past 3 weeks, SPX appears to have played with and stalled out near (that is, modestly above and below, not to be interpreted as a precise point) its widely-followed, 200-day Simple Moving Average (SMA), which is now at 1271.52. This appears to be Resistance.
The high price volatility of recent months is typical of bear markets. In contrast, bull markets are much less volatile.
Longer-term indicators still are far from confirming any change in the Bearish Primary Tide Trend. For example, 50-day SMAs are well below 200-day SMAs for most stocks and indexes.
Ripples and Secondary Reactions opposite to the Dow Theory Primary Tide Trend lure short-term traders into trying to trade a bounce. Price corrections against the larger trends are normal and expected, of course, but playing counter-trend bounces is risky. The mood can switch from “risk on” to “risk off” overnight, leaving the too-clever trader suddenly holding the bag.
The Dow Theory signaled a Primary Tide Bear Market on 8/2/11, when both Dow-Jones Averages, Industrial and Transportation, closed below their closing price lows of the previous 11 months. This Bear Market was confirmed on 10/3/11 by lower closing price lows for both Averages. Both Averages would have to close above their closing price highs for the year to indicate a “Turn in the Tide”.
A Dow Theory Primary Tide Bear Market is a powerful beast that must not be underestimated. The median Dow Theory Primary Tide Bear Market in history lasts 16 months and takes stock prices down 34%. In a Dow Theory Primary Tide Bear Market, the big surprises usually come to the downside. Typically, there is no safe place to hide in a Dow Theory Primary Tide Bear Market. Even those stocks that have held up relatively well through most of the Bear Market eventually succumb to the relentless tide of selling.
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Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) rose to its highest closing price since 11/1/11. TLT crossed above its 50-day SMA on 11/14/11, turning technically bullish. Support 115.21, 109.82, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 119.49 and 125.03.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) rose to its highest closing price since 11/9/11. IEF crossed above its 50-day SMA again on 11/14/11, turning technically bullish. Support 103.57, 101.36, 101.11, 99.79, and 97.66. Resistance 104.90 and 106.66.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) has been falling again since 10/27/11 and fell below all lows since 10/20/11. Longer term, JNK/LQD broke down below the lows of the previous 29-months on 10/3/11, which reconfirmed a bearish major trend.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below the lows of the previous 2 weeks on 11/16/11. Since making a high on 10/27/11, TIP/IEF appears to be rolling over, probably resuming its previous downtrend.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) rose above the highs of the previous 5 weeks on 11/16/11. UUP rose above its 50-day SMA on 11/14/11, turning technically bullish. Support 21.58, 21.07, and 20.84. Resistance 22.32 and 22.63.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below the lows of the previous 5 weeks on 11/14/11–this following a break below the lows of the previous 10 months on 10/3/11. DBA remains below 20-day, 50-day, and 200-day SMAs. DBA remains bearish in all time frames.
Crude Oil, United States Oil ETF (USO) rose 37% from its October low and appears overbought for the short-term. Moreover, the 50-day SMA remains far below the 200-day SMA, implying a neutral medium-term trend. Longer term, USO broke down below 2-year lows on 10/4/11 to confirm a major bear market. Support 37.57, 36.49, 34.54, 32.52, 29.10, 26.28, and 22.74. Resistance 39.74, 40.74, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) fell below 3-day lows and a 4 week uptrend line on 11/16/11, suggesting a downside correction. Price is still above its 50- and 200-day SMAs. Support: 168.83, 163.61, 154.19, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/ Gold Shares ETF Relative Strength Ratio (GDX/GLD) has been consolidating major losses in a neutral trading range since making a low on 8/8/11. Longer term, GDX/GLD fell below 29-month lows on 8/8/11, reconfirming a bearish major trend for the long term.
Silver, iShares Silver Trust ETF (SLV) fell below 3-day lows, a 4-week uptrend line, and the 50-day SMA on 11/16/11, confirming a downside correction. Longer term, SLV price broke down below the lows of the previous 7 months on 9/26/11, which confirmed a bearish major trend for the long term. Support 32.23, 31.50, 27.41, 26.03, and 24.44. Resistance: 34.44, 34.51, 40.23, 41.49, 42.30, 42.78, 44.71 and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) fell below the lows of the previous 3 weeks on 11/16/11, confirming a bearish trend for the short term. Medium term, SLV/GLD has stayed in bearish position, below falling 50-day and 200-day SMAs, every day since 8/4/11. Longer term, the SLV/GLD Ratio broke down below the lows of the previous 11 months on 9/30/11, reconfirming a bearish major trend. SLV/GLD has been mostly weak since peaking on 4/28/11. This means investors prefer Gold over Silver.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price fell below the lows of the previous 2 trading days on 11/16/11 and remains bearishly below falling 50-day and 200-day SMAs. Major trend weakness in Copper suggests serious concerns about the economic outlook.
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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
23.44% , MU.O , MICRON TECH
9.48% , EK , EASTMAN KODAK
4.52% , ADSK , AUTODESK
2.62% , TYC , TYCO INTL
2.41% , PTEN , Patterson-UTI Energy Inc
0.28% , PXJ , Oil & Gas, PXJ
1.99% , SNV , SYNOVUS
1.83% , LEN , Lennar Corp. (LEN)
2.37% , USO , Oil, Crude, U.S. Oil Fund, USO
1.00% , TXN , TEXAS INSTRUMENT
2.70% , WPO , Washington Post
0.01% , RFV , Value MidCap S&P 400, RFV
1.36% , MYY , Short 100% MidCap 400, MYY
0.86% , A , AGILENT TECH
0.92% , LO , Lorillard, Inc. LO
1.25% , LOW , LOWES
2.87% , DXD , Short 200% Dow 30 PS, DXD
1.42% , LPX , LOUISIANA PAC
1.94% , DHI , D.R. HORTON, DHI
3.03% , SDS , Short 200% S&P 500 PS, SDS
0.60% , LNC , LINCOLN NATL
3.40% , QID , Short 200% QQQ PS, QID
2.08% , BHI , BAKER HUGHES
0.36% , HP , Helmerich & Payne HP
1.08% , DV , DeVry, Inc.
0.72% , RFMD , RF Micro Devices Inc
0.21% , CTAS , CINTAS
0.91% , PEP , PEPSICO
1.06% , ASH , ASHLAND
0.14% , PM , Philip Morris, PM
0.18% , NOV , NATIONAL OILWELL VARC0
1.09% , PHM , PULTE HOMES
0.09% , OIH , Oil Services H, OIH
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.40% , ADRA , Asia 50 BLDRS, ADRA
-2.70% , XSD , Semiconductor SPDR, XSD
-1.39% , JKL , Value SmallCap iS M, JKL
-2.77% , KCE , Capital Markets KWB ST, KCE
-9.32% , VLO , VALERO ENERGY
-7.97% , MS , MORGAN STANLEY
-2.10% , PWV , Value LargeCap Dynamic PS, PWV
-2.03% , JKK , Growth SmallCap iS M, JKK
-4.23% , FXI , China 25 iS, FXI
-1.84% , IYZ , Telecom DJ US, IYZ
-1.62% , IJR , SmallCap S&P 600, IJR
-2.76% , TAP , ADOLPH COORS STK B, TAP
-3.72% , FLEX , Flextronics International Ltd
-2.42% , RPV , Value S&P 500, RPV
-3.66% , CCL , CARNIVAL STK A
-2.84% , IYG , Financial Services DJ, IYG
-1.60% , IJS , Value SmallCap S&P 600 B, IJS
-1.62% , IWV , LargeCap Blend Russell 3000, IWV
-1.51% , IGM , Technology GS, IGM
-2.08% , TUR , Turkey MSCI iS, TUR
-3.37% , CI , CIGNA
-5.91% , NFLX , Netflix, NFLX
-0.44% , FDV , Value 40 Large Low P/E FT DB, FDV
-2.06% , EWK , Belgium Index, EWK
-0.87% , JKG , MidCap Blend Core iS M, JKG
-1.50% , PIV , Value Line Timeliness MidCap Gr, PIV
-2.74% , IGT , INTL GAME TECH
-1.57% , IDX , Indonesia MV, IDX
-2.70% , EWO , Austria Index, EWO
-2.35% , VWO , Emerging VIPERs, VWO
-2.53% , PCG , PG&E
-2.35% , EWS , Singapore Index, EWS
-2.36% , SIL , Silver Miners Global X, SIL
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.51% Oil Fund PowerShares, DBO
2.37% Oil, Crude, U.S. Oil Fund, USO
0.91% Bond, 20+ Years Treasury, TLT
0.36% Bond, 10 Year Treasury, IEF
0.06% Bond Muni ATM-Free S&P iS, MUB
0.03% Bond Treasury Short-Term iS, SHV
-0.02% Bond, 1-3 Year Treasury, SHY
-0.04% Bond, Aggregate, AGG
-0.11% Bond EmrgMkt JPM iS, EMB
-0.25% Commodity Tracking, DBC
-0.28% Bond, TIPS, TIP
-0.32% Bond, Corp, LQD
-0.34% Semiconductor iS IGW, SOXX
-0.51% Canada Index, EWC
-0.53% Thailand MSCI iS, THD
-0.60% Financial Preferred, PGF
-0.73% Preferred Stock iS, PFF
-0.76% Bond, High-Yield Junk, JNK
-0.79% Homebuilders SPDR, XHB
-0.80% Agriculture DB PS, DBA
-0.82% Water Resources, PHO
-0.85% South Africa Index, EZA
-0.88% WilderHill Clean Energy PS, PBW
-0.89% Malaysia Index, EWM
-0.89% Consumer Staples SPDR, XLP
-0.91% Chile MSCI iS, ECH
-0.95% Real Estate US DJ, IYR
-0.95% REIT VIPERs, VNQ
-0.97% Bond, High-Yield Corporate, HYG
-1.00% Bond Ex-US Treas, BWX
-1.01% Networking, IGN
-1.05% REIT Wilshire, RWR
-1.07% Gold Shares S.T., GLD
-1.08% Frontier Markets Guggenheim , FRN
-1.08% Utilities VIPERs, VPU
-1.16% Dividend DJ Select, DVY
-1.17% Dividend SPDR, SDY
-1.18% Energy DJ, IYE
-1.20% Utilities SPDR, XLU
-1.23% Dividend High Yield Equity PS, PEY
-1.25% Switzerland Index, EWL
-1.27% MidCap S&P 400 iS, IJH
-1.27% Spain Index, EWP
-1.29% Biotech SPDR, XBI
-1.30% Microcap Russell, IWC
-1.32% Energy & Nat Res iS GS, IGE
-1.32% Energy VIPERs, VDE
-1.34% Dividend International, PID
-1.35% Value SmallCap Russell 2000, IWN
-1.35% MidCap S&P 400 SPDRs, MDY
-1.35% Energy Global, IXC
-1.36% Growth MidCap 400 B, IJK
-1.37% Realty Cohen & Steers, ICF
-1.38% Dividend Appreciation Vipers, VIG
-1.42% Value MidCap S&P 400 B, IJJ
-1.42% MidCap Russell, IWR
-1.45% Value MidCap Russell, IWS
-1.45% Netherlands Index, EWN
-1.46% Growth S&P 500/BARRA, IVW
-1.46% DIAMONDS (DJIA), DIA
-1.47% Industrial SPDR, XLI
-1.47% Growth VIPERs, VUG
-1.48% Technology SPDR, XLK
-1.49% Technology DJ US, IYW
-1.49% Value SmallCap VIPERS, VBR
-1.49% Growth 1000 Russell, IWF
-1.50% Brazil Index, EWZ
-1.50% Growth MidCap Russell, IWP
-1.50% Energy SPDR, XLE
-1.51% Global 100, IOO
-1.53% LargeCap Blend S&P 100, OEF
-1.55% Info Tech VIPERs, VGT
-1.56% LargeCap VIPERs, VV
-1.57% Indonesia MV, IDX
-1.59% S&P 500 SPDRs LargeCap Blend, SPY
-1.60% Value SmallCap S&P 600 B, IJS
-1.60% LargeCap 1000 R, IWB
-1.62% SmallCap Russell 2000, IWM
-1.62% LargeCap Blend Russell 3000, IWV
-1.62% SmallCap S&P 600, IJR
-1.65% QQQ Nasdaq 100 Trust, QQQ
-1.66% S&P 500 iS LargeCap Blend, IVV
-1.66% Latin Am 40, ILF
-1.67% Blend Total Market VIPERs, VTI
-1.68% Value VIPERs, VTV
-1.68% Small Cap VIPERs, VB
-1.70% Value 1000 Russell, IWD
-1.72% Italy Index, EWI
-1.73% LargeCap Blend S&P=Weight R, RSP
-1.73% Emerging 50 BLDRS, ADRE
-1.75% France Index, EWQ
-1.76% Value S&P 500 B, IVE
-1.77% Growth BARRA Small Cap 600, IJT
-1.77% Mexico Index, EWW
-1.79% Pacific VIPERs, VPL
-1.80% Growth SmallCap R 2000, IWO
-1.80% Europe 350 S&P Index, IEV
-1.80% Growth SmallCap VIPERs, VBK
-1.82% Global ex US ACWI iS, ACWX
-1.83% Value EAFE MSCI, EFV
-1.83% Japan Index, EWJ
-1.84% Telecom DJ US, IYZ
-1.88% Consumer Discretionary SPDR, XLY
-1.91% EAFE Index, EFA
-1.92% Health Care SPDR, XLV
-1.93% United Kingdom Index, EWU
-1.97% EMU Europe Index, EZU
-2.00% Growth EAFE MSCI, EFG
-2.06% Belgium Index, EWK
-2.08% Turkey MSCI iS, TUR
-2.09% China LargeCap Growth G D H USX PS, PGJ
-2.10% Value LargeCap Dynamic PS, PWV
-2.10% European VIPERs, VGK
-2.12% Sweden Index, EWD
-2.13% Russia MV, RSX
-2.18% Financials VIPERs, VFH
-2.19% Transportation Av DJ, IYT
-2.19% Australia Index, EWA
-2.27% Financial DJ US, IYF
-2.30% Basic Materials DJ US, IYM
-2.31% India PS, PIN
-2.32% Germany Index, EWG
-2.35% Emerging VIPERs, VWO
-2.35% Materials SPDR, XLB
-2.35% Singapore Index, EWS
-2.36% Silver Miners Global X, SIL
-2.39% India Earnings WTree, EPI
-2.41% Taiwan Index, EWT
-2.46% Financial SPDR, XLF
-2.49% South Korea Index, EWY
-2.50% Silver Trust iS, SLV
-2.53% Small Cap EAFE MSCI iS, SCZ
-2.59% Pacific ex-Japan, EPP
-2.69% Emerging Markets, EEM
-2.70% Semiconductor SPDR, XSD
-2.70% Austria Index, EWO
-2.77% Capital Markets KWB ST, KCE
-2.84% Financial Services DJ, IYG
-2.92% Hong Kong Index, EWH
-3.25% Metals & Mining SPDR, XME
-4.23% China 25 iS, FXI
