Highlights based on trading on Tuesday, May 15, 2012:
Both stocks and commodities are demonstrating trend weakness, while U.S. Treasury Notes and Bonds demonstrate trend strength. Investors are choosing safety over risk.
The S&P 500 (SPX: 1,330.66) fell 7.69 points or 0.57% on Tuesday to its lowest closing price in 14 weeks, since 2/3/12. SPX has now lost 6.23% from its high of 1,419.04 on 4/2/12, based on closing prices.
NYSE trading volume rose 12%. Volume has been increasing when stock prices decline and decreasing when stock prices advance, suggesting that selling pressure is greater than buying pressure.
SPX fell further below its 50-day SMA. SPX first fell below its 50-day SMA on Friday, 5/4/12, and has remained below it every day since.
Popular momentum indicators based on the SPX daily close price have been relatively weak and are still falling to lower lows. RSI(14), now at 31.23, has been relatively bearish since it closed at 75.38 on 2/9/12. Stochastic(14,3,3) fell to 5.99, down from 90.04 on 4/30/12. MACD(12,26,9) fell to -10.54, is below its Signal Line, and is down from 19.08 on 2/9/12.
Probabilities appear to favor further downside risk for the stock market.
The following ETFs, ranked by Relative Strength, with the weakest at the bottom of the list, closed below their closing price lows of the previous 13 weeks:
Technology DJ US, IYW
Info Tech VIPERs, VGT
Growth VIPERs, VUG
LargeCap Growth Russell 1000 iS, IWF
LargeCap Blend S&P 100, OEF
DIAMONDS (DJIA), DIA
LargeCap Blend Russell 1000 iS, IWB
S&P 500 SPDRs LargeCap Blend, SPY
LargeCap Blend S&P 500 iS, IVV
LargeCap VIPERs, VV
Blend Total Market VIPERs, VTI
LargeCap Blend Russell 3000 iS, IWV
Dividend Appreciation Vipers, VIG
Growth MidCap Russell, IWP
MidCap Russell, IWR
Growth SmallCap VIPERs, VBK
Value MidCap Russell, IWS
Small Cap VIPERs, VB
Value VIPERs, VTV
LargeCap Blend S&P=Weight R, RSP
LargeCap Value Russell 1000 iS, IWD
Value SmallCap VIPERS, VBR
Dividend High Yield Equity PS, PEY
LargeCap Value S&P 500 iS, IVE
SmallCap Growth Russell 2000 iS, IWO
SmallCap Blend Russell 2000 iS, IWM
SmallCap Value Russell 2000 iS, IWN
Preferred Stock iS, PFF
Industrial SPDR, XLI
Water Resources, PHO
Financial SPDR, XLF
Malaysia Index, EWM
Financial Services DJ, IYG
Bond Ex-US Treas, BWX
Singapore Index, EWS
Mexico Index, EWW
Semiconductor iS IGW, SOXX
Global LargeCap Blend MSCI iS, ACWI
Telecom DJ US, IYZ
United Kingdom Index, EWU
Global 100, IOO
Frontier Markets Guggenheim , FRN
South Korea Index, EWY
Hong Kong Index, EWH
Dividend International, PID
Switzerland Index, EWL
Pacific ex-Japan, EPP
Materials SPDR, XLB
Chile MSCI iS, ECH
Indonesia MV, IDX
Gold Shares S.T., GLD
Capital Markets KWB ST, KCE
Growth EAFE MSCI, EFG
Australia Index, EWA
South Africa Index, EZA
SmallCap Blend EAFE MSCI iS, SCZ
Belgium Index, EWK
Energy DJ, IYE
Oil Fund PowerShares, DBO
Pacific VIPERs, VPL
Energy SPDR, XLE
Dividend ex-U.S. DJ iS, IDV
Energy VIPERs, VDE
Oil, Crude, U.S. Oil Fund, USO
Foreign LargeCap EAFE MSCI iS, EFA
Japan Index, EWJ
Basic Materials DJ US, IYM
Germany Index, EWG
Global ex U.S. LargeCap Blend, ACWX
Turkey MSCI iS, TUR
Emerging Markets MSCI iS, EEM
Energy Global, IXC
Europe 350 S&P Index, IEV
Emerging VIPERs, VWO
Sweden Index, EWD
Netherlands Index, EWN
Semiconductor SPDR, XSD
China 25 iS, FXI
Value EAFE MSCI, EFV
Canada Index, EWC
European VIPERs, VGK
Emerging 50 BLDRS, ADRE
Networking, IGN
Latin Am 40, ILF
China LargeCap Growth G D H USX PS, PGJ
Energy & Nat Res iS GS, IGE
France Index, EWQ
EMU Europe Index, EZU
Silver Trust iS, SLV
Austria Index, EWO
Brazil Index, EWZ
Russia MV, RSX
Metals & Mining SPDR, XME
Italy Index, EWI
Spain Index, EWP
WilderHill Clean Energy PS, PBW
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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:
Full report available by subscription only (click here).
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Stock Market Indicators
The Dow Theory reconfirmed a downside Secondary Reaction on 5/14/12 when both Industrials and Transports fell below their lows of the previous 4 weeks.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 3 years on 5/15/12, 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 years on 5/15/12, 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 5/15/12. 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.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) consolidated gains over the past month after peaking on 4/10/12. Systematically, OEX/SPX remains bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA. 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.
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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
1415.32, high of 5/1/2012
1388.71, low of 5/3/2012
1384.42, 50-day SMA
1381.50, Fibonacci 78.6% of 2007-2009 range
1340.34, Fibonacci 23.6% R of 2011-12 range
The S&P 500 Composite Potential Support
1300.49, low of 1/30/2012
1289.59, Fibonacci 38.2% R of 2011-12 range
1277.58, low of 1/13/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1277.60, 200-day SMA
1257.58, Fibonacci 61.8% of 2011 range
1248.58, Fibonacci 50.0% R 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
1226.64, low of 11/9/2011
1222.68, Fibonacci 50% of 2011 range
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1207.56, Fibonacci 61.8% R of 2011-12 range
1204.49, Fibonacci 23.6% of 2009-11 range
1202.37, low of 12/19/2011
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
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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 117.44, 115.69, 114.82, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 123.05 and 123.43.
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 105.85, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance none.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below its lows of the previous 4 months on 5/15/12. Systematically, JNK/LQD remains neutral: below its 50-day SMA, below its 200-day SMA, but the 50-day SMA has been above the 200-day SMA every day since 4/16/12.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) turned down after 3/19/12 and fell below its lows of the previous 3 months on 5/11/12. Systematically, TIP/IEF remains neutral: below its 50-day SMA, above its 200-day SMA, and the 50-day SMA has been above the 200-day SMA every day since 3/14/12.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) closed above its closing price highs of the previous 3 months on 5/15/12. UUP remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA. Support 22.14, 21.89, 21.74, 21.58, 21.07, and 20.84. Resistance 22.85, 23.52, 25.84, 27.19, 28.97.
Crude Oil, United States Oil ETF (USO) fell further below its lows of the previous 6 months on 5/15/12. USO still looks bearish on the chart. Systematically, USO remains neutral: below its 50-day SMA, below its 200-day SMA, but the 50-day SMA has remained above the 200-day SMA consistently every day since 1/3/12. Support 34.54, 32.52, 29.10, 26.28, and 22.74. Resistance 36.79, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) fell further below its lows of the previous 4 months on 5/15/12. Systematically, GLD turned bearish on 4/17/12, when its 50-day SMA crossed below its 200-day SMA. Support: 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 155.57, 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) fell below its lows of the previous 3 years on 5/15/12, 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) fell below its lows of the previous 4 months on 5/15/12. 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 25.65 and 24.44. Resistance: 28.60, 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 4 months on 5/15/12, 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) broke down below its lows of the previous 4 months on 5/15/12. JJC fell below its 200-day SMA on 5/3/12 and fell below its 50-day SMA on 5/2/12. 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
2.05% , CL , COLGATE
6.93% , TJX , TJX
4.14% , A , AGILENT TECH
2.76% , LPX , LOUISIANA PAC
2.78% , LEN , Lennar Corp. (LEN)
1.63% , BF.B , BROWN FORMAN STK B
2.54% , DHI , D.R. HORTON, DHI
0.57% , PSJ , Software, PSJ
1.45% , ADSK , AUTODESK
1.94% , CHD , Church & Dwight
1.14% , DBA , Agriculture DB PS, DBA
0.50% , MYY , Short 100% MidCap 400, MYY
1.61% , MBI , MBIA
1.04% , PEP , PEPSICO
2.28% , FLEX , Flextronics International Ltd
1.07% , GIS , GENERAL MILLS
1.61% , LH , LAB CRP OF AMER
2.17% , JBL , JABIL CIRCUIT
2.14% , DRI , DARDEN REST
1.43% , WPO , Washington Post
0.57% , XHB , Homebuilders SPDR, XHB
2.50% , NIHD , NII Holdings, Inc.
1.93% , CTSH , Cognizant Technology Solutions
1.63% , RHT , Red Hat Inc.
2.40% , PETM , PETsMART Inc
1.21% , UNP , UNION PACIFIC
0.65% , AMZN , Amazoncom Inc
0.21% , PZI , Micro Cap Zachs, PZI
1.29% , CHKP , Check Point Software Technologies Ltd
0.25% , TLH , Bond 10-20 Year US Treas, TLH
1.34% , BMC.O , BMC SOFTWARE
1.78% , PHM , PULTE HOMES
2.71% , LAMR , Lamar Advertising Company
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.49% , EIS , Israel MSCI iS, EIS
-10.73% , AVP , AVON
-2.48% , EWO , Austria Index, EWO
-1.58% , EWK , Belgium Index, EWK
-5.89% , ATI , ALLEGHENY TECH
-3.58% , EWI , Italy Index, EWI
-3.83% , RL , Polo Ralph Lauren
-6.23% , X , US STEEL CORP
-2.45% , EWD , Sweden Index, EWD
-0.57% , IGN , Networking, IGN
-1.48% , EFV , Value EAFE MSCI, EFV
-5.93% , RIMM , RESEARCH IN MOTION LTD
-2.76% , ERIC.O , LM Ericsson Telephone Company
-5.55% , PBI , PITNEY BOWES
-1.05% , EWN , Netherlands Index, EWN
-1.62% , EWM , Malaysia Index, EWM
-2.89% , EWP , Spain Index, EWP
-2.43% , HD , HOME DEPOT
-1.07% , PGF , Financial Preferred, PGF
-4.01% , XME , Metals & Mining SPDR, XME
-0.30% , PUI , Utilities, PUI
-1.53% , EZA , South Africa Index, EZA
-4.32% , PTEN , Patterson-UTI Energy Inc
-1.78% , FRN , Frontier Markets Guggenheim , FRN
-4.01% , GNW , GENWORTH FINANCIAL
-2.15% , MAS , MASCO
-4.66% , SVU , SUPERVALU
-1.37% , VAW , Materials VIPERs, VAW
-2.20% , IGE , Energy & Nat Res iS GS, IGE
-4.26% , CLF , CLIFFS NATURAL RESOURCES, CLF
-0.56% , PSI , Semiconductors, PSI
-5.40% , NBR , NABORS
-1.69% , EL , Estee Lauder
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.39% Thailand MSCI iS, THD
1.14% Agriculture DB PS, DBA
0.86% Bond Muni ATM-Free S&P iS, MUB
0.57% Homebuilders SPDR, XHB
0.51% Bear, Short S&P 500, SH
0.43% India PS, PIN
0.41% Biotech SPDR, XBI
0.40% Bond, 20+ Years Treasury, TLT
0.32% Taiwan Index, EWT
0.19% Commodity Tracking, DBC
0.12% India Earnings WTree, EPI
0.12% Bond, TIPS, TIP
0.11% Growth BARRA Small Cap 600, IJT
0.08% Transportation Av DJ, IYT
0.06% SmallCap S&P 600, IJR
0.04% Microcap Russell, IWC
0.03% Bond, 10 Year Treasury, IEF
0.01% Value SmallCap S&P 600 B, IJS
0.01% Bond Treasury Short-Term iS, SHV
-0.01% Bond, 1-3 Year Treasury, SHY
-0.04% China 25 iS, FXI
-0.05% Bond, Aggregate, AGG
-0.12% Consumer Staples SPDR, XLP
-0.13% Bond, Corp, LQD
-0.15% Consumer Discretionary SPDR, XLY
-0.16% Growth SmallCap VIPERs, VBK
-0.17% Value SmallCap Russell 2000, IWN
-0.18% Dividend Appreciation Vipers, VIG
-0.18% SmallCap Russell 2000, IWM
-0.18% Hong Kong Index, EWH
-0.26% Growth SmallCap R 2000, IWO
-0.26% Preferred Stock iS, PFF
-0.28% Technology DJ US, IYW
-0.28% Technology SPDR, XLK
-0.30% Small Cap VIPERs, VB
-0.30% Growth MidCap 400 B, IJK
-0.31% Info Tech VIPERs, VGT
-0.33% Singapore Index, EWS
-0.33% QQQ Nasdaq 100 Trust, QQQ
-0.37% Growth S&P 500/BARRA, IVW
-0.37% Value SmallCap VIPERS, VBR
-0.37% Bond EmrgMkt JPM iS, EMB
-0.38% Telecom DJ US, IYZ
-0.39% MidCap S&P 400 SPDRs, MDY
-0.40% Value LargeCap Dynamic PS, PWV
-0.41% Growth 1000 Russell, IWF
-0.43% Bond, High-Yield Junk, JNK
-0.45% Dividend SPDR, SDY
-0.47% MidCap S&P 400 iS, IJH
-0.47% Growth VIPERs, VUG
-0.49% Bond, High-Yield Corporate, HYG
-0.49% Real Estate US DJ, IYR
-0.50% Industrial SPDR, XLI
-0.50% DIAMONDS (DJIA), DIA
-0.52% Financial SPDR, XLF
-0.52% Financials VIPERs, VFH
-0.53% REIT VIPERs, VNQ
-0.53% Financial Services DJ, IYG
-0.53% Semiconductor SPDR, XSD
-0.54% Blend Total Market VIPERs, VTI
-0.54% REIT Wilshire, RWR
-0.55% LargeCap 1000 R, IWB
-0.55% China LargeCap Growth G D H USX PS, PGJ
-0.55% Realty Cohen & Steers, ICF
-0.57% Networking, IGN
-0.57% LargeCap Blend S&P 100, OEF
-0.57% S&P 500 SPDRs LargeCap Blend, SPY
-0.58% LargeCap Blend Russell 3000, IWV
-0.59% S&P 500 iS LargeCap Blend, IVV
-0.59% Utilities VIPERs, VPU
-0.60% Health Care SPDR, XLV
-0.60% LargeCap VIPERs, VV
-0.60% Financial DJ US, IYF
-0.62% Growth MidCap Russell, IWP
-0.63% Value MidCap S&P 400 B, IJJ
-0.64% MidCap Russell, IWR
-0.65% Dividend DJ Select, DVY
-0.67% Value VIPERs, VTV
-0.69% Dividend International, PID
-0.70% Utilities SPDR, XLU
-0.70% Value 1000 Russell, IWD
-0.71% LargeCap Blend S&P=Weight R, RSP
-0.72% Water Resources, PHO
-0.72% Capital Markets KWB ST, KCE
-0.75% Emerging VIPERs, VWO
-0.80% Pacific ex-Japan, EPP
-0.80% Value S&P 500 B, IVE
-0.80% Value MidCap Russell, IWS
-0.84% Global 100, IOO
-0.86% Bond Ex-US Treas, BWX
-0.87% Emerging Markets, EEM
-0.88% Dividend High Yield Equity PS, PEY
-0.92% Russia MV, RSX
-0.93% Oil, Crude, U.S. Oil Fund, USO
-0.98% Pacific VIPERs, VPL
-0.99% Australia Index, EWA
-1.00% Switzerland Index, EWL
-1.00% Oil Fund PowerShares, DBO
-1.03% Emerging 50 BLDRS, ADRE
-1.04% Indonesia MV, IDX
-1.05% Gold Shares S.T., GLD
-1.05% Netherlands Index, EWN
-1.06% Semiconductor iS IGW, SOXX
-1.07% Financial Preferred, PGF
-1.19% South Korea Index, EWY
-1.23% Global ex US ACWI iS, ACWX
-1.24% United Kingdom Index, EWU
-1.26% EAFE Index, EFA
-1.26% Japan Index, EWJ
-1.26% Growth EAFE MSCI, EFG
-1.29% WilderHill Clean Energy PS, PBW
-1.38% Energy Global, IXC
-1.46% Canada Index, EWC
-1.46% European VIPERs, VGK
-1.48% Value EAFE MSCI, EFV
-1.49% Materials SPDR, XLB
-1.52% Energy DJ, IYE
-1.53% South Africa Index, EZA
-1.56% Europe 350 S&P Index, IEV
-1.58% Belgium Index, EWK
-1.58% Small Cap EAFE MSCI iS, SCZ
-1.61% France Index, EWQ
-1.62% Malaysia Index, EWM
-1.66% Energy VIPERs, VDE
-1.66% Energy SPDR, XLE
-1.68% Latin Am 40, ILF
-1.69% Germany Index, EWG
-1.78% Frontier Markets Guggenheim , FRN
-1.94% Brazil Index, EWZ
-1.96% EMU Europe Index, EZU
-1.98% Turkey MSCI iS, TUR
-2.02% Mexico Index, EWW
-2.03% Basic Materials DJ US, IYM
-2.04% Silver Trust iS, SLV
-2.20% Energy & Nat Res iS GS, IGE
-2.30% Chile MSCI iS, ECH
-2.45% Sweden Index, EWD
-2.48% Austria Index, EWO
-2.89% Spain Index, EWP
-3.58% Italy Index, EWI
-4.01% Metals & Mining SPDR, XME
