By Robert W. Colby, Senior Analyst TraderPlanet.com
The strong get stronger and the weak get weaker.
Materials stock sector: Both Price and Relative Strength made new all-time highs
Technology stock sector made a new 6-year closing price high
NASDAQ 100 made a new 6-year Price high.
Utilities stock sector: Price and Relative Strength made new 2-month highs.
December Crude Oil Futures rose to a new record at $93.80.
Gold popped up another new high while the U.S. dollar sank to another new low.
Relative Strength fell to a new 6-year low for the Consumer Discretionary stock sector.
Breadth ended 17% net Bullish, with more Advancing stocks than Declining stocks on the NYSE. The Cumulative Daily Advance-Decline Line for the NYSE is now in a short-term uptrend.
Total volume fell on the NYSE and on the NASDAQ, suggesting a less emotional atmosphere than last week.
New Highs-New Lows on the NYSE ended at 55% net Bullish. The shift to the Bullish side after a string of Bearish readings is encouraging to the Bulls.
From 10/11/07 to 10/22/07, the U.S. stock market retraced 43.2% (intraday) of its August-October gain. That magnitude was entirely typical and normal for a minor correction. The market does not move in a straight line, and downside corrections or shakeouts are to be expected in any uptrend. The long-term Primary Tide Trend remains Bullish, according to the Dow Theory.
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
% Price Change, Symbol, Name
0.54% , XSD , Semiconductor SPDR, XSD
2.01% , PXQ , Networking, PXQ
8.06% , WY , WEYERHAEUSER
0.78% , DSG , Growth Small Cap DJ, DSG
4.08% , RSH , RADIOSHACK
1.42% , VPL , Pacific VIPERs, VPL
0.68% , DSV , Value Small Cap DJ, DSV
6.80% , DDS , DILLARD STK A
0.53% , KLD , LargeCap Blend Socially Responsible iS, KLD
1.50% , KCE , Capital Markets KWB ST, KCE
2.04% , AVP , AVON
4.01% , BMC , BMC SOFTWARE
2.55% , PBW , WilderHill Clean Energy PS, PBW
5.01% , WYNN , Wynn Resorts L
2.44% , ADRA , Asia 50 BLDRS, ADRA
0.83% , VGK , European VIPERs, VGK
2.12% , BHH , Internet B2B H, BHH
0.46% , NY , Value LargeCap NYSE 100 iS, NY
0.66% , FEZ , Euro STOXX 50, FEZ
4.64% , CIEN.O , CIENA
5.68% , GRMN , GARMIN LTD
4.52% , APA , APACHE
5.92% , JNPR , Juniper Networks Inc
2.84% , VIA , VIACOM INC. (New)
1.82% , CAH , CARDINAL HEALTH
1.24% , EWG , Germany Index, EWG
1.23% , IIH , Internet Infrastructure H, IIH
0.42% , JKE , Growth LargeCap iS M, JKE
0.42% , JKG , MidCap Blend Core iS M, JKG
2.55% , DHR , DANAHER
3.34% , EWH , Hong Kong Index, EWH
1.18% , EWA , Australia Index, EWA
5.06% , URBN , Urban Outfitters Inc.
1.73% , IGT , INTL GAME TECH
3.18% , CC , CIRCUIT CITY STR
1.68% , D , DOMINION RSCS
3.20% , PGJ , China LargeCap Growth G D H USX PS, PGJ
0.27% , EZU , EMU Europe Index, EZU
2.99% , HOG , HARLEY DAVIDSON
1.69% , DELL , DELL
1.92% , CA , COMPUTER ASSOC
1.69% , VWO , Emerging VIPERs, VWO
1.00% , RRD , RR DONNELLEY SON
0.81% , IAH , Internet Architecture H, IAH
0.55% , PHJ , Dividend Growth PS, PHJ
2.10% , ACS , AFFILIATED COMPUTER
0.46% , ELG , Growth Large Cap, ELG
1.31% , ADP , AUTOMATIC DATA
1.88% , PEP , PEPSICO
0.85% , ADRD , Developed 100 BLDRS, ADRD
Bearish Stocks: Falling Price and Rising Volume
% Price Change, Symbol, Name
-14.10% , ODP , OFFICE DEPOT
-4.14% , TUP , TUPPERWARE
-5.19% , LPX , LOUISIANA PAC
-2.44% , K , KELLOGG
-2.19% , LH , LAB CRP OF AMER
-1.99% , ERIC.O , LM Ericsson Telephone Company
-3.63% , CTB , COOPER TIRE
-5.47% , YHOO , YAHOO
-2.86% , ASH , ASHLAND
-2.26% , CHRW.O , CH Robinson Worldwide Inc, CHRWD
-0.51% , HET , HARRAHS ENTER
-0.51% , BBH , Biotech H, BBH
-2.35% , NVDA , NVIDIA
-2.14% , LTR , LOEWS
-3.44% , LXK , LEXMARK INTL STK A
-1.52% , CAT , CATERPILLAR
-2.48% , BIIB , BIOGEN IDEC
-1.95% , GENZ , GENZYME GEN
-1.20% , NOVL , NOVELL
-0.69% , IVGN , Invitrogen Corporation
-1.52% , BRCM , BROADCOM STK A
-0.55% , MZZ , Short 200% MidCap 400 PS, MZZ
-0.68% , CTL , CENTURYTEL
-0.33% , UNP , UNION PACIFIC
-0.24% , RZV , Value SmallCap S&P 600, RZV
-0.44% , BSX , BOSTON SCIENT
-0.35% , MYY , Short 100% MidCap 400, MYY
-0.36% , PBE , Biotech & Genome, PBE
-1.14% , DRI , DARDEN REST
-2.29% , NTAP , NETWK APPLIANCE
-1.67% , HAL , HALLIBURTON
-0.22% , PIC , Insurance, PIC
-0.67% , CAG , CONAGRA FOODS
-0.69% , MKC , MCCORMICK
-1.10% , DGX , QUEST DIAG
-0.68% , AMGN , AMGEN
-1.94% , AMP , Ameriprise Financial Inc.
-0.11% , TEVA , Teva Pharmaceutical Industries Limited
-1.96% , SOV , SOVEREIGN BANC
-1.75% , PRU , PRUDENTIAL FINL
-0.86% , GD , GENERAL DYNAMICS
-0.51% , SH , Short 100% S&P 500, SH
-1.86% , ATVI , Activision Inc.
-1.51% , MOT , MOTOROLA
-0.71% , AVY , AVERY DENNISON
-0.80% , MCK , MCKESSON CORP
-0.05% , RFG , Growth MidCap S&P 400, RFG
-1.35% , GT , GOODYEAR TIRE
-2.40% , HUM , HUMANA
-0.97% , Q , QWEST COMMUNICAT
Sectors: among the 9 major U.S. sectors, all 9 rose.
Major Sectors Ranked for the Day
% Price Change, Sector
0.42% Health Care
0.27% Consumer Discretionary
0.04% Consumer Staples
Looking beyond the daily fluctuation to the major trends (listed in order of long-term relative strength):
Energy (XLE) Bullish, Overweight. XLE made an all-time closing price high on 10/16/07, and XLE made an all-time high in Relative Strength on 10/18/07. XLE has been strong compared to the S&P since 3/12/03.
Materials (XLB) Bullish, Overweight. Both Price and Relative Strength made new all-time highs on 10/29/07. The long-term Relative Strength trend has strongly outperformed since 9/27/2000.
Technology (XLK) Bullish, Overweight. XLK made a new 6-year closing price high on 10/29/07, and Relative Strength made a new 2-year high on 10/23/07. Long term, XLK has been relatively strong compared to the S&P since its low on 7/24/06.
Utilities (XLU) Bullish, Overweight. Both Price and Relative Strength for this defensive sector made new 2-month highs on 10/29/07. Utilities have improved significantly since their Relative Strength low on 9/28/07.
Industrial (XLI) Neutral, Market Weight. Industrial stock sector price made an all-time price high on 10/10/07, but Relative Strength has been lagging.
Consumer Staples (XLP) Neutral, Market Weight. This defensive sector’s Relative Strength has improved since its low on 10/9/07.
Health Care (XLV) Bearish, Underweight. Relative Strength has been trending down since 10/9/02, and it made a new 5-year low on 7/19/07, thereby confirming a major downtrend.
Consumer Discretionary (XLY) Bearish, Underweight. On 10/29/07, the XLY/SPY Relative Strength ratio fell to its lowest level in 6 years. Relative Strength has been trending down since 1/5/05.
Financial (XLF) Bearish, Underweight. On 10/25/07, the XLF/SPY Relative Strength ratio fell to its lowest level in more than 6 years. Relative Strength has been trending down since 2/20/07.
Foreign stock indices’ Price and Relative Strength made new highs. The EFA (the EAFE, international developed country stock markets, ex the U.S. and Canada) made both a new price high and a new relative strength high on 10/29/07. EFA has substantially outperformed long term, since the Bull market started in 2002, and the secular trend is still Bullish. My Top 10 ETF Relative Strength Ranks have been nearly all Foreign for many months.
NASDAQ 100 made a new 6-year Price high. NASDAQ Composite index price made a new 6-year high on 10/11/07, and Relative strength made a new 17-month high on 10/23/07. Longer term, NASDAQ has outperformed since 8/8/06.
Growth Stock/Value Stock Relative Strength ratio consolidated after rising to a new 20-month high last week. Growth price made a new 6-year high on 10/11/07. Growth stocks outperformed Value stocks since 8/8/06. The main trend for the Growth/Value ratio (IWF/IWD) is confirmed Bullish.
Small Caps substantially underperformed Large Caps since 4/19/06, and the main long-term trend is Bearish for Small Caps.
December Crude Oil Futures rose to a new record at $93.80. The chart is looking extended, even though all trends remain Bullish. Support appears at previous resistance at 84.10 and at previous minor lows in the 78.25-78.35 zone. Note that the U.S. OIL FUND ETF (AMEX: USO) is not a pure play on Crude Oil.
The Energy stock sector underperformed the USO and outperformed the SPY. Longer term, since 3/12/03, the stocks in the Energy Select Sector SPDR ETF (XLE) have significantly outperformed crude oil as a commodity, as well as the S&P 500. So, the Relative Strength major trend is Bullish for the energy stocks.
December Gold Futures made a new price high at 798.30. Gold set a new 28-year high on 10/29/07. The Gold Trust ETF (NYSE: GLD) also hit a new high. These major trends remain Bullish.
Silver’s main trend is relatively Bearish. Compared to Gold, the iShares Silver Trust (AMEX: SLV) has been relatively weak since 12/7/06.
The Gold Miners ETF (GDX) price made a new high.
Inflation expectations jumped up since 10/24/07. This is based on the behavior of the ratio of two ETFs, TIP/IEF.
U.S. Treasury Bonds turned choppy. The short-term trend looks uncertain. Long-term, it seems possible that the iShares Lehman 20+ Year U.S. Treasury Bond ETF (AMEX: TLT) ended a normal oversold bounce in a Bearish trend on 9/10/07. Bonds remain reactive to news about the credit crisis: the worse the credit crisis, the higher the Bond prices; the better the credit crisis, the lower the Bond prices.
U.S. dollar sank to another new low. The main trend has been confirmed Bearish—again and again. Longer term, the dollar fell 16% over the past 23 months, and the main tidal force remains very Bearish.
Daily Rankings of Major Global Markets, Ranked from Strongest to Weakest of the Day:
3.34% Hong Kong
1.67% Gold Mining
1.47% Commodity Related
1.44% South Korea
1.16% AMEX Composite
1.00% Canadian Dollar
0.95% Broker Dealers
0.86% United Kingdom
0.73% Dow Utilities
0.66% NYSE Composite
0.64% Disk Drives
0.52% Natural Gas
0.50% S&P 100
0.49% British Pound
0.47% Nasdaq Composite
0.46% Dow Industrial
0.42% Health Care
0.41% Wilshire 5000
0.41% Oil Services
0.40% Nasdaq 100
0.40% Russell 1000
0.37% S&P 500
0.37% Russell 3000
0.34% Computer Tech
0.32% Health Care
0.32% Australian Dollar
0.30% Euro Index
0.28% S&P Mid Caps
0.28% Value Line
0.27% Consumer Discretionary
0.25% Dow Composite
0.19% Health Care Products
0.14% 30Y T-Bond
0.04% Russell 2000
0.04% Consumer Staples
-0.04% S&P Small Caps
-0.06% Swiss Franc
-0.23% US Dollar Index
-0.33% Japanese Yen
-0.46% Dow Transports