By Robert W. Colby, Senior Analyst TraderPlanet.com
Stocks showed some resilience.
Some momentum oscillators started to firm up.
The Energy Stock Sector Relative Strength Ratio (XLE/SPY) rose to a new all-time high.
The Consumer Discretionary Stock Sector Relative Strength Ratio (XLY/SPY) fell to its lowest level in 6 years.
The Financial Stock Sector Relative Strength Ratio (XLF/SPY) fell to its lowest level in 7 years.
The Small Cap/Large Cap Relative Strength Ratio has started to show its typical seasonal strength.
But stock prices recovered in the afternoon and made back nearly all of the lost ground from the open. Most of the major stock price indexes closed moderately higher, with the exception of Financials and Consumer Discretionary Stock Sectors. Materials, Technology, and Energy stocks were strong, rising more than 1%.
Volume on the NYSE rose by 2%, indicating a slight increase in trading activity.
Breadth ended 12% net Bullish, with a greater number of Advancing stocks than Declining stocks on the NYSE.
But still, the New Highs-New Lows on the NYSE ended at 75% net Bearish.
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
1.46% , PMR , Retail, PMR
1.47% , DSG , Growth Small Cap DJ, DSG
6.11% , ETN , EATON
1.83% , PSJ , Software, PSJ
0.54% , PWY , Value SmallCap Dynamic PS, PWY
1.77% , JKJ , SmallCap Core iS M, JKJ
1.46% , PWO , OTC Dynamic PS, PWO
4.29% , ATVI , Activision Inc.
1.30% , BDH , Broadband H, BDH
4.76% , RIMM , RESEARCH IN MOTION LTD
1.22% , PTE , Telecommunications & Wireless, PTE
3.46% , NKE , NIKE STK B
1.00% , JKL , Value SmallCap iS M, JKL
1.80% , JKK , Growth SmallCap iS M, JKK
0.51% , KLD , LargeCap Blend Socially Responsible iS, KLD
3.09% , BF.B , BROWN FORMAN STK B
2.31% , HHH , Internet H, HHH
1.53% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
1.52% , IJT , Growth BARRA Small Cap 600, IJT
3.10% , HMA , HEALTH MGMT STK A
1.57% , PWT , Growth SmallCap Dynamic PS, PWT
2.90% , RHT , Red Hat Inc.
0.82% , JKG , MidCap Blend Core iS M, JKG
5.34% , CTSH , Cognizant Technology Solutions
2.22% , WLP , WELLPOINT HEALTH
6.43% , RSH , RADIOSHACK
0.89% , IAH , Internet Architecture H, IAH
4.62% , ADM , ARCHER DANIELS
4.63% , CMI , CUMMINS
5.03% , NIHD , NII Holdings, Inc.
3.59% , DE , DEERE & CO
3.73% , ISIL , INTERSIL CORP
1.29% , HCR , MANOR CARE
5.28% , CTAS , CINTAS
1.70% , MTK , Technology MS sT, MTK
0.52% , FPX , IPOs, First Tr IPOX-100, FPX
0.32% , JKD , LargeCap Blend Core iS M, JKD
1.58% , IGV , Software, IGV
1.29% , IJK , Growth MidCap 400 B, IJK
1.80% , SWH , Software H, SWH
1.45% , JKH , MidCap Growth iS M, JKH
0.41% , VPU , Utilities VIPERs, VPU
1.75% , PXQ , Networking, PXQ
5.26% , MON , MONSANTO
2.82% , KR , KROGER
1.33% , SVU , SUPERVALU
2.33% , SIAL , SIGMA ALDRICH
0.54% , TTH , Telecom H, TTH
1.76% , NYT , NY TIMES STK A
1.58% , IWC , Microcap Russell, IWC
Bearish Stocks: Falling Price and Rising Volume
% Price Change, Symbol, Name
-26.17% , MBI , MBIA
-11.92% , AM , AMER GREETINGS STK A
-7.22% , WOR , WORTHINGTON INDS
-5.90% , LEG , LEGGETT & PLATT
-4.20% , CNP , CENTERPNT ENERGY
-0.44% , RPV , Value S&P 500, RPV
-2.86% , CAG , CONAGRA FOODS
-3.78% , STI , SUNTRUST BANKS
-5.87% , ETFC.O , E*TRADE FINANCIAL
-4.14% , EWI , Italy Index, EWI
-3.82% , PAYX , PAYCHEX
-4.28% , EWA , Australia Index, EWA
-2.65% , MYY , Short 100% MidCap 400, MYY
-1.89% , MCO , MOODYS CORP
-1.65% , CVS , CVS
-3.23% , CIT , CIT GROUP
-2.30% , XMSR , XM Satellite R
-6.67% , XL , XL CAPITAL STK A
-1.54% , PBG , PEPSI BOTTLING
-2.64% , TGT , TARGET
-2.26% , APOL , APOLLO GROUP
-2.84% , ATI , ALLEGHENY TECH
-2.66% , CFC , COUNTRYWIDE FNCL
-1.99% , CIEN.O , CIENA
-1.27% , PETM , PETsMART Inc
-3.05% , EWM , Malaysia Index, EWM
-1.41% , BEN , FRANKLIN RSC
-1.62% , VBR , Value SmallCap VIPERS, VBR
-3.22% , PLD , PROLOGIS TRUST
-1.47% , WWY , WM WRIGLEY JR
-1.21% , GPS , GAP
-1.23% , MHP , MCGRAW HILL
-1.44% , PPL , PPL
-0.69% , VTV , Value VIPERs, VTV
-2.03% , VNQ , REIT VIPERs, VNQ
-5.15% , MTG , MGIC INVESTMENT
-1.70% , AXP , AMERICAN EXPRESS
-1.35% , MRK , MERCK & CO
-3.49% , FRE , FREDDIE MAC
-0.99% , PRU , PRUDENTIAL FINL
-1.60% , TROW , T ROWE PRICE GP
-1.14% , APD , AIR PRODS & CHEM
-0.73% , MYL , MYLAN LABS
-2.64% , BBT , BB&T
-0.48% , RKH , Bank Regional H, RKH
-0.98% , OMC , OMNICOM
-1.75% , ODP , OFFICE DEPOT
-1.48% , JPM , J P MORGAN CHASE
-1.79% , KEY , KEYCORP
-1.06% , FDX , FEDEX
Sectors: among the 9 major U.S. sectors, 7 rose and 2 fell.
Major Sectors Ranked for the Day
% Price Change, Sector
0.59% Health Care
0.49% Consumer Discretionary
-0.45% Consumer Staples
Looking beyond the daily fluctuation to the major trends (listed in order of long-term relative strength):
Utilities (XLU) Bullish, Overweight. This defensive sector’s Relative Strength made a new 6-year high on 12/5/07, and price made a new all-time high on 12/10/07.
Materials (XLB) Bullish, Overweight. The XLB/SPY Relative Strength Ratio made a new all-time high on 11/8/07. Price made new all-time high on 10/29/07. The long-term Relative Strength trend has strongly outperformed since 9/27/2000.
Technology (XLK) Neutral, Market Weight. Relative Strength turned up from a low on 11/30/07. And, long term, XLK has been relatively strong compared to the S&P since its low on 7/24/06.
Consumer Staples (XLP) Bullish, Overweight. This defensive sector’s price made a new all-time high on 12/10/07, and Relative Strength made a new 6-year high on 11/26/07.
Health Care (XLV) Neutral, Market Weight. XLV price moved up to a new 6-month high on 12/3/07. Relative Strength moved up to a new 13-month high on 11/27/07.
Industrial (XLI) Neutral, Market Weight. Price and Relative Strength have been chopping sideways since 8/3/07. Longer-term trends appear Bullish.
Consumer Discretionary (XLY) Bearish, Underweight. On 12/20/07, the XLY/SPY Relative Strength Ratio fell to its lowest level in 6 years. Relative Strength has been trending down since 1/5/05. XLY price made a new 14-month low on 11/27/07.
Financial (XLF) Bearish, Underweight. On 12/20/07, the XLF/SPY Relative Strength Ratio fell to its lowest level in 7 years. Relative Strength has been trending down since 2/20/07. XLF price hit a new 2.5-year low on 11/26/07.
Foreign stock indices have underperformed U.S. stock indices short term, since 11/27/07. The EFA (the EAFE, international developed country stock markets, ex the U.S. and Canada) made a new price high on 10/31/07 and a new relative strength high on 11/27/07. 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 Composite and NASDAQ 100 underperformed the S&P since 11/7/07. But trends in different time frames conflict. Longer term, NASDAQ outperformed from 8/8/06 to 11/7/07, including a new 6-year Relative Strength high on 11/7/07 and a new price high on 10/31/07.
Growth Stock/Value Stock Relative Strength Ratio has been in a neutral trend since 11/7/07. The long-term, the main trend for the Growth/Value ratio (IWF/IWD) has been rising since 8/8/06.
The Small Cap/Large Cap Relative Strength Ratio has started to show its typical seasonal strength. Year end and early January often has been good for small caps. But the main long-term trend is Relatively Bearish for Small Caps. The ratio fell to a new 2.5-year low on 12/17/07. Small Caps substantially underperformed Large Caps since 4/19/06.
Crude Oil Futures consolidated with a second consecutive “Inside Day”, where the high-low price range is contained entirely within the previous day’s range. An “Inside Day” indicates consolidation. Oil has been in a correction/consolidation phase for more than 3 weeks. Resistance is at the 12/13/07 high of 94.85 and at the 11/21/07 high of 99.29. Oil found support at the 12/6/07 low of 85.82. The U.S. OIL FUND ETF (AMEX: USO) is not a pure play on Crude Oil, although it generally moves in the same direction.
The Energy stock sector outperformed the USO since 11/26/07. Previously, over the 6 months from 5/30/07 to 11/26/07, XLE lagged oil the commodity.
February Gold Futures fell below its previous 2-day lows, a sign of weakness for the very short term. In the bigger picture, Gold remains in a consolidation pattern, with the upper end of the trading range at 855.00 set on 11/7/07 and the lower end at 778.40 set on 11/20/07.
Silver’s main trend is Bearish compared to Gold. The iShares Silver Trust (AMEX: SLV) has been relatively weak since 12/7/06.
The Gold Miners ETF (GDX) has underperformed Gold Futures since 10/31/07. Price made a new 13-week low on 12/18/07.
Inflation expectations have recovered since 12/5/07. The short-term trend has been mostly rising, based on the behavior of the ratio of two ETFs, TIP/IEF.
U.S. Treasury Bond prices gave up early gains. Bonds may have hit resistance after rising this week. Bonds have been in short-term correction since their price top on 11/26/07. 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.
The U.S. dollar rose to another new 2-month closing price high. The short-term price trend has been up since the oversold low at 74.65 on 11/23/07. Longer term, there could be plenty of overhead resistance and the main trend is still Bearish. The dollar fell 19% from its high of 92.53 on 11/16/05 to its low of 74.65 on 11/23/07, moving it into “oversold”.
1.90% Nasdaq 100
1.63% Computer Tech
1.53% Nasdaq Composite
1.51% Russell 2000
1.34% Commodity Related
1.33% S&P Small Caps
1.24% Natural Gas
1.18% S&P Mid Caps
1.18% Oil Services
0.98% AMEX Composite
0.98% Value Line
0.84% Disk Drives
0.69% Health Care Products
0.65% Hong Kong
0.63% Russell 3000
0.62% Wilshire 5000
0.59% Health Care
0.57% Broker Dealers
0.57% 30Y T-Bond
0.55% Russell 1000
0.54% United Kingdom
0.49% S&P 500
0.49% Consumer Discretionary
0.47% Canadian Dollar
0.42% S&P 100
0.42% Gold Mining
0.41% Health Care
0.38% NYSE Composite
0.29% Dow Industrial
0.26% US Dollar Index
0.26% Japanese Yen
0.14% Dow Composite
-0.01% Dow Transports
-0.02% Dow Utilities
-0.03% Swiss Franc
-0.07% Australian Dollar
-0.26% Euro Index
-0.45% Consumer Staples
-0.70% British Pound
-1.23% South Korea