By Robert W. Colby, Senior Analyst TraderPlanet.com
Stocks turned choppy and closed mixed.
Put/Call Ratios indicate neutral sentiment.
Stock Price Oscillators have lost Momentum.
Crude Oil June futures jumped to another new all-time high of 126.98.
Energy stocks were strong, while Financials were weak–again.
Health Care Stock Sector Relative Strength Ratio fell to another new 6-year low, again confirming the existing Primary Bearish trend.
The Dow Industrials, S&P 500, and the NASDAQ Composite all remain below their falling 200-day simple moving averages. MACD remains below its Signal Line and is falling, based on the end-of-day SPY. I still am assuming that the March-May rally was nothing more than a counter-trend rally and Secondary Reaction Continuation Pattern within the context of a Primary Bearish Trend.
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
3.62% , PXQ , Networking, PXQ
14.83% , FLR , FLUOR
0.74% , XSD , Semiconductor SPDR, XSD
5.13% , SOV , SOVEREIGN BANC
5.40% , MHP , MCGRAW HILL
0.56% , SWH , Software H, SWH
0.87% , EDS , ELECTR DATA
0.99% , PSJ , Software, PSJ
4.51% , SNDK , SanDisk Corporation
2.39% , SNPS , Synopsys Inc
4.06% , TIF , TIFFANY
5.15% , YHOO , YAHOO
3.65% , DISH , EchoStar Communications Corporation
4.24% , MCO , MOODYS CORP
2.07% , LIZ , LIZ CLAIRBORNE
0.99% , IGV , Software, IGV
3.97% , CFC , COUNTRYWIDE FNCL
3.21% , ISIL , INTERSIL CORP
0.68% , VO , MidCap VIPERs, VO
0.24% , VOX , Telecom Services VIPERs, VOX
1.69% , CAH , CARDINAL HEALTH
2.77% , IACI , IAC/INTERACTIVCORP
3.07% , ABT , ABBOTT LABS
0.55% , PEJ , Leisure & Entertainment, PEJ
3.62% , DLX , DELUXE
0.58% , PZI , Micro Cap Zachs, PZI
2.06% , AIG , AMER INTL GROUP
0.72% , VBK , Growth SmallCap VIPERs, VBK
0.81% , PWY , Value SmallCap Dynamic PS, PWY
1.41% , EWT , Taiwan Index, EWT
2.85% , HAL , HALLIBURTON
1.84% , IGT , INTL GAME TECH
0.62% , PWO , OTC Dynamic PS, PWO
3.25% , DELL , DELL
1.20% , SWK , STANLEY WORKS
2.01% , PKB , Building & Construction, PKB
1.91% , ACS , AFFILIATED COMPUTER
0.90% , JKH , MidCap Growth iS M, JKH
1.83% , VIA , VIACOM INC. (New)
1.53% , APD , AIR PRODS & CHEM
Bearish Stocks: Falling Price and Rising Volume
% Price Change, Symbol , Name
-5.47% , HPQ , HEWLETT PACKARD
-3.90% , ZMH , ZIMMER HLDGS
-4.64% , TJX , TJX
-1.14% , EWN , Netherlands Index, EWN
-0.74% , EWP , Spain Index, EWP
-5.13% , STT , STATE STREET
-1.41% , EWK , Belgium Index, EWK
-2.98% , BSX , BOSTON SCIENT
-2.94% , JNS , JANUS CAPITAL
-0.54% , EWG , Germany Index, EWG
-7.62% , ABK , AMBAC FINL GRP
-3.63% , FRE , FREDDIE MAC
-2.65% , WFC , WELLS FARGO
-0.83% , IEF , Bond, 10 Year Treasury, IEF
-0.30% , EWQ , France Index, EWQ
-3.61% , WM , WASHINGTON MUT
-2.05% , WPI , WATSON PHARM
-1.56% , AEE , AMEREN
-0.54% , PHJ , Dividend Growth PS, PHJ
-2.54% , CI , CIGNA
-2.70% , HMA , HEALTH MGMT STK A
-0.41% , IYH , Healthcare DJ, IYH
-4.02% , COF , CAPITAL ONE FNCL
-1.45% , TER , TERADYNE
-1.83% , STI , SUNTRUST BANKS
-2.70% , GM , GENERAL MOTORS
-2.08% , KG , KING PHARM
-3.66% , PHM , PULTE HOMES
-0.06% , PMR , Retail, PMR
-2.36% , WMT , WAL MART STORES
-0.30% , XLG , LargeCap Rydex Rus Top 50, XLG
-1.09% , EWS , Singapore Index, EWS
-2.49% , FITB , FIFTH THIRD BANC
-0.46% , VHT , Health Care VIPERs, VHT
-3.73% , JPM , J P MORGAN CHASE
-0.44% , EPP , Pacific ex-Japan, EPP
-2.48% , LLY , ELI LILLY
-2.20% , CECO , CAREER EDUCATION CORP
-2.00% , MTB , M&T BANK
-1.07% , VFH , Financials VIPERs, VFH
Sectors: among the 9 major U.S. sectors, 4 rose and 4 fell.
Major Sectors Ranked for the Day
% Price Change Sector
1.64% Energy SPDR, XLE
0.67% Industrial SPDR, XLI
0.56% Materials SPDR, XLB
0.37% Consumer Discretionary SPDR, XLY
0.00% Technology SPDR, XLK
-0.15% Utilities SPDR, XLU
-0.36% Consumer Staples SPDR, XLP
-0.91% Financial SPDR, XLF
-0.95% Health Care SPDR, XLV
Energy (XLE) Neutral, Market Weight. On 4/22/08, both the XLE price close and the XLE/SPY Relative Strength Ratio rose to new all-time highs, again confirming a major uptrend.
Materials (XLB) Neutral, Market Weight. On 4/16/08, both the XLB price and the XLB/SPY Relative Strength Ratio rose to new all-time highs, confirming a major uptrend.
Industrial (XLI) Neutral, Market Weight. On 5/1/08, the XLI/SPY Relative Strength Ratio rose to a new 3-month high, confirming an improving intermediate-term trend.
Technology (XLK) Neutral, Market Weight. On 5/12/08, the XLK/SPY Relative Strength Ratio rose to a new 3-month high, signaling an improving intermediate-term trend.
Consumer Staples (XLP) Neutral, Market Weight. On 5/6/08, the XLP/SPY Relative Strength Ratio fell to a new 3-month low, confirming a corrective intermediate-term trend.
Utilities (XLU) Neutral, Market Weight. The XLU/SPY Relative Strength Ratio has been in a moderately rising trend since 3/25/08, and so Utilities have improved somewhat in these rankings.
Consumer Discretionary (XLY) Bearish, Underweight. On 4/30/08, the XLY/SPY Relative Strength Ratio fell to a new 3-month low, suggesting renewed weakness. On 1/11/08, the XLY/SPY Relative Strength Ratio fell to a new 6-year low, confirming a major downtrend.
Health Care (XLV) Bearish, Underweight. On 5/13/08, the XLV/SPY Relative Strength Ratio fell to a new 6-year low, again confirming the existing Primary Bearish trend.
Financial (XLF) Bearish, Underweight. On 3/17/08, both absolute price and the XLF/SPY Relative Strength Ratio fell to their lowest levels in nearly 5-years, again confirming a major Bearish trend.
Foreign stock indexes outperformed since 2/8/08. In addition, from the major bottom on 3/12/03, the EFA outperformed, so the major trend is up. EFA is the ETF representing the EAFE, the international developed country stock markets, ex the U.S. and Canada.
NASDAQ Composite price outperformed since 3/3/08. Therefore, one might argue that the 2-month Relative Strength trend has been improving. But longer term, the relative trends in larger time frames appear to be contradicting. The NASDAQ underperformed since 11/7/07 and, on 3/3/08, Relative Strength fell to a new 9-month low, confirming downtrends in larger time frames.
Growth Stock/Value Stock Relative Strength Ratio has been in an uptrend for the intermediate term, since 2/1/08. Long term, the Growth/Value ratio (IWF/IWD) has been in an uptrend since 8/8/06.
The Small Cap/Large Cap Relative Strength Ratio has been rising since 3/10/08. But the Relative Strength Ratio is still in a downtrend since the peak on 4/19/06, so the main long-term trend is Relatively Bearish for Small Caps.
Crude Oil June futures jumped to a new all-time high of 126.98. On 5/13/08, Oil rose to a new all-time high, confirming uptrends in all time frames. 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 has underperformed Crude Oil since 12/10/07.
Gold June futures fell steeply, breaking below the previous 5-day lows. The very short-term trend appears Bearish. In addition, price remains below the falling trendline from the 3/17/08 top, so Gold still may be in an intermediate-term Secondary Reaction, downside correction. Longer term, the 7-year trend is still Bullish.
Silver sharply underperformed Gold since 3/5/08. In addition, iShares Silver Trust (AMEX: SLV) has been relatively weak compared to Gold longer term, since 12/7/06. Finally, for the past 28 years, since 1/2/80, Silver has underperformed Gold.
The Gold Miners ETF (GDX) / Gold Bullion Relative Strength Ratio fell to another new low on 4/29/08. Longer-term, GDX significantly underperformed Gold since 10/31/07. Therefore, GDX trends are Bearish relative to Gold itself.
U.S. Treasury Bond prices fell sharply to close below the previous 3-day lows, confirming a short-term downturn. Bonds have traced out Secondary Reaction, intermediate-term downside correction phase since the price peak on 3/20/08. Bond prices benefit from fears of financial crisis, and they correct to the downside when financial crisis takes a back seat to some other news of the day.
The U.S. dollar consolidated with an Inside Range Day. The minor uptrend since the low on 4/22/08 seems questionable. The major trend of the dollar remains down.
The Art of Contrary Thinking: Traders need to be extremely nimble to keep up with rapid changes in the mass mood of late. The business and financial news has flipped from fear to hope and back again many times in recent weeks, creating an extremely choppy trading environment. Investors’ moods and stock volatility have jumped up and down abruptly with the latest “reports”. When mass psychology shifts so dramatically and unpredictably from hope to fear, without warning, risk control becomes more important than aggressive profit seeking. Stay flexible.
Sentiment/Contrary Opinion: There were 44.4% Bulls versus 32.3% Bears as of 5/7/08, according to the weekly Investors Intelligence survey of newsletter advisors. The Bull/Bear ratio rose to 1.37, up from 1.29 the previous week. The ratio’s 38-year range is 0.28 to 17.51, and the median is 1.47.
VIX “Fear Index”, now at 17.98, appears to be in a downtrend. Fear has been decreasing. VIX has been falling since its peak of 32.64 on 3/17/08. The all-time high was 45.74 on 10/8/98. The all-time low was 9.89 on 1/24/07. VIX is a market estimate of expected constant 30-day volatility, calculated by weighting S&P 500 Index CBOE option bid/ask quotes spanning a wide range of strike prices for the two nearest expiration dates.
VXN “Fear Index”, now at 21.50 and falling, appears to be in a downtrend. Fear is decreasing. VXN has been falling since its peak of 35.63 on 1/22/08. The all-time high was 114.23 on 10/8/98. The all-time low was 12.61 on 7/29/05. VXN measures NASDAQ Volatility using a method comparable to that used for VIX.
CBOE Put/Call Ratio is 0.60, which indicates relatively neutral sentiment. Its 4-year simple moving average and median are 0.62, and its 4-year range is 0.35 to 1.28.
ISEE Call/Put Ratio is 1.50, which indicates neutral sentiment. The ratio’s 4-year simple moving average is 1.50, 4-year median is 1.47, and 4-year range is 0.51 to 3.04.
Fundamentals: The 2003-2007 Bull Market was fed by abundant global liquidly, M&A, leveraged buyouts, corporate stock buybacks, and the net balance of positive earnings surprises. The unfolding fallout from the subprime credit market crisis has derailed that engine. Economic statistics and corporate earnings have been weakening.
A Secondary Reaction was signaled on 4/18/28, when the Dow-Jones Industrials and Transports both closed at 3-month highs. But the Primary Tide Major Trend still may be Bearish. The Dow Theory
confirmed a Primary Bear Market on 11/21/07 when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed below their respective closing price lows of August, 2007.To discover the next Resistance, traders probably will be watching how the market acts at the following levels for the Standard & Poor’s 500 cash index (1,403.04):
Potential Resistance
1,576.09, high of 10/11/2007
1,552.76, high of 10/31/2007
1,523.57, high of 12/11/2007
1,498.85, high of 12/26/2007
1,435.65, low of 12/18/2007
1,430.28, high of 1/8/08
1,422.72, high of 5/2/2008
Potential Support
1,383.07, low of 5/1/2008
1,324.35, low of 4/15/2008
1,256.98, low of 3/17/2008
1,224.54, low of 7/18/2006
1,219.29, low of 6/14/2006
1,214.45, low of 11/4/2005
1,201.07, low of 11/2/2005
1,168.20, low of 10/13/2005
1,163.23, high of 3/5/2004
1,159.86, low of 5/17/2005
1,153.64, low of 5/16/2005
1,146.18, low of 5/13/2005
1,139.14, low of 4/29/2005
1,136.37, low of 4/20/2005
Daily Rankings of Major ETFs, Ranked from Strongest to Weakest of the Day:
7.63% Internet B2B H, BHH
3.62% Networking, PXQ
2.30% Oil & Gas, PXJ
2.30% WilderHill Clean Energy PS, PBW
2.13% Metals & Mining SPDR, XME
2.01% Building & Construction, PKB
1.82% Growth Mid Cap Dynamic PS, PWJ
1.81% Energy Exploration & Prod, PXE
1.64% Energy SPDR, XLE
1.62% Internet H, HHH
1.62% Oil Services H, OIH
1.60% Oil, Crude, U.S. Oil Fund, USO
1.41% Taiwan Index, EWT
1.41% China 25 iS, FXI
1.28% China LargeCap Growth G D H USX PS, PGJ
1.26% Energy VIPERs, VDE
1.25% Ultra MidCap400 Double, MVV
1.21% Energy DJ, IYE
1.20% SmallCap S&P 600, IJR
1.19% Technology MS sT, MTK
1.18% Natural Resource iS GS, IGE
1.03% Basic Materials DJ US, IYM
1.00% Growth BARRA Small Cap 600, IJT
0.99% Software, IGV
0.99% Software, PSJ
0.98% Aerospace & Defense, PPA
0.96% MidCap Blend Core iS M, JKG
0.96% Austria Index, EWO
0.94% Growth SmallCap iS M, JKK
0.94% Telecommunications & Wireless, PTE
0.93% Growth MidCap Russell, IWP
0.92% Value SmallCap S&P 600 B, IJS
0.90% MidCap Growth iS M, JKH
0.86% Industrials VIPERs, VIS
0.84% MidCap S&P 400 SPDRs, MDY
0.82% Growth MidCap 400 B, IJK
0.81% Value SmallCap Dynamic PS, PWY
0.78% Short 200% Dow 30 PS, DXD
0.76% IPOs, First Tr IPOX-100, FPX
0.76% Extended Mkt VIPERs, VXF
0.75% SmallCap Core iS M, JKJ
0.75% Small Cap VIPERs, VB
0.74% Semiconductor SPDR, XSD
0.72% Industrial LargeCap Blend DJ US, IYJ
0.72% Growth SmallCap VIPERs, VBK
0.72% Growth Small Cap DJ, DSG
0.72% Mexico Index, EWW
0.68% MidCap VIPERs, VO
0.67% Transportation Av DJ, IYT
0.67% Industrial SPDR, XLI
0.66% MidCap Russell, IWR
0.65% Telecom H, TTH
0.64% Growth SmallCap R 2000, IWO
0.64% SmallCap PS Zacks, PZJ
0.63% Emerging 50 BLDRS, ADRE
0.62% Value MidCap S&P 400 B, IJJ
0.62% Lg Cap Growth PSD, PWB
0.62% OTC Dynamic PS, PWO
0.60% Microcap Russell, IWC
0.58% Value Line Timeliness MidCap Gr, PIV
0.58% Ultra QQQ Double, QLD
0.58% MidCap S&P 400 iS, IJH
0.58% Micro Cap Zachs, PZI
0.57% SmallCap Russell 2000, IWM
0.57% Value SmallCap S&P 600, RZV
0.56% Materials SPDR, XLB
0.56% Growth SmallCap Dynamic PS, PWT
0.56% Software H, SWH
0.55% Commodity Tracking, DBC
0.55% Leisure & Entertainment, PEJ
0.53% Real Estate US DJ, IYR
0.52% Value SmallCap Russell 2000, IWN
0.52% Hong Kong Index, EWH
0.48% Emerging Markets, EEM
0.48% Food & Beverage, PBJ
0.44% Insurance, PIC
0.44% Materials VIPERs, VAW
0.43% Semiconductor iS GS, IGW
0.42% Telecom DJ US, IYZ
0.41% Growth 1000 Russell, IWF
0.40% REIT VIPERs, VNQ
0.40% Consumer D. VIPERs, VCR
0.40% Value SmallCap VIPERS, VBR
0.39% Growth LargeCap NASDAQ Fidelity, ONEQ
0.39% Value SmallCap iS M, JKL
0.38% Growth Large Cap, ELG
0.37% Wilshire 5000 ST TM, TMW
0.37% Emerging VIPERs, VWO
0.37% Consumer Discretionary SPDR, XLY
0.36% Value MidCap Russell, IWS
0.36% Technology DJ US, IYW
0.36% REIT Wilshire, RWR
0.34% Growth LargeCap Russell 3000, IWZ
0.33% Consumer Non-Cyclical, IYK
0.33% Brazil Index, EWZ
0.32% Realty Cohen & Steers, ICF
0.32% Growth MidCap S&P 400, RFG
0.31% Asia 50 BLDRS, ADRA
0.29% Technology Global, IXN
0.26% Growth LargeCap NASDAQ 100, QQQQ
0.26% Biotech SPDR, XBI
0.24% Internet Infrastructure H, IIH
0.24% Growth LargeCap iS M, JKE
0.24% Telecom Services VIPERs, VOX
0.24% Growth S&P 500/BARRA, IVW
0.24% Growth VIPERs, VUG
0.23% Value MidCap Dynamic PS, PWP
0.23% Technology GS, IGM
0.21% Latin Am 40, ILF
0.21% LargeCap Blend S&P 1500 iS, ISI
0.21% Japan LargeCap Blend TOPIX 150, ITF
0.20% Short 100% Dow 30, DOG
0.18% Dividend Appreciation Vipers, VIG
0.16% Value MidCap iS M, JKI
0.15% LargeCap 1000 R, IWB
0.14% Global Titans, DGT
0.14% Info Tech VIPERs, VGT
0.13% LargeCap Blend S&P=Weight R, RSP
0.12% Semiconductor H, SMH
0.12% Value 40 Large Low P/E FT DB, FDV
0.12% LargeCap Blend Total Market DJ, IYY
0.12% Blend Total Market VIPERs, VTI
0.11% LargeCap Blend Russell 3000, IWV
0.10% Short 100% S&P 500, SH
0.09% Water Resources, PHO
0.08% Growth S&P 500, RPG
0.08% Japan Index, EWJ
0.06% Semiconductors, PSI
0.05% Ultra S&P500 Double, SSO
0.03% Networking, IGN
0.01% S&P 500 SPDRs LargeCap Blend, SPY
0.01% Utilities DJ, IDU
0.01% South Africa Index, EZA
0.00% Nanotech Lux, PXN
0.00% Technology SPDR, XLK
0.00% Telecommunications Global, IXP
-0.01% Energy Global, IXC
-0.02% LargeCap Blend NYSE Composite iS, NYC
-0.05% Broadband H, BDH
-0.05% Consumer Cyclical DJ, IYC
-0.05% S&P 500 iS LargeCap Blend, IVV
-0.05% Short 200% S&P 500 PS, SDS
-0.06% Dividend SPDR, SDY
-0.06% Retail, PMR
-0.07% Value LargeCap Russell 3000, IWW
-0.07% Value Small Cap DJ, DSV
-0.08% Utilities VIPERs, VPU
-0.08% LargeCap VIPERs, VV
-0.10% Consumer Staples VIPERs, VDC
-0.10% Value LargeCap Dynamic PS, PWV
-0.10% LargeCap Blend Dynamic PS, PWC
-0.10% Pacific VIPERs, VPL
-0.14% Value 1000 Russell, IWD
-0.15% Utilities SPDR, XLU
-0.15% Utilities, PUI
-0.15% LargeCap Blend Socially Responsible iS, KLD
-0.15% Switzerland Index, EWL
-0.16% Value VIPERs, VTV
-0.16% Value LargeCap Fundamental RAFI 1000, PRF
-0.17% Bond, 1-3 Year Treasury, SHY
-0.19% LargeCap Blend Core iS M, JKD
-0.20% Value Large Cap DJ, ELV
-0.22% LargeCap Blend S&P 100, OEF
-0.22% Value S&P 500 B, IVE
-0.23% Short 100% QQQ, PSQ
-0.27% DIAMONDS (DJIA), DIA
-0.27% Global 100, IOO
-0.27% Biotech & Genome, PBE
-0.28% Growth EAFE MSCI, EFG
-0.28% Pharmaceutical H, PPH
-0.30% France Index, EWQ
-0.30% LargeCap Rydex Rus Top 50, XLG
-0.30% Value MidCap S&P 400, RFV
-0.31% South Korea Index, EWY
-0.33% Value LargeCap iS M, JKF
-0.33% Value LargeCap NYSE 100 iS, NY
-0.34% EAFE Index, EFA
-0.36% Consumer Staples SPDR, XLP
-0.36% Internet Architecture H, IAH
-0.39% Short 100% MidCap 400, MYY
-0.41% Dividend Achievers PS, PFM
-0.41% Healthcare DJ, IYH
-0.42% Dividend DJ Select, DVY
-0.44% Pacific ex-Japan, EPP
-0.44% Dividend High Yield Equity PS, PEY
-0.44% Europe 100 BLDRS, ADRU
-0.45% Healthcare Global, IXJ
-0.46% Health Care VIPERs, VHT
-0.47% Homebuilders SPDR, XHB
-0.48% Utilities H, UTH
-0.49% Sweden Index, EWD
-0.50% Europe 350 S&P Index, IEV
-0.51% EMU Europe Index, EZU
-0.51% Value S&P 500, RPV
-0.52% Canada Index, EWC
-0.52% Hardware & Electronics, PHW
-0.53% Developed 100 BLDRS, ADRD
-0.53% Pharmaceuticals, PJP
-0.54% Germany Index, EWG
-0.54% Dividend Growth PS, PHJ
-0.57% Bond, Aggregate, AGG
-0.57% Bond, Corp, LQD
-0.58% Financials Global LargeCap Value, IXG
-0.65% Biotechnology, IBB
-0.66% Euro STOXX 50, FEZ
-0.67% European VIPERs, VGK
-0.72% Short 200% QQQ PS, QID
-0.74% Spain Index, EWP
-0.75% Bond, TIPS, TIP
-0.79% Ultra Dow30 Double, DDM
-0.81% Biotech H, BBH
-0.83% Bond, 10 Year Treasury, IEF
-0.85% Dividend International, PID
-0.86% Value EAFE MSCI, EFV
-0.88% Value LargeCap Euro STOXX 50 DJ, FEU
-0.88% Australia Index, EWA
-0.91% Financial SPDR, XLF
-0.92% Retail H, RTH
-0.93% Dividend Leaders, FDL
-0.95% Health Care SPDR, XLV
-0.95% Italy Index, EWI
-1.07% Financials VIPERs, VFH
-1.09% Singapore Index, EWS
-1.09% Bond, 20+ Years Treasury, TLT
-1.11% Financial DJ US, IYF
-1.14% Netherlands Index, EWN
-1.16% United Kingdom Index, EWU
-1.41% Belgium Index, EWK
-1.45% Capital Markets KWB ST, KCE
-1.60% Short 200% MidCap 400 PS, MZZ
-1.84% Gold Shares S.T., GLD
-1.84% Malaysia Index, EWM
-1.86% Bank Regional H, RKH
-1.87% Financial Services DJ, IYG
-2.61% Silver Trust iS, SLV
