The Dow Theory confirmed a Primary Tide Bull Market on 1/18/13, when both Dow-Jones Industrial and Transportation Averages closed above their closing price highs of the previous 5 years.
The S&P 500 (SPX: 1,4785.98) rose 0.95% last week and closed above its closing price levels of the previous 5 years. That higher closing price high was confirmed by some but not all stock market indicators.
Most price momentum oscillators did not make new highs, suggesting continuing momentum divergence. For example, popular momentum oscillators such as RSI(14) and MACD(12,26,9) remain below their 2011-2012 highs.
On-Balance Volume based on the S&P 500 rose to challenge its 2012 highs. The Cumulative Daily Advancing-Declining Volume Line also rose to challenge its 2012 highs. This may mark a critical juncture, because volume ought to be making new 5-year highs in order to confirm the higher highs of the price indexes.
The percentage of stocks in the S&P 500 Composite Price Index above their own 200-day SMAs rose last week but is still below previous highs in 2012 and 2011, indicating diminishing upside momentum for the uptrend that started nearly 4 years ago.
The percentage of S&P 500 stocks that are in Bullish Point-and-Figure Chart uptrends rose above 78%, up from 58% in November, but still down from 79% in September, and down from a peak of 85% in February. The Bullish Percentage is not confirming higher highs in the S&P 500 Composite Price Index.
The Art of Contrary Thinking calls for questioning high and rising optimism. Investor sentiment data indicated high degrees of optimism and bullish complacency in recent weeks, matching or exceeding extremes in September, 2012, when many stock price indexes hit peaks and reversed to the downside. Elevated levels of optimism are bearish because when the majority is extremely bullish, investors are already fully invested in the market. Once everyone who is going to buy has already bought, stocks are vulnerable to a downside shakeout. The pendulum of emotion tends to swing too far in one direction, but the market mood always reverts to the mean–eventually. Pinpoint accuracy is not guaranteed.
Our clients’ separately managed accounts made gains in 6 of the past 7 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).
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VIX Fear Index collapsed to 12.29 on 1/18/13, its lowest level in 5 years, indicating a remarkable level of bullish complacency. 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.
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
The S&P 500 Composite Potential Support
1474.51, high of 9/14/2012
1463.76, low of 1/15/13
1451.64, low on 1/8/13
1448.00, high of 12/19/2012
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1438.59, high of 12/12/2012
1434.27, high of 11/2/2012
1432.82, low of 12/20/2012
1430.53, low of 9/26/2012
1426.76, low of 12/12/2012
1425.53, low of 10/12/2012
1425.48, Fibonacci 23.6% of June-Sept ’12 range
1424.41, Fibonacci 61.8% of Sept-Nov ’12 range
1423.73, high of 12/3/2012
1422.76, 50-day SMA
1422.58, low of 12/21/2012
1422.38, high of 4/2/2012
1422.06, low of 10/22/2012
1421.12, high of 10/25/2012
1420.34, high of 12/7/2012
1419.70, high of 11/29/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
1409.16, high of 11/23/2012
1403.28, low of 10/26/12
1401.58, low of 12/28/12
1398.11, low of 12/31/2012
1397.68, low of 11/26/2012
1396.56, low of 9/4/2012
1395.14, Fibonacci 38.2% of June-Sept 2012 range
1394.45, 200-day SMA
1391.04, low of 8/6/2012
1388.71, low of 5/3/2012
1385.43, low of 11/28/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1370.62, Fibonacci 50.0% of June-Sept 2012 range
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
1346.11, Fibonacci 61.8% of June-Sept 2012 range
1343.35, low of 11/16/2012
1340.03, low of 3/6/2012
1335.52, high of 6/11/2012
1334.93, high of 5/31/2012
1329.24, low of 7/24/2012
1329.05, high of 6/7/2012
1328.49, high of 5/22/2012
1325.41, low of 7/12/2012
1311.20, Fibonacci 78.6% of June-Sept 2012 range
1306.62, low of 6/12/2012
1291.98, low of 5/18/2012
1266.74, low of 6/4/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1257.58, Fibonacci 61.8% of 2011 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
1228.74, Fibonacci 61.8% of 2007-2009 range
1226.64, low of 11/9/2011
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1202.37, low of 12/19/2011
1158.66, low of 11/25/2011
1121.44, Fibonacci 50% of 2007-2009 range
1074.77, low of 10/4/2011
1014.14, Fibonacci 38.2% of 2007-2009 range
1010.91, low of 7/1/2010
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
881.38, Fibonacci 23.6% of 2007-2009 range
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
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Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) price fell below its 50-day SMA on 12/12/12, turning systematically neutral. Support 117.36, 115.69, 114.82, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance: 123.71, 126.08, 127.19, 127.72, 130.69, and 132.22.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) fell below its 50-day SMA on 12/12/12, thereby turning systematically neutral again. IEF whipsawed back down below its 200-day SMA again on 1/2/13. IEF’s 50-day SMA has remained above the 200-day SMA every day since 6/21/11. Support 106.21, 105.84, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance: 108.07, 108.15, 109.20, 109.32, and 109.89.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) 50-day SMA crossed above the 200-day SMA on 1/14/13, thereby turning a systematically bullish.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) turned systematically bullish again on 1/17/13 when it whipsawed back above its 50-day SMA. TIP/IEF rose above its 200-day SMA on 9/27/12, and the 50-day SMA rose above the 200-day SMA on 10/10/12.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) turned systematically bearish again on 1/10/13 when it whipsawed back down below its 50-day SMA and a 6-months long downtrend line. UUP fell below its 200-day SMA on 8/31/12, and the 50-day SMA fell below the 200-day SMA on 10/2/12. Support 21.57, 21.07, and 20.84. Resistance 22.05, 22.30, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price turned systematically bearish on 1/11/13 when the 50-day SMA crossed down below the 200-day SMA.
Crude Oil, United States Oil ETF (USO) price turned systematically neutral on 12/26/12, when price rose above its 50-day SMA. The 50-day SMA has remained below its 200-day SMA consistently every day since 6/7/12. Support 33.57, 31.00, 29.02, 26.28, and 22.74. Resistance 34.96, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) price turned systematically neutral on 11/27/12, when it fell below its 50-day SMA. Support: 158.39, 157.40, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 164.40, 166.94, 170.01, 174.07, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) turned systematically bearish on 12/27/12, when the 50-day SMA crossed below the 200-day SMA.
Silver, iShares Silver Trust ETF (SLV) price turned systematically neutral on 12/13/12 when it fell below its 50-day SMA. Support 28.61, 27.97, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 31.36, 32.72, 33.31, 34.08, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) turned systematically bullish on 1/18/13 when it rose above its 50-day SMA.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) has been consolidating losses in Triangle Consolidation chart pattern trading range between 38.99 and 51.41 for more than a year, since October 2011. “Dr. Copper” is widely accepted as one of the better indicators of investor confidence (or lack thereof) in the global industrial economy.
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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 later revealed to be deal stocks 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
7.86% , MS , MORGAN STANLEY
2.34% , ERIC.O , LM Ericsson Telephone Company
3.67% , BHI , BAKER HUGHES
6.24% , RIMM , RESEARCH IN MOTION LTD
4.02% , JCP , JC PENNEY
4.27% , SLB , SCHLUMBERGER
5.92% , STT , STATE STREET
1.40% , DGX , QUEST DIAG
2.65% , EFX , EQUIFAX
2.84% , LM , LEGG MASON
3.21% , SWY , SAFEWAY
9.93% , ODP , OFFICE DEPOT
2.30% , TROW , T ROWE PRICE GP
2.46% , BMC.O , BMC SOFTWARE
1.04% , BMS , BEMIS
3.47% , GE , GENERAL ELECTRIC
1.67% , MSI , Motorola Solutions, MSI
0.85% , CINF , CINCINNATI FIN
0.73% , FRN , Frontier Markets Guggenheim , FRN
0.74% , IYZ , Telecom DJ US, IYZ
2.56% , PH , PARKER HANNIFIN
3.31% , HAL , HALLIBURTON
2.18% , HP , Helmerich & Payne HP
3.98% , NBR , NABORS
1.50% , NFLX , Netflix, NFLX
0.37% , TLH , Bond 10-20 Year US Treas, TLH
2.02% , AMAT , APPLIED MATERIAL
0.86% , RHI , ROBERT HALF
2.01% , CAT , CATERPILLAR
1.38% , ECH , Chile MSCI iS, ECH
1.89% , NUE , NUCOR
1.81% , MTG , MGIC INVESTMENT
0.60% , IYR , Real Estate US DJ, IYR
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-7.47% , COF , CAPITAL ONE FNCL
-10.22% , AMD , ADV MICRO DEV
-2.97% , JCI , JOHNSON CONTROLS
-1.83% , BEN , FRANKLIN RSC
-2.92% , FHN , First Horizon National
-1.93% , COL , ROCKWELL COLLINS
-0.24% , IGN , Networking, IGN
-0.94% , PBI , PITNEY BOWES
-4.74% , WHR , WHIRLPOOL
-2.22% , AMGN , AMGEN
-6.31% , INTC , INTEL
-2.15% , EL , Estee Lauder
-1.58% , AXP , AMERICAN EXPRESS
-0.17% , EPU , Peru MSCI iS, EPU
-1.29% , RHT , Red Hat Inc.
-2.11% , VFC , VF
-0.91% , ISIL , INTERSIL CORP
-0.19% , AVP , AVON
-0.21% , IGV , Software, IGV
-1.02% , FMCN , Focus Media, FMCN
-0.94% , HAR , Harman International
-1.40% , CTXS , CITRIX SYSTEMS
-0.82% , LMT , LOCKHEED MARTIN
-1.08% , PFE , PFIZER
-0.37% , EXPD , Expeditors International WA
-0.96% , GOOG , Google
-0.70% , QCOM , QUALCOMM
-0.26% , IXN , Technology Global, IXN
-1.45% , STI , SUNTRUST BANKS
-2.65% , RFMD , RF Micro Devices Inc
-2.14% , CHKP , Check Point Software Technologies Ltd
-1.29% , FCX , FREEPRT MCMORAN STK B
-0.92% , BRCM , BROADCOM STK A
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.55% India PS, PIN
1.38% India Earnings WTree, EPI
1.38% Chile MSCI iS, ECH
1.18% Indonesia MV, IDX
1.04% Capital Markets KWB ST, KCE
0.99% Energy SPDR, XLE
0.97% Thailand MSCI iS, THD
0.86% Russia MV, RSX
0.86% Energy DJ, IYE
0.83% Energy VIPERs, VDE
0.82% China 25 iS, FXI
0.81% Industrial SPDR, XLI
0.79% Utilities SPDR, XLU
0.77% Bond, 20+ Years Treasury, TLT
0.74% Telecom DJ US, IYZ
0.74% Utilities VIPERs, VPU
0.73% Energy & Nat Res iS GS, IGE
0.73% Frontier Markets Guggenheim , FRN
0.67% Materials SPDR, XLB
0.65% Commodity Tracking, DBC
0.62% Metals & Mining SPDR, XME
0.60% China LargeCap Growth G D H USX PS, PGJ
0.60% Real Estate US DJ iS, IYR
0.60% Water Resources, PHO
0.53% Realty Cohen & Steers, ICF
0.51% LargeCap Value S&P 500 iS, IVE
0.46% SmallCap Growth S&P 600 iS, IJT
0.46% Dividend SPDR, SDY
0.46% Silver Trust iS, SLV
0.45% Energy Global, IXC
0.43% REIT VIPERs, VNQ
0.43% REIT Wilshire, RWR
0.42% MidCap Value S&P 400 iS, IJJ
0.42% Basic Materials DJ US, IYM
0.42% Dividend Appreciation Vipers, VIG
0.41% Consumer Staples SPDR, XLP
0.40% Belgium Index, EWK
0.39% SmallCap Value S&P 600 iS, IJS
0.39% Dividend U.S. DJ iS, DVY
0.37% Taiwan Index, EWT
0.37% Oil Fund PowerShares, DBO
0.37% SmallCap Blend S&P 600 iS, IJR
0.36% Sweden Index, EWD
0.36% Japan Index, EWJ
0.35% Preferred Stock iS, PFF
0.33% Health Care SPDR, XLV
0.33% SmallCap Growth Russell 2000 iS, IWO
0.33% Bond, Emerg Mkt JPM iS, EMB
0.32% LargeCap Blend Russell 1000 iS, IWB
0.32% LargeCap Value Russell 1000 iS, IWD
0.30% Value MidCap Russell, IWS
0.30% Value SmallCap VIPERS, VBR
0.30% LargeCap VIPERs, VV
0.29% Value VIPERs, VTV
0.29% SmallCap Value Russell 2000 iS, IWN
0.29% Oil, Crude, U.S. Oil Fund, USO
0.29% LargeCap Blend S&P=Weight R, RSP
0.28% LargeCap Blend Russell 3000 iS, IWV
0.28% LargeCap Blend S&P 100, OEF
0.28% SmallCap Blend Russell 2000 iS, IWM
0.28% Bond, 10 Year Treasury, IEF
0.28% Blend Total Market VIPERs, VTI
0.27% Small Cap VIPERs, VB
0.26% LargeCap Blend S&P 500 iS, IVV
0.26% Dividend High Yield Equity PS, PEY
0.26% Growth SmallCap VIPERs, VBK
0.24% Growth VIPERs, VUG
0.24% Emerging 50 BLDRS, ADRE
0.23% MidCap Russell, IWR
0.22% S&P 500 SPDRs LargeCap Blend, SPY
0.22% Emerging Markets MSCI iS, EEM
0.21% Homebuilders SPDR, XHB
0.21% MidCap S&P 400 SPDRs, MDY
0.20% Hong Kong Index, EWH
0.20% Latin Am 40, ILF
0.19% DIAMONDS (DJIA), DIA
0.18% Growth MidCap Russell, IWP
0.18% Dividend International, PID
0.18% LargeCap Growth Russell 1000 iS, IWF
0.17% Bond, Muni S&P ATM-Free iS, MUB
0.17% Pacific VIPERs, VPL
0.17% Bond, TIPS U.S. Treasury iS, TIP
0.16% Financial Preferred, PGF
0.15% MidCap Blend S&P 400 iS, IJH
0.15% Transportation Av DJ, IYT
0.15% Bond, High-Yield Junk, JNK
0.14% Agriculture DB PS, DBA
0.14% Global LargeCap Blend MSCI iS, ACWI
0.14% LargeCap Growth S&P 500 iS, IVW
0.14% Financials VIPERs, VFH
0.14% Global ex U.S. LargeCap Blend, ACWX
0.14% Bond, High Yield Corp iBoxx iS, HYG
0.12% Consumer Discretionary SPDR, XLY
0.12% Bond, Intermediate US Aggregate iS, AGG
0.12% Financial SPDR, XLF
0.11% Emerging VIPERs, VWO
0.10% Canada Index, EWC
0.10% Bond, Long-Term Corp iBoxx iS, LQD
0.06% Financial DJ US, IYF
0.06% Microcap Russell, IWC
0.05% MidCap Growth S&P 400 iS, IJK
0.04% Biotech SPDR, XBI
0.04% France Index, EWQ
0.04% Value EAFE MSCI, EFV
0.01% Bond Treasury Short-Term iS, SHV
0.00% WilderHill Clean Energy PS, PBW
0.00% Bond, 1-3 Year Treasury, SHY
-0.02% Brazil Index, EWZ
-0.04% Value LargeCap Dynamic PS, PWV
-0.05% Financial Services DJ, IYG
-0.07% Italy Index, EWI
-0.07% SmallCap Blend EAFE MSCI iS, SCZ
-0.10% Foreign LargeCap EAFE MSCI iS, EFA
-0.11% Global 100, IOO
-0.12% Pacific ex-Japan, EPP
-0.14% Technology SPDR, XLK
-0.15% Singapore Index, EWS
-0.16% Gold Shares S.T., GLD
-0.17% United Kingdom Index, EWU
-0.17% Dividend ex-U.S. DJ iS, IDV
-0.18% Mexico Index, EWW
-0.18% Growth EAFE MSCI, EFG
-0.19% Australia Index, EWA
-0.22% European VIPERs, VGK
-0.22% Europe 350 S&P Index, IEV
-0.22% QQQ Nasdaq 100 Trust, QQQ
-0.24% Bond Ex-US Treas, BWX
-0.24% Networking, IGN
-0.28% Netherlands Index, EWN
-0.31% Bear, Short S&P 500, SH
-0.32% EMU Europe Index, EZU
-0.34% Info Tech VIPERs, VGT
-0.37% Spain Index, EWP
-0.37% Technology DJ US, IYW
-0.41% Turkey MSCI iS, TUR
-0.43% Semiconductor iS IGW, SOXX
-0.43% South Korea Index, EWY
-0.44% Germany Index, EWG
-0.47% Austria Index, EWO
-0.60% Switzerland Index, EWL
-0.65% Malaysia Index, EWM
-0.84% South Africa Index, EZA
-1.09% Semiconductor SPDR, XSD
