The Dow-Jones Industrial Average rose above its closing price highs of the previous 4-years on 10/5/12, but the Dow-Jones Transportation Average remains relatively weak, closer to its 2012 low than it to its 2012 high, thereby demonstrating non confirmation and bearish divergence.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell back down below its 50-day SMA on 10/5/12, thereby turning systematically bearish again.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) fell below its 50-day SMA on 10/5/12, turning systematically neutral.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) 50-day SMA has remained below its 200-day SMA every day since 6/27/12, but the 50-200 spread is narrowing and a bullish crossover is probable in days ahead.
Silver/Gold ETFs Ratio (SLV/GLD) 50-200 SMA spread has been narrowing since 8/22/12, and a bullish crossover is probable in days ahead.
Silver, iShares Silver Trust ETF (SLV) turned systematically bullish on 10/1/12 when its price 50-day SMA crossed above the 200-day SMA.
Gold, SPDR Gold Shares ETF (GLD) rose above its highs of the previous 11 months on 10/4/12, thereby confirming its preexisting major uptrend.
The S&P 500 (SPX: 1,460.93) fell 0.47 points or 0.03% on Friday, after challenging its September high. SPX may have found resistance near the same level it peaked at 3 weeks ago.
On-Balance Volume for the SPX turned down after recovering little more than half of its loss from its minor high on 9/14/12, thereby demonstrating relative weakness and bearish divergence. OBV fell to its lowest level in 7 weeks on 9/28/12 and remains far below its highs for the year, 2012, thereby demonstrating major relative weakness and bearish divergence compared to the SPX price index.
NYSE volume fell 11% to a level 15% below its 200-day SMA on Friday. The NYSE volume 200-day SMA fell to its lowest level in 13 years on 10/5/12. Average volume has been trending down for more than 6 years, since 6/30/2006, reflecting diminishing enthusiasm for stocks.
NYSE Cumulative Volume of Advancing Stocks minus Volume of Declining Stocks turned down from a level below its March high, thereby demonstrating relative weakness and bearish divergence. Clearly, volume has not been confirming the price up move.
It takes volume to push prices up. After the shorts have been forced to cover and the longs have had their fill of buying, in the absence of a fresh source of demand, stocks fall of their own weight.
The technical condition of the stock market does not support the excessive optimism of the bullish majority of stock investors and traders. Fed and ECB plans to buy bonds in unlimited quantities (with fiat currencies printed out of thin air and backed by nothing but a theory and a hope) do not guarantee that stock prices will continue to rise, especially now that the news is out. Typically, action is followed by reaction, and so a downside correction seems overdue. Choosing safety over risk still appears to be the most reasonable approach for conservative traders and investors.
*For extensive coverage of major global markets with illustrative charts, take a free trial for my weekly report —
click here.
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Hedge funds and equity mutual funds both lost money last year, 2011, and some are down again this year as well.
Meanwhile, one money manager made gains for 6 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) 50-day SMA fell below its 200-day SMA on 10/2/12, thereby turning systematically bearish. UUP closed below its 50-day SMA on 8/3/12 and fell below its 200-day SMA on 8/31/12. UUP’s Support 21.57, 21.07, and 20.84. Resistance 21.94, 22.36, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) turned systematically neutral on 9/17/12 when price crossed below its 50-day SMA. DBA remains above its 200-day SMA, and its 50-day SMA remains above its 200-day SMA.
Crude Oil, United States Oil ETF (USO) turned systematically bearish on 9/19/12, when price fell below its 50-day SMA. USO fell below its 200-day SMA on 9/17/12. USO’s 50-day SMA remains below its 200-day SMA. Support 32.98, 32.45, 31.40, 29.02, 26.28, and 22.74. Resistance 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) rose above its highs of the previous 11 months on 10/4/12. GLD turned systematically bullish on 9/20/12, when its 50-day SMA rose above its 200-day SMA. GLD price rose above its highs of the previous 7 months on 10/1/12, rose above its 200-day SMA on 8/22/12, and rose above its 50-day SMA on 8/3/12. Support: 168.34, 166.30, 159.56, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 174.00, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) rose above its 50-day SMA on 8/16/12, thereby turning systematically neutral. GDX/GLD rose above its 200-day SMA on 9/13/12 . The GDX/GLD 50-day SMA has remained below its 200-day SMA every day since 2/22/11, although that 50-200 spread has been narrowing since 9/5/12.
Silver, iShares Silver Trust ETF (SLV) turned systematically bullish on 10/1/12 when its price 50-day SMA crossed above the 200-day SMA. Support 32.40, 31.46, 29.28, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 34.08, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) rose above its 50-day SMA on 8/16/12, thereby turning systematically neutral. SLV/GLD rose above its 200-day SMA on 8/31/12. SLV/GLD remains systematically neutral because its 50-day SMA has stayed below its 200-day SMA every day since 8/30/11. The 50-200 SMA spread has been narrowing since 8/22/12, however, and a bullish crossover is probable in days ahead.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price rose above its 50-day SMA on 8/21/12, thereby turning systematically neutral. Price rose above its 200-day SMA on 9/7/12. JJC remains systematically neutral because its 50-day SMA has remained below its 200-day SMA every day since 5/31/12. The 50-200 SMA spread has been narrowing since 8/8/12, although the spread is not tight and a crossover is not likely in days ahead. Dr. Copper” is 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
7.21% , AVP , AVON
2.50% , TBT , 200% Short US T Bond, TBT
0.96% , ADRA , Asia 50 BLDRS, ADRA
0.84% , EZU , EMU Europe Index, EZU
0.85% , FEZ , Euro STOXX 50, FEZ
2.83% , EMN , EASTMAN CHEM
3.11% , LPX , LOUISIANA PAC
3.11% , SEE , SEALED AIR
0.84% , RYAAY , Ryanair Holdings plc
2.06% , BC , BRUNSWICK
1.83% , BLK , BlackRock Inc.
1.43% , EWI , Italy Index, EWI
1.65% , PRU , PRUDENTIAL FINL
0.98% , EWP , Spain Index, EWP
1.67% , WFM.O , Whole Foods Market Inc
2.65% , LOW , LOWES
0.74% , EWQ , France Index, EWQ
0.63% , IYZ , Telecom DJ US, IYZ
0.27% , JKL , Value SmallCap iS M, JKL
0.15% , ACWX , Global ex US ACWI iS, ACWX
0.88% , BIDU , Baidu, Inc., BIDU
0.29% , IYK , Consumer Non-Cyclical, IYK
2.17% , HIG , HARTFORD FINL
1.22% , SCHW.K , CHARLES SCHWAB, SCHW.O
2.60% , NYT , NY TIMES STK A
0.77% , WPI , WATSON PHARM
0.45% , XBI , Biotech SPDR, XBI
1.48% , MDT , MEDTRONIC
1.10% , XHB , Homebuilders SPDR, XHB
0.62% , PSQ , Short 100% QQQ, PSQ
0.47% , CCE , COCA COLA ENTER
0.67% , WHR , WHIRLPOOL
0.62% , DPS , Dr Pepper Snapple Group
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.15% , MYY , Short 100% MidCap 400, MYY
-2.40% , MWV , MEADWESTVACO
-0.39% , FPX , IPOs, First Tr IPOX-100, FPX
-3.35% , EZA , South Africa Index, EZA
-0.76% , IYW , Technology DJ US, IYW
-1.17% , SJM , J. M. Smucker
-2.24% , ININ , Interactive Intelligence ININ
-7.32% , ODP , OFFICE DEPOT
-2.21% , VLO , VALERO ENERGY
-4.13% , CTXS , CITRIX SYSTEMS
-2.13% , AAPL , APPLE COMPUTER
-0.21% , PSJ , Software, PSJ
-2.14% , JNY , JONES APPAREL
-1.45% , NTAP , NETWK APPLIANCE
-1.12% , EIS , Israel MSCI iS, EIS
-0.29% , EFG , Growth EAFE MSCI, EFG
-1.43% , LUV , SOUTHWEST AIRLS
-0.86% , BSX , BOSTON SCIENT
-0.45% , IEF , Bond, 10 Year Treasury, IEF
-2.12% , IGT , INTL GAME TECH
-0.71% , YUM , YUM BRANDS
-1.21% , IR , INGER RAND
-3.06% , SVU , SUPERVALU
-0.75% , NTRS , NORTHERN TRUST
-1.01% , LNC , LINCOLN NATL
-0.28% , IWC , Microcap Russell, IWC
-1.30% , TLT , Bond, 20+ Years Treasury, TLT
-1.44% , RSH , RADIOSHACK
-0.48% , HSP , HOSPIRA
-1.58% , ORCL , ORACLE
-1.32% , DVN , DEVON ENERGY
-0.35% , IJT , Growth BARRA Small Cap 600, IJT
-0.87% , LAMR , Lamar Advertising Company
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.43% Italy Index, EWI
1.19% Capital Markets KWB ST, KCE
1.10% Homebuilders SPDR, XHB
0.98% Spain Index, EWP
0.94% Netherlands Index, EWN
0.88% Mexico Index, EWW
0.84% EMU Europe Index, EZU
0.74% France Index, EWQ
0.65% Germany Index, EWG
0.63% Telecom DJ US, IYZ
0.61% China 25 iS, FXI
0.59% Transportation Av DJ, IYT
0.56% Chile MSCI iS, ECH
0.55% Dividend SPDR, SDY
0.51% Dividend High Yield Equity PS, PEY
0.49% Materials SPDR, XLB
0.45% Biotech SPDR, XBI
0.43% Real Estate US DJ iS, IYR
0.41% Indonesia MV, IDX
0.39% Sweden Index, EWD
0.38% Consumer Staples SPDR, XLP
0.36% Water Resources, PHO
0.32% DIAMONDS (DJIA), DIA
0.32% Industrial SPDR, XLI
0.29% Consumer Discretionary SPDR, XLY
0.28% Dividend Appreciation Vipers, VIG
0.28% Basic Materials DJ US, IYM
0.28% Latin Am 40, ILF
0.27% Hong Kong Index, EWH
0.27% Financial Preferred, PGF
0.24% Switzerland Index, EWL
0.23% Belgium Index, EWK
0.22% Realty Cohen & Steers, ICF
0.22% European VIPERs, VGK
0.21% Europe 350 S&P Index, IEV
0.21% Dividend U.S. DJ iS, DVY
0.19% Austria Index, EWO
0.18% South Korea Index, EWY
0.18% SmallCap Blend EAFE MSCI iS, SCZ
0.18% Preferred Stock iS, PFF
0.17% REIT Wilshire, RWR
0.16% MidCap Value S&P 400 iS, IJJ
0.15% Dividend ex-U.S. DJ iS, IDV
0.15% Value VIPERs, VTV
0.15% Global ex U.S. LargeCap Blend, ACWX
0.15% Taiwan Index, EWT
0.13% Foreign LargeCap EAFE MSCI iS, EFA
0.13% Global LargeCap Blend MSCI iS, ACWI
0.12% REIT VIPERs, VNQ
0.10% Malaysia Index, EWM
0.10% Frontier Markets Guggenheim , FRN
0.10% Health Care SPDR, XLV
0.10% LargeCap Value Russell 1000 iS, IWD
0.09% Global 100, IOO
0.08% LargeCap Blend S&P=Weight R, RSP
0.07% Financial DJ US, IYF
0.06% Financials VIPERs, VFH
0.06% LargeCap Blend Russell 3000 iS, IWV
0.05% Japan Index, EWJ
0.05% Bond, High-Yield Junk, JNK
0.05% Growth MidCap Russell, IWP
0.05% Value LargeCap Dynamic PS, PWV
0.04% LargeCap Value S&P 500 iS, IVE
0.04% MidCap Blend S&P 400 iS, IJH
0.03% Bond, Emerg Mkt JPM iS, EMB
0.03% SmallCap Value S&P 600 iS, IJS
0.02% LargeCap Blend Russell 1000 iS, IWB
0.02% Value MidCap Russell, IWS
0.02% MidCap Russell, IWR
0.01% Emerging Markets MSCI iS, EEM
0.01% S&P 500 SPDRs LargeCap Blend, SPY
0.00% Value SmallCap VIPERS, VBR
0.00% Singapore Index, EWS
0.00% MidCap S&P 400 SPDRs, MDY
0.00% Dividend International, PID
-0.01% Bond Treasury Short-Term iS, SHV
-0.02% Value EAFE MSCI, EFV
-0.03% Blend Total Market VIPERs, VTI
-0.03% Bear, Short S&P 500, SH
-0.03% LargeCap VIPERs, VV
-0.03% Financial SPDR, XLF
-0.04% LargeCap Growth Russell 1000 iS, IWF
-0.05% Bond, 1-3 Year Treasury, SHY
-0.05% Bond Ex-US Treas, BWX
-0.05% Energy Global, IXC
-0.05% Bond, High Yield Corp iBoxx iS, HYG
-0.07% SmallCap Value Russell 2000 iS, IWN
-0.07% Emerging VIPERs, VWO
-0.07% Bond, Muni S&P ATM-Free iS, MUB
-0.07% LargeCap Blend S&P 500 iS, IVV
-0.08% Australia Index, EWA
-0.09% LargeCap Blend S&P 100, OEF
-0.11% China LargeCap Growth G D H USX PS, PGJ
-0.11% Small Cap VIPERs, VB
-0.12% Semiconductor iS IGW, SOXX
-0.12% SmallCap Blend Russell 2000 iS, IWM
-0.12% MidCap Growth S&P 400 iS, IJK
-0.14% Financial Services DJ, IYG
-0.14% Utilities VIPERs, VPU
-0.14% LargeCap Growth S&P 500 iS, IVW
-0.16% Bond, Long-Term Corp iBoxx iS, LQD
-0.16% Pacific VIPERs, VPL
-0.16% Utilities SPDR, XLU
-0.18% Emerging 50 BLDRS, ADRE
-0.18% Growth VIPERs, VUG
-0.18% Pacific ex-Japan, EPP
-0.18% SmallCap Blend S&P 600 iS, IJR
-0.19% Thailand MSCI iS, THD
-0.20% Bond, TIPS U.S. Treasury iS, TIP
-0.21% Bond, Intermediate US Aggregate iS, AGG
-0.21% Canada Index, EWC
-0.21% Semiconductor SPDR, XSD
-0.23% Turkey MSCI iS, TUR
-0.24% Energy DJ, IYE
-0.24% Energy SPDR, XLE
-0.26% Brazil Index, EWZ
-0.26% Growth SmallCap VIPERs, VBK
-0.27% SmallCap Growth Russell 2000 iS, IWO
-0.27% Russia MV, RSX
-0.27% Metals & Mining SPDR, XME
-0.28% Microcap Russell, IWC
-0.29% Growth EAFE MSCI, EFG
-0.30% Energy VIPERs, VDE
-0.34% United Kingdom Index, EWU
-0.35% SmallCap Growth S&P 600 iS, IJT
-0.40% Energy & Nat Res iS GS, IGE
-0.45% Bond, 10 Year Treasury, IEF
-0.52% Technology SPDR, XLK
-0.52% Commodity Tracking, DBC
-0.53% QQQ Nasdaq 100 Trust, QQQ
-0.57% Gold Shares S.T., GLD
-0.58% Agriculture DB PS, DBA
-0.63% Networking, IGN
-0.66% Info Tech VIPERs, VGT
-0.73% WilderHill Clean Energy PS, PBW
-0.76% Technology DJ US, IYW
-1.20% India Earnings WTree, EPI
-1.27% Oil Fund PowerShares, DBO
-1.30% Bond, 20+ Years Treasury, TLT
-1.41% Silver Trust iS, SLV
-1.74% Oil, Crude, U.S. Oil Fund, USO
-1.93% India PS, PIN
-3.35% South Africa Index, EZA
