Industrial (XLI) stock sector ETF Relative Strength Ratio (XLI/SPY) whipsawed back up above its 50-day SMA on 10/18/13, thereby turning systematically bullish (from neutral).
The Dow Theory reconfirmed a Primary Tide Bull Market a month ago, on 9/18/13, when the Dow-Jones Industrial Average and the Dow-Jones Transportation Average both closed at new closing price highs. The day-to-day Minor Ripple trend has turned uncertain since then, however. Although the Transportation Average rose to a new high on 10/18/13, the Industrial Average remained 1.77% below its high of 9/18/13. And so, the Industrial Average is diverging bearishly and not confirming the bullish trend of the Transportation Average.
The S&P 500 Composite Index (SPX: 1,744.50, up 0.65%) absolute price opened higher on Friday and added to overnight gains. SPX closed above the open, above the midpoint of the day’s high-low range, fairly near its highest level of the day, and at its highest closing price level ever.
Momentum oscillators RSI and MACD based on the S&P 500 have been rising with the SPX price over the past 8 trading days but remain below previous highs for the year.
A new all-time high clearly means that S&P 500 trends in all time frames are pointing higher. The SPX made higher highs in July, August, and September, however, only to slip back below the May high each time. Therefore, another new high on a reflexive relief rally might not be a signal for clear sailing ahead. The market may be stalling out over the past few months due to concerns other than the obvious US political crisis that has dominated the news headlines. A new high quickly followed by another sharp downside reversal like September’s might suggest trend exhaustion and is something we should watch out for. Momentum divergences, low trading volume, excessive bullish sentiment, and prospects for continuing dysfunctional political games remain significant obstacles to a sustainable upside trend.
NYSE total volume rose 6% to a level 1% below its 200-day SMA. Generally, rising volume confirms the direction (up or down) of a price move, but falling volume may indicate diminishing power behind a price trend, which can suggest a price reversal ahead.
Both the Cumulative Up-Down Volume Line and the Cumulative Daily Advance-Decline Line on the NYSE remain systematically bullish, above 50- and 200-day day SMAs. Although the Advance-Decline Line rose above previous highs last week, the Up-Down Volume Line continues to lag the S&P 500 Composite Stock Price Index. Specifically, when the S&P 500 closed above its all-time price highs on Friday 10/18/13, this Up-Down Volume Line failed to rise above its all-time highs. This was another demonstration of bearish divergence, which does not support probabilities of a sustainable stock market uptrend.
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NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) rose to its highest level in 11 months on 10/1/13. QQQ/SPY turned systematically bullish on 8/26/13, when the 50-day SMA crossed above the 200-day SMA. Absolute price whipsawed back up above its 50-day SMA on 10/10/13, thereby turning systematically bullish (from neutral).
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) whipsawed back up above its 50-day SMA on 8/30/13, thereby turning systematically neutral (from bearish). The 50-day SMA remains below the 200-day SMA, and BKF/SPY fell below the lows of the previous 4 years on 8/7/13. BKF/SPY has underperformed since it peaked on 10/14/2010. Absolute price of BKF peaked at 42.29 on 2/1/13, fell to a 20-month low at 32.62 on 6/24/13, and whipsawed back up above its 50-day SMA on 9/4/13, thereby turning systematically neutral (from bearish).
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) whipsawed back up above its 50-day SMA on 9/4/13, thereby turning systematically neutral (from bearish). The 50-day SMA remains far below the 200-day SMA, and EEM/SPY fell below the lows of the previous 4 years on 7/10/13. EEM/SPY has underperformed since the ratio peaked on 10/14/2010. This year, absolute price of EEM peaked at 45.34 on 1/2/13, fell to a 19-month low of 36.16 on 6/24/13, and whipsawed back up above its 50-day SMA on 9/4/13, thereby turning systematically neutral (from bearish).
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) whipsawed back up above its 50-day SMA on 9/3/13, thereby turning systematically neutral (from bearish). The 50-day SMA remains below the 200-day SMA. For nearly 6 years, from 11/27/07 to 7/9/13, EFA/SPY underperformed. Absolute price of EFA rose above its 50-day SMA on 9/3/13, thereby turning systematically bullish.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) whipsawed back down below its 50-day SMA on 9/24/13, thereby turning systematically bearish (from neutral). Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative stability and safety of large size. On the other hand, Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors seek greater potential returns in more volatile, smaller stocks.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) turned systematically bullish (from neutral) on 9/3/13 and rose above its highs of the past 18 months on 10/1/13 to confirm its preexisting bullish trend. Absolute price whipsawed back up above its 50-day SMA on 10/10/13, thereby turning systematically bullish (from neutral).
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) turned systematically bullish (from neutral) on 9/24/13 and rose above its highs of the past 27 months on 10/1/13 to confirm its preexisting bullish trend. Absolute price whipsawed back up above its 50-day SMA on 10/10/13, thereby turning systematically bullish (from neutral).
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price fell below its lows of the previous 23 months on 10/18/13, thereby confirming a major downtrend. Price turned systematically bearish (from neutral) on 9/12/13 when its 50-day SMA crossed below its 200-day SMA. Longer term, UUP has been consolidating secular trend losses since bottoming at 20.84 on 5/4/11. Support 21.07 and 20.84. Resistance 22.34, 22.98, 23.14, 23.52, 25.84, 27.19, and 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price turned systematically neutral (from bearish) on 8/26/13, when it rose above its 50-day SMA. DBA price was in a cyclical bear market for 29 months from a peak at 35.58 on 3/4/11 to a low of 24.36 on 8/2/13.
Crude Oil, United States Oil ETF (USO) price fell below its lows of the previous 5 months on 10/17/13, thereby confirming a medium-term downtrend. Price whipsawed back down below its 50-day SMA on 9/20/13, thereby turning systematically neutral again (from bullish). Support 35.53, 32.53, 32.12, 30.79, 29.02, 26.28, and 22.74. Resistance 39.54, 39.64, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) price whipsawed back down below its 50-day SMA on 9/20/13, thereby turning systematically bearish again (from neutral). Support: 114.68, 113.08 and 102.28. Resistance: 137.62, 143.43, 149.44, 153.85, 156.80, 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) has stayed systematically bearish most of the time since absolute price peaked at 66.98 on 9/9/11. Longer term, GDX/GLD has remained mostly bearish for more than 7 years, since 9/5/06.
Silver, iShares Silver Trust ETF (SLV) price whipsawed back down below its 50-day SMA on 10/9/13, thereby turning systematically bearish (from neutral). Support 19.88, 18.71, 17.75, 16.73, 14.37, 12.27, 11.64, and 8.45. Resistance: 23.84, 25.34, 27.14, 27.35, 28.50, 28.61, 29.73, 31.41, 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) crossed back below its 50-day SMA on 10/16/13, thereby turning systematically bearish (from neutral). SLV underperformed GLD for more than 2 years from 4/28/11 to 7/30/13.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price whipsawed back down below its 50-day SMA on 10/17/13, thereby turning systematically bearish again (from neutral). Longer term, JJC price was in a persistent downtrend for more than 2 years from its peak of 61.69 on 2/14/11 to its low of 36.87 on 6/24/13. “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
13.80% , GOOG , Google
7.85% , BIDU , Baidu, Inc., BIDU
5.23% , PH , PARKER HANNIFIN
7.28% , BHI , BAKER HUGHES
4.99% , MPEL , Melco Crown Entertainment, MPEL
0.68% , XSD , Semiconductor SPDR, XSD
5.84% , AMZN , Amazoncom Inc
2.65% , TXT , TEXTRON
3.53% , GE , GENERAL ELECTRIC
1.98% , IYW , Technology DJ US, IYW
1.05% , IWN , Value SmallCap Russell 2000, IWN
2.19% , R , RYDER SYSTEM
2.30% , CS , Credit Suisse Group, CS
1.43% , EWD , Sweden Index, EWD
1.13% , KCE , Capital Markets KWB ST, KCE
2.14% , HOT , STARWOOD HOTELS
2.63% , MS , MORGAN STANLEY
1.09% , IDX , Indonesia MV, IDX
0.58% , SCZ , Small Cap EAFE MSCI iS, SCZ
3.70% , KSU , Kansas City Southern, KSU
0.78% , PKB , Building & Construction, PKB
1.71% , RF , REGIONS FINAN
1.46% , CHKP , Check Point Software Technologies Ltd
1.45% , HAL , HALLIBURTON
1.74% , CAT , CATERPILLAR
1.88% , STI , SUNTRUST BANKS
1.26% , GILD , Gilead Sciences Inc
2.17% , ROK , ROCKWELL AUTOMAT
2.00% , GCI , GANNETT
0.26% , CINF , CINCINNATI FIN
2.19% , ZION , ZIONS
1.36% , BCR , C R BARD
1.68% , CVS , CVS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-13.69% , AMD , ADV MICRO DEV
-3.76% , FHN , First Horizon National
-5.03% , IPG , INTERPUBLIC GRP
-2.62% , GPC , GENUINE PARTS
-3.28% , QID , Short 200% QQQ PS, QID
-2.49% , HON , HONEYWELL INTL
-3.41% , CTB , COOPER TIRE
-2.77% , LOW , LOWES
-2.79% , HUM , HUMANA
-2.49% , WLP , WELLPOINT HEALTH
-1.65% , PSQ , Short 100% QQQ, PSQ
-1.18% , CAH , CARDINAL HEALTH
-3.27% , CI , CIGNA
-1.39% , HD , HOME DEPOT
-1.84% , BAX , BAXTER INTL
-0.99% , RTN , RAYTHEON
-0.50% , AFL , AFLAC
-1.06% , MRK , MERCK & CO
-1.18% , BBT , BB&T
-0.52% , ILF , Latin Am 40, ILF
-2.29% , LH , LAB CRP OF AMER
-0.21% , MKC , MCCORMICK
-0.76% , COF , CAPITAL ONE FNCL
-0.28% , MCD , MCDONALDS
-0.75% , SRCL , Stericycle, SRCL
-0.37% , BBBY , BED BATH BEYOND
-1.17% , AET , AETNA
-1.99% , FDO , FAMILY DLR STRS
-0.12% , IXJ , Healthcare Global, IXJ
-0.29% , TGT , TARGET
-1.05% , YUM , YUM BRANDS
-0.17% , LEG , LEGGETT & PLATT
-1.76% , XBI , Biotech SPDR, XBI
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.69% , China LargeCap Growth G D H USX PS, PGJ
1.98% , Technology DJ US, IYW
1.78% , Info Tech VIPERs, VGT
1.71% , Technology SPDR, XLK
1.62% , QQQ Nasdaq 100 Trust, QQQ
1.49% , WilderHill Clean Energy PS, PBW
1.44% , SmallCap Growth S&P 600 iS, IJT
1.43% , Sweden Index, EWD
1.39% , Hong Kong Index, EWH
1.28% , SmallCap Growth Russell 2000 iS, IWO
1.24% , Networking, IGN
1.22% , SmallCap Blend S&P 600 iS, IJR
1.21% , SmallCap Value S&P 600 iS, IJS
1.20% , Transportation Av DJ, IYT
1.17% , Australia Index, EWA
1.14% , SmallCap Blend Russell 2000 iS, IWM
1.13% , Pacific ex-Japan, EPP
1.13% , Capital Markets KWB ST, KCE
1.09% , Industrial SPDR, XLI
1.09% , Energy SPDR, XLE
1.09% , Indonesia MV, IDX
1.06% , Growth VIPERs, VUG
1.05% , SmallCap Value Russell 2000 iS, IWN
1.03% , Energy & Nat Res iS GS, IGE
1.03% , MidCap Growth S&P 400 iS, IJK
1.02% , Growth SmallCap VIPERs, VBK
1.01% , Energy DJ, IYE
1.00% , Water Resources, PHO
0.98% , Energy VIPERs, VDE
0.95% , France Index, EWQ
0.94% , Belgium Index, EWK
0.90% , Telecom DJ US, IYZ
0.87% , Dividend ex-U.S. DJ iS, IDV
0.87% , MidCap Blend S&P 400 iS, IJH
0.86% , Austria Index, EWO
0.85% , Value SmallCap VIPERS, VBR
0.84% , MidCap S&P 400 SPDRs, MDY
0.84% , Russia MV, RSX
0.84% , LargeCap Growth S&P 500 iS, IVW
0.83% , Canada Index, EWC
0.83% , Oil Fund PowerShares, DBO
0.82% , LargeCap Growth Russell 1000 iS, IWF
0.81% , Microcap Russell, IWC
0.81% , Small Cap VIPERs, VB
0.76% , MidCap Value S&P 400 iS, IJJ
0.76% , Energy Global, IXC
0.75% , Emerging 50 BLDRS, ADRE
0.74% , Growth EAFE MSCI, EFG
0.73% , LargeCap Blend S&P 100, OEF
0.72% , LargeCap Blend Russell 3000 iS, IWV
0.71% , Blend Total Market VIPERs, VTI
0.69% , India Earnings WTree, EPI
0.68% , EMU Europe Index, EZU
0.68% , Semiconductor SPDR, XSD
0.68% , Spain Index, EWP
0.68% , LargeCap Blend S&P 500 iS, IVV
0.67% , S&P 500 SPDRs LargeCap Blend, SPY
0.66% , Growth MidCap Russell, IWP
0.66% , Switzerland Index, EWL
0.65% , LargeCap VIPERs, VV
0.65% , LargeCap Blend Russell 1000 iS, IWB
0.64% , Financial Preferred, PGF
0.64% , Europe 350 S&P Index, IEV
0.63% , European VIPERs, VGK
0.63% , Netherlands Index, EWN
0.62% , Turkey MSCI iS, TUR
0.62% , Consumer Discretionary SPDR, XLY
0.61% , MidCap Russell, IWR
0.59% , Foreign LargeCap EAFE MSCI iS, EFA
0.58% , Global ex U.S. LargeCap Blend, ACWX
0.58% , SmallCap Blend EAFE MSCI iS, SCZ
0.57% , Commodity Tracking, DBC
0.56% , Pacific VIPERs, VPL
0.56% , Global LargeCap Blend MSCI iS, ACWI
0.55% , Preferred Stock iS, PFF
0.54% , Value MidCap Russell, IWS
0.53% , Dividend High Yield Equity PS, PEY
0.53% , Financial Services DJ, IYG
0.52% , India PS, PIN
0.51% , Dividend International, PID
0.51% , Singapore Index, EWS
0.51% , LargeCap Value S&P 500 iS, IVE
0.50% , LargeCap Value Russell 1000 iS, IWD
0.48% , Taiwan Index, EWT
0.46% , LargeCap Blend S&P=Weight R, RSP
0.46% , Frontier Markets Guggenheim , FRN
0.46% , Value EAFE MSCI, EFV
0.44% , Global 100, IOO
0.44% , Basic Materials DJ US, IYM
0.41% , Utilities VIPERs, VPU
0.40% , Germany Index, EWG
0.39% , Thailand MSCI iS, THD
0.38% , Italy Index, EWI
0.38% , Dividend U.S. DJ iS, DVY
0.37% , South Korea Index, EWY
0.36% , Value VIPERs, VTV
0.35% , United Kingdom Index, EWU
0.32% , Dividend Appreciation Vipers, VIG
0.31% , Silver Trust iS, SLV
0.31% , Materials SPDR, XLB
0.30% , Value LargeCap Dynamic PS, PWV
0.28% , Semiconductor iS IGW, SOXX
0.27% , Bond, High-Yield Junk, JNK
0.26% , Utilities SPDR, XLU
0.26% , Financials VIPERs, VFH
0.22% , Bond, 20+ Years Treasury, TLT
0.20% , Bond, High Yield Corp iBoxx iS, HYG
0.19% , Oil, Crude, U.S. Oil Fund, USO
0.19% , Financial SPDR, XLF
0.18% , Dividend SPDR, SDY
0.18% , Financial DJ US, IYF
0.17% , Bond, Intermediate US Aggregate iS, AGG
0.15% , Bond Ex-US Treas, BWX
0.14% , Consumer Staples SPDR, XLP
0.14% , Bond, TIPS U.S. Treasury iS, TIP
0.13% , Bond, Long-Term Corp iBoxx iS, LQD
0.11% , Metals & Mining SPDR, XME
0.11% , Bond, Muni S&P ATM-Free iS, MUB
0.11% , China 25 iS, FXI
0.10% , Emerging Markets MSCI iS, EEM
0.08% , Japan Index, EWJ
0.08% , DIAMONDS (DJIA), DIA
0.06% , Bond, Emerging Mkt JPM iS, EMB
0.06% , South Africa Index, EZA
0.01% , Bond, 10 Year Treasury, IEF
0.01% , Bond Treasury Short-Term iS, SHV
0.00% , Bond, 1-3 Year Treasury, SHY
0.00% , Homebuilders SPDR, XHB
-0.01% , Emerging VIPERs, VWO
-0.10% , REIT VIPERs, VNQ
-0.19% , Real Estate US DJ iS, IYR
-0.19% , Agriculture DB PS, DBA
-0.22% , REIT Wilshire, RWR
-0.31% , Chile MSCI iS, ECH
-0.33% , Mexico Index, EWW
-0.37% , Realty Cohen & Steers, ICF
-0.39% , Brazil Index, EWZ
-0.40% , Health Care SPDR, XLV
-0.45% , Gold Shares S.T., GLD
-0.50% , Malaysia Index, EWM
-0.52% , Latin Am 40, ILF
-0.74% , Bear, Short S&P 500, SH
-1.76% , Biotech SPDR, XBI
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The S&P 500 Composite Potential Resistance
none
The S&P 500 Composite Potential Support
1729.86, high of 9/19/2013
1711.57, high of 10/15/2013
1709.67, high of 8/2/2013
1703.85, high of 9/26/2013
1700.18, high of 8/8/2013
1698.78, high of 7/23/2013
1696.81, high of 8/13/2013
1696.55, high of 10/1/2013
1695.93, low of 10/15/2013
1687.18, high of 5/22/2013
1687.11, low of 9/27/2013
1680.51, 50-day SMA
1676.03, low of 7/26/2013
1674.99, low of 9/30/2013
1672.40, high of 9/9/2013
1671.84, low of 7/16/2013
1670.36, low of 10/3/2013
1669.51, high of 8/26/2013
1654.19, high of 6/18/2013
1654.18, high of 7/9/2013
1652.62, Fib 38.2% of Jun-Aug 2013
1652.61, low of 8/16/2013
1646.47, low of 10/9/2013
1635.00, Fib 50.0% of Jun-Aug 2013
1629.05, low of 8/27/2013
1617.38, Fib 61.8% of Jun-Aug 2013
1609.35, 200-day SMA
1606.04, Fib 23.6% of Nov-May 2013
1592.29, Fib 78.6% of Jun-Aug 2013
1560.33, low of 6/24/2013
1556.24, Equal Waves Projection
1555.84, Fib 38.2% of Nov-May 2013
1536.03, low of 4/18/2013
1530.94, high of 2/19/2013
1515.27, Fib 50% of Nov-May 2013
1485.01, low of 2/26/2013
1474.69, Fib 61.8% of Nov-May 2013
1474.51, high of 9/14/2012
1468.82, Fib 78.6% of 2009-13 range
1451.64, low on 1/8/2013
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
1423.73, high of 12/3/2012
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
1416.93, Fib 79.6% of Nov-May 2013
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
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
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1357.38, low of 4/10/2012
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
1306.62, low of 6/12/2012
1297.39, Fib 61.8% of 2009-13 range
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
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
1176.99, Fib 50% of 2009-13 range
1158.66, low of 11/25/2011
1121.44, Fibonacci 50% of 2007-2009 range
1056.58, Fib 38.2% of 2009-13 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
907.60, Fib 23.6% of 2009-13 range
881.38, Fibonacci 23.6% of 2007-2009 range
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
