Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below its lows of the previous 3 months on 10/15/12, suggesting a downside correction.
Gold, SPDR Gold Shares ETF (GLD) fell below its lows of the previous 4 weeks on 10/15/12, suggesting a minor correction.
Silver, iShares Silver Trust ETF (SLV) fell below its lows of the previous 5 weeks on 10/15/12, suggesting a minor correction.
Silver/Gold ETFs Ratio (SLV/GLD) fell below its lows of the previous 5 weeks on 10/15/12, suggesting a minor correction.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price fell below its lows of the previous 4 weeks on 10/15/12, suggesting a minor correction.
Financial stock sector Relative Strength Ratio (XLF/SPY) turned systematically bullish on 10/15/12 when the 50-day SMA rose above the 200-day SMA.
The S&P 500 (SPX: 1,429.36) recovered a normal fraction if its losses over the previous 6 trading days on Monday.
On Friday, SPX closed below both its lows of the previous 5 weeks and below a 4-month uptrend line rising from the year’s low on 6/4/12. SPX also broke down below its 50-day SMA (now standing at 1429.36) during the Friday’s session but managed to close above it by just 0.21.
It looks to me like this bull may be attempting to hold on the edge of the cliff with one hoof, but his three other hooves are flailing in the air below. The bull is trying to get a grip, but if the SPX closes below its 50-day SMA, the bull might lose his grip and fall off the cliff, for its biggest downside correction since May.
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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Stock Market Indicators
The Dow Theory signaled a Primary Tide Bear Market on 5/17/12 when both Industrials and Transports closed below their closing price lows of the previous 4 months, including the critical lows of March and April, 2012. 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. On 10/10/12, the Industrials fell below a 4-month uptrend line rising from the year’s low on 6/4/12.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) fell below its 50-day SMA on 9/28/12, thereby turning systematically neutral again. QQQ/SPY fell below its 200-day SMA on 10/8/12. The QQQ/SPY Ratio’s 50-day SMA has remained above the 200-day SMA since 8/5/11.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) turned systematically neutral on 9/13/12, when it rose above its 50-day SMA. BKF/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/13/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) turned systematically neutral on 9/13/12, when it rose above its 50-day SMA. EEM/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 2/3/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) turned systematically neutral again on 10/10/12, when it whipsawed back up above its 50-day SMA. EFA/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/14/11. EFA/SPY has been trending down for nearly 5 years, since 11/27/2007, and there is no convincing evidence of any significant change in that major long-term downtrend.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) turned systematically neutral again on 10/11/12, when it fell below its 50-day SMA. OEF/SPY remains above its 200-day SMA, and the 50-day SMA has been above the 200-day SMA consistently every day since 8/24/11. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative safety of large size. On the other side of the coin, Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors prefer riskier and more volatile stocks.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) whipsawed back down below its 50-day SMA on 10/12/12, thereby turning systematically bearish again. IWM/SPY fell below its 200-day SMA on 9/24/12, and its 50-day SMA has remained below its 200-day SMA consistently every day since 4/20/12.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below its 50-day SMA on 9/25/12, thereby turning systematically bearish again. MDY/SPY remains below its 200-day SMA, and its 50-day SMA has been below its 200-day SMA since 6/6/12.
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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
1474.51, high of 9/14/2012
1440.24, high of 5/19/2008
The S&P 500 Composite Potential Support
1439.15, high of 9/12/2012
1430.53, low of 9/26/2012
1429.36, 50-day SMA
1422.38, high of 4/2/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
1396.56, low of 9/4/2012
1391.04, low of 8/6/2012
1389.07, Fibonacci 78.6% of April-June 2012 range
1388.71, low of 5/3/2012
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
1370.33, 200-day SMA
1363.49, high of 6/19/2012
1362.93, Fibonacci 61.8% of April-June 2012 range
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
1344.56, Fibonacci 50% of April-June 2012 range
1340.34, Fibonacci 23.6% of 2011-12 range
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
1326.19, Fibonacci 38.2% of April-June 2012 range
1325.41, low of 7/12/2012
1306.62, low of 6/12/2012
1303.47, Fibonacci 23.6% of April-June 2012 range
1291.98, low of 5/18/2012
1289.59, Fibonacci 38.2% of 2011-12 range
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
1248.58, Fibonacci 50.0% of 2011-12 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
1207.56, Fibonacci 61.8% of 2011-12 range
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
1149.16, Fibonacci 78.6% R of 2011-12 range
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) whipsawed back above its 50-day SMA on 10/12/12, thereby turning systematically bullish again. TLT whipsawed back above its 200-day SMA on 9/19/12. TLT’s 50-day SMA has remained above its 200-day SMA every day since 6/24/11. Support 120.92, 120.67, 118.05, 117.44, 115.69, 114.82, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance: 125.09, 127.72, 130.69, and 132.22.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) whipsawed back above its 50-day SMA on 10/10/12, thereby turning systematically bullish again. IEF remains above its 200-day SMA, and its 50-day SMA has remained above its 200-day SMA every day since 6/21/11. Support 107.23, 106.42, 105.84, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance: 108.70, 108.99, 109.32, and 109.89.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below its 50-day SMA on 9/25/12, thereby turning systematically bearish again. JNK/LQD fell below its 200-day SMA on 9/20/12. JNK/LQD 50-day SMA has remained consistently below its 200-day SMA every day since 6/1/12.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) turned bullish on 10/10/12 when the TIP/IEF 50-day SMA rose above the 200-day SMA. TIP/IEF remains above both its 50-day SMA and 200-day SMA.
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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 21.96, 22.36, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below its lows of the previous 3 months on 10/15/12. DBA turned systematically neutral on 9/17/12 when price crossed below its 50-day SMA. DBA remains above its 200-day SMA but could cross below in days ahead if DBA continues to decline like it has over the past 4 last weeks. DBA’s 50-day SMA remains well 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 32.52, 32.45, 31.40, 29.02, 26.28, and 22.74. Resistance 34.70, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) fell below its lows of the previous 4 weeks on 10/15/12, suggesting a minor correction. 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: 166.30, 159.56, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 174.07, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) fell below its lows of the previous 4 weeks on 10/12/12, suggesting a minor correction. 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, and the 50 could cross above the 200 in days ahead.
Silver, iShares Silver Trust ETF (SLV) fell below its lows of the previous 5 weeks on 10/15/12, suggesting a minor correction. SLV turned systematically bullish on 10/1/12 when its price 50-day SMA crossed above the 200-day SMA. Support 31.46, 29.28, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 33.23, 34.08, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) fell below its lows of the previous 5 weeks on 10/15/12, suggesting a minor correction. SLV/GLD turned systematically bullish on 10/9/12 when its 50-day SMA crossed above the 200-day SMA. SLV/GLD crossed above its 50-day SMA on 8/16/12 and crossed above its 200-day SMA on 8/31/12.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price fell below its lows of the previous 4 weeks on 10/15/12, suggesting a minor correction. JJC 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, however, and a crossover appears possible in weeks ahead if price holds up or rises. “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
2.80% , JNY , JONES APPAREL
4.00% , ABT , ABBOTT LABS
2.54% , BMY , BRISTOL MYERS
4.82% , NYT , NY TIMES STK A
0.83% , VV , LargeCap VIPERs, VV
5.50% , C , CITIGROUP
3.14% , CIEN.O , CIENA
4.12% , LLY , ELI LILLY
1.44% , XLV , Health Care SPDR, XLV
0.74% , ACWX , Global ex US ACWI iS, ACWX
0.44% , TUR , Turkey MSCI iS, TUR
3.96% , WY , WEYERHAEUSER
1.31% , EWT , Taiwan Index, EWT
3.43% , SNDK , SanDisk Corporation
3.58% , GS , GOLDMAN SACHS
2.56% , BIG , BIG LOTS
0.62% , IJT , Growth BARRA Small Cap 600, IJT
1.09% , IYG , Financial Services DJ, IYG
3.26% , TXT , TEXTRON
3.41% , DISH , EchoStar Communications
0.61% , VXF , Extended Mkt VIPERs, VXF
1.86% , LEG , LEGGETT & PLATT
2.50% , LPX , LOUISIANA PAC
0.98% , EFA , EAFE Index, EFA
1.97% , FISV , FISERV
0.96% , PWV , Value LargeCap Dynamic PS, PWV
3.09% , MPEL , Melco Crown Entertainment, MPEL
0.46% , IYE , Energy DJ, IYE
2.13% , MRK , MERCK & CO
1.60% , PH , PARKER HANNIFIN
1.68% , CAG , CONAGRA FOODS
0.71% , PEJ , Leisure & Entertainment, PEJ
2.15% , THC , TENET HEALTHCARE
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.91% , GILD , Gilead Sciences Inc
-2.49% , BMC.O , BMC SOFTWARE
-3.42% , APOL , APOLLO GROUP
-2.43% , SLV , Silver Trust iS, SLV
-0.70% , S , SPRINT NEXTEL
-0.29% , IXP , Telecommunications Global, IXP
-0.94% , EBAY , EBAY
-1.26% , YHOO , YAHOO
-1.77% , SDS , Short 200% S&P 500 PS, SDS
-1.05% , COF , CAPITAL ONE FNCL
-0.35% , VIA.O , VIACOM INC. (New)
-1.01% , GLD , Gold Shares S.T., GLD
-1.18% , T , AT&T Corp., T
-0.28% , GCI , GANNETT
-1.00% , IAU , Gold COMEX iS, IAU
-0.28% , OXY , OCCIDENTAL
-0.52% , AXP , AMERICAN EXPRESS
-0.23% , PMTC.O , PARAMETRIC
-0.27% , VZ , VERIZON COMMS
-0.04% , TMK , TORCHMARK
-0.27% , USB , US BANCORP
-0.03% , HSP , HOSPIRA
-0.12% , HUM , HUMANA
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.27% Homebuilders SPDR, XHB
1.57% Austria Index, EWO
1.44% Health Care SPDR, XLV
1.38% Sweden Index, EWD
1.37% Italy Index, EWI
1.35% Semiconductor iS IGW, SOXX
1.32% Semiconductor SPDR, XSD
1.31% Taiwan Index, EWT
1.25% Metals & Mining SPDR, XME
1.22% France Index, EWQ
1.22% Dividend ex-U.S. DJ iS, IDV
1.17% Latin Am 40, ILF
1.15% Switzerland Index, EWL
1.14% Financial SPDR, XLF
1.12% Mexico Index, EWW
1.12% Spain Index, EWP
1.11% Brazil Index, EWZ
1.09% Financial Services DJ, IYG
1.07% European VIPERs, VGK
1.01% Value EAFE MSCI, EFV
1.01% Global 100, IOO
1.00% Financials VIPERs, VFH
1.00% Australia Index, EWA
0.99% Consumer Discretionary SPDR, XLY
0.98% EMU Europe Index, EZU
0.98% Foreign LargeCap EAFE MSCI iS, EFA
0.96% Value LargeCap Dynamic PS, PWV
0.96% SmallCap Blend EAFE MSCI iS, SCZ
0.95% Belgium Index, EWK
0.93% MidCap S&P 400 SPDRs, MDY
0.92% Europe 350 S&P Index, IEV
0.92% Financial DJ US, IYF
0.90% MidCap Blend S&P 400 iS, IJH
0.90% Capital Markets KWB ST, KCE
0.90% Netherlands Index, EWN
0.90% LargeCap Blend S&P 100, OEF
0.89% Pacific ex-Japan, EPP
0.89% South Korea Index, EWY
0.88% Pacific VIPERs, VPL
0.88% Growth EAFE MSCI, EFG
0.88% MidCap Value S&P 400 iS, IJJ
0.86% SmallCap Growth Russell 2000 iS, IWO
0.85% Materials SPDR, XLB
0.85% Dividend SPDR, SDY
0.83% LargeCap Growth Russell 1000 iS, IWF
0.83% S&P 500 SPDRs LargeCap Blend, SPY
0.83% LargeCap Blend S&P 500 iS, IVV
0.83% LargeCap VIPERs, VV
0.82% LargeCap Value S&P 500 iS, IVE
0.82% Blend Total Market VIPERs, VTI
0.82% Emerging 50 BLDRS, ADRE
0.82% LargeCap Value Russell 1000 iS, IWD
0.82% Value VIPERs, VTV
0.81% LargeCap Blend Russell 1000 iS, IWB
0.81% LargeCap Blend Russell 3000 iS, IWV
0.79% LargeCap Growth S&P 500 iS, IVW
0.79% Germany Index, EWG
0.77% Hong Kong Index, EWH
0.76% Dividend Appreciation Vipers, VIG
0.76% India PS, PIN
0.74% China 25 iS, FXI
0.74% Growth VIPERs, VUG
0.74% Global ex U.S. LargeCap Blend, ACWX
0.73% QQQ Nasdaq 100 Trust, QQQ
0.73% LargeCap Blend S&P=Weight R, RSP
0.73% Growth SmallCap VIPERs, VBK
0.72% Growth MidCap Russell, IWP
0.71% Dividend U.S. DJ iS, DVY
0.70% MidCap Growth S&P 400 iS, IJK
0.69% Basic Materials DJ US, IYM
0.69% MidCap Russell, IWR
0.69% Industrial SPDR, XLI
0.68% Realty Cohen & Steers, ICF
0.68% Small Cap VIPERs, VB
0.68% Singapore Index, EWS
0.67% Emerging VIPERs, VWO
0.67% Real Estate US DJ iS, IYR
0.67% Japan Index, EWJ
0.67% Consumer Staples SPDR, XLP
0.67% DIAMONDS (DJIA), DIA
0.66% Global LargeCap Blend MSCI iS, ACWI
0.66% REIT VIPERs, VNQ
0.66% SmallCap Blend Russell 2000 iS, IWM
0.65% Networking, IGN
0.64% REIT Wilshire, RWR
0.62% SmallCap Growth S&P 600 iS, IJT
0.62% SmallCap Blend S&P 600 iS, IJR
0.62% Technology DJ US, IYW
0.60% Info Tech VIPERs, VGT
0.59% Value MidCap Russell, IWS
0.58% Emerging Markets MSCI iS, EEM
0.56% Russia MV, RSX
0.53% India Earnings WTree, EPI
0.53% SmallCap Value S&P 600 iS, IJS
0.52% Bond, High-Yield Junk, JNK
0.52% SmallCap Value Russell 2000 iS, IWN
0.52% Value SmallCap VIPERS, VBR
0.52% United Kingdom Index, EWU
0.51% Utilities VIPERs, VPU
0.51% Energy SPDR, XLE
0.50% Technology SPDR, XLK
0.49% Energy VIPERs, VDE
0.48% Energy Global, IXC
0.48% China LargeCap Growth G D H USX PS, PGJ
0.46% Energy DJ, IYE
0.45% Bond, High Yield Corp iBoxx iS, HYG
0.44% Microcap Russell, IWC
0.44% Turkey MSCI iS, TUR
0.43% Chile MSCI iS, ECH
0.41% Utilities SPDR, XLU
0.40% Transportation Av DJ, IYT
0.39% Dividend International, PID
0.38% Energy & Nat Res iS GS, IGE
0.36% Water Resources, PHO
0.31% Dividend High Yield Equity PS, PEY
0.31% Bond, Long-Term Corp iBoxx iS, LQD
0.28% Canada Index, EWC
0.28% Indonesia MV, IDX
0.26% Bond, Emerg Mkt JPM iS, EMB
0.24% Malaysia Index, EWM
0.17% Biotech SPDR, XBI
0.08% Oil Fund PowerShares, DBO
0.05% Bond, Intermediate US Aggregate iS, AGG
0.03% Bond, 10 Year Treasury, IEF
0.03% Preferred Stock iS, PFF
0.00% WilderHill Clean Energy PS, PBW
0.00% Oil, Crude, U.S. Oil Fund, USO
0.00% Bond Treasury Short-Term iS, SHV
-0.01% Bond, TIPS U.S. Treasury iS, TIP
-0.02% Bond, 1-3 Year Treasury, SHY
-0.03% Bond, Muni S&P ATM-Free iS, MUB
-0.05% South Africa Index, EZA
-0.19% Bond Ex-US Treas, BWX
-0.23% Bond, 20+ Years Treasury, TLT
-0.25% Frontier Markets Guggenheim , FRN
-0.32% Telecom DJ US, IYZ
-0.37% Thailand MSCI iS, THD
-0.48% Financial Preferred, PGF
-0.49% Commodity Tracking, DBC
-0.79% Bear, Short S&P 500, SH
-0.93% Agriculture DB PS, DBA
-1.01% Gold Shares S.T., GLD
-2.43% Silver Trust iS, SLV
