Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) broke down below 14-month lows, confirming its bearish major trend.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below the lows of the previous 6 weeks.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price fell below the lows of the previous 16 trading days.
NASDAQ Composite/S&P 500 Relative Strength Ratio rose above previous 10-year highs. But NASDAQ absolute price remains below 50- and 200-day SMAs, which is bearish.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below 11-month lows.
The S&P 500 Composite (SPX, 1,172.87) rose 10.60 points or 0.91% on Tuesday, September 13, 2011. NYSE volume fell 10%, calling into question the staying power of the rally attempt.
SPX is between the lower and upper boundary lines of a Bear Flag Continuation Pattern. A break Monday’s low of 1,136.07, on higher volume would confirm a new and significant down leg in this ongoing Bear Market.
Longer-term, SPX fell below 11-month lows on 8/9/11 and remains bearishly below falling 20-, 50-, and 200-day SMAs.
Minor upside reversals lure short-term traders into trying to trade a bounce. Minor price corrections against the trend are normal and expected, of course. But playing minor counter trend bounces is risky. The mood can switch from “risk on” to “risk off” overnight, leaving the too-clever trader suddenly holding the bag, as we have seen repeatedly in recent weeks.
We keep in mind that the dominant trend for the stock market remains persistently bearish. That is the bias. In a bear market, surprises come to the downside.
Typically, there is no safe place to hide in a Dow Theory Primary Tide Bear Market. Even those stocks that have held up relatively well through most of the Bear Market eventually succumb to the relentless tide of selling.
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Includes Top Ten ETFs and Major Trend Relative Strength Rankings.
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9 major U.S. stock sectors ranked in order of long-term relative strength:
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Stock Market Indicators
NASDAQ Composite/S&P 500 Relative Strength Ratio rose above previous 10-year highs on 9/13/11. This means a long NASDAQ Composite and short S&P 500 hedge has been a winning trade. NASDAQ absolute price remains below 50- and 200-day SMAs, which is bearish.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) broke down below 14-month lows on 9/13/11, confirming its bearish major trend. Absolute price has been weak since 5/2/11, broke down below 13-month lows on 8/8/11 , and remains bearishly below falling 50- and 200-day SMAs.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) broke down below 6-year lows on 9/9/11, confirming its bearish major trend. Absolute price broke down below 12-month lows on 9/9/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below the lows of the previous 6 weeks on 9/13/11, confirming a minor downtrend. Longer term, OEX/SPX fell below 28-year lows on 5/26/11, confirming a bearish major trend.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) remains bearish for the major trend. IWM/SPY fell below 11-month lows on 8/22/11, remains below its 50- and 200-day SMAs, and the 50-day SMA remains below the 200-day SMA. Absolute price has been weak since 5/2/11, broke down below 13-month lows on 8/8/11, and remains below falling 50- and 200-day SMAs.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below 11-month lows on 8/8/11, confirming a bearish major trend. Both the MDY/SPY Ratio and the MDY price remain below 50- and 200-day SMAs, and the 50 is below the 200.
Advisory Service Sentiment: There were 38.7% Bulls versus 37.6% Bears as of 9/7/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio was 1.03, down from 1.12 the previous week. The Bull/Bear Ratio is now nearly 1 standard deviation below the 20-year average. When advisors turn this cautious, stocks usually have further to fall. The 20-year median is 1.56 and the mean is 1.64.
VIX Fear Index rose to 43.18 intraday on 9/12/11, up from 30.16 on 8/31/11. VIX hit 48.00 on 8/8/11, its highest level in 14 months, since 5/21/10. It could be possible for VIX to rise much higher: VIX was 89.53 on 10/24/08 during the financial crisis. Options players tend to grow more fearful as stock prices decline, and the trend of stock prices is down. 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 Dow Theory signaled a Primary Tide Bear Market on 8/2/11, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed below their closing price lows of June, 2011.
The S&P 500 Composite (SPX, 1,172.87) rose 10.60 points or 0.91% on Tuesday, September 13, 2011.
S&P 500 Cash Index 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
1440.24, high of 5/19/2008
1406.32, high of 5/29/2008
1381.50, Fibonacci 78.6% of 2007-2009 range
1370.58, high of 5/2/11
1359.44, high of 5/10/11
1356.48, high of 7/7/11
1347.00, high of 7/21/11
1258.07, low of 6/16/11
1249.05, low of 3/16/11
1246.73, high of 12/13/10
1238.81, Fibonacci 78.6% of 1,576.09 high
1235.05, high of 12/7/10
1234.56, low of 8/3/11
1232.85, low of 12/16/10
1228.74, Fibonacci 61.8% of 2007-2009 range
1230.71, high of 8/31/11
S&P 500 Cash Index Potential Support
1136.07, low of 9/12/2010
1101.54, low of 8/9/2010
1091.15, low of 9/7/2010
1039.70, low of 8/27/10
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
1008.55, Fibonacci 38.2% of 2009-2010 range
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
943.29, Gann 50.0% of 2009-2010 range
878.04, Fibonacci 61.8% of 2009-2010 range
874.17, Gann 62.5% of 2009-2010 range
869.32, low of 7/8/2009
805.17, Gann 75.0% of 2009-2010 range
785.13, Fibonacci 78.6% of 2009-2010 range
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 the lows of the previous 2 days on 9/13/11, suggesting a minor price pullback. TLT rose above the highs of the previous 2 years on 9/6/11, again confirming a major uptrend. Support 111.31, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 114.93, 116.92, 120.45, and 123.15.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (TLT) price fell below the lows of the previous 2 days on 9/13/11, suggesting a minor price pullback. IEF rose above all-time highs on 9/9/11, confirming a preexisting major uptrend. Investors are anticipating a Fed “Operation Twist” to be announced after the Fed meeting on 9/22/11; the central bank would attempt to lower longer-term interest rates, in order to stimulate the economy, by selling short-term debt instruments on its balance sheet and using the proceeds to buy 7-10 year Treasuries.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) remains bearish. Short term, JNK/LQD fell below 4-week lows on 9/9/11. Long term, JNK/LQD fell below 2-year lows on 8/10/11.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below 11-month lows on 9/13/11. TIP/IEF has been weak since peaking on 4/8/11 and remains below 3 key SMAs: 20, 50, and 200 days. This means fixed-income investors have been choosing the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs. Fixed-income investors are not worried about inflation.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price fell below the lows of the previous 2 days on 9/13/11, suggesting a minor price pullback. UUP rose above the highs of the previous 5 months, rose further above a 4-month Triangle boundary line, and rose above its 200-day SMA on 9/12/11. Support 21.67, 21.24 ,21.24, and 20.84. Resistance 21.98, 22.21, and 22.63.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price fell below the lows of the previous 16 trading days on 9/13/11, suggesting a minor downtrend within a larger downtrend. On 8/9/11, DBA traded below 8-month lows, confirming a long-term downtrend.
Crude Oil, United States Oil ETF (USO) price rose above the highs of the previous 5 weeks on 9/13/11, suggesting a minor uptrend. But USO fell below the lows of the previous 2 years on 8/9/11, confirming a major downtrend. Support 32.60, 31.45, 30.31, 26.28, 22.74. Resistance 35.00, 35.14, 39.25, 40.74, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) has been consolidating gains within its major uptrend over the past 4 days. Gold rose above all-time highs intraday on 9/6/11. Although minor price consolidations and corrections are to be expected in any trend, the dominant trend remains persistently bullish. In a world of too much debt, weak currencies, and self-serving politicians running amok, investors around the globe seek the safety of gold as the only forever-true money. Support: 174.45, 165.88, 159.68, 156.11, 154.10, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: 185.85.
Gold Mining Stocks ETF/ Gold Shares ETF Relative Strength Ratio (GDX/GLD) rose above 5-week highs on 9/7/11, confirming a minor rally attempt for the short term. GDX/GLD fell below 29-month lows on 8/8/11, confirming a bearish major trend for the long term. Absolute price of GDX is bullish, just not as bullish as GLD; investors prefer Gold over Gold Miners.
Silver, iShares Silver Trust ETF (SLV) rose above 3-month highs on 8/22/11, confirming a medium-term price uptrend, but has turned choppy and volatile since. SLV remains above key SMAs, so we assume the main trend is still bullish. Support 38.65,, 38.05, 36.04, 35.29, 34.02, and 31.97. Resistance: 42.78, 44.71 and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) has been mostly weak since peaking on 4/28/11. This means investors prefer Gold over Silver.
Copper, iPath DJ-UBS Copper TR Sub-Idx ETN (JJC ) remains bearish. JJC fell further below 50- and 200-day SMAs on 9/13/11 and fell below the lows of the previous 8 months on 8/10/11. Weakness in Copper suggests doubts about the economic outlook, while strength in Copper suggests confidence. Support 51.11, 50.59, and 49.00. Resistance: 54.10, 54.94, 56.64, 57.48, 59.06, 60.04, and 61.69.
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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 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
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
1.41% , FPX , IPOs, First Tr IPOX-100, FPX
5.48% , BHH , Internet B2B H, BHH
2.29% , BDH , Broadband H, BDH
0.75% , PEJ , Leisure & Entertainment, PEJ
1.08% , ADRA , Asia 50 BLDRS, ADRA
1.84% , JKJ , SmallCap Core iS M, JKJ
3.04% , FEU , Value LargeCap Euro STOXX 50 DJ, FEU
1.70% , IGN , Networking, IGN
8.23% , ODP , OFFICE DEPOT
2.26% , VIS , Industrials VIPERs, VIS
2.19% , XSD , Semiconductor SPDR, XSD
1.60% , ADRU , Europe 100 BLDRS, ADRU
5.85% , KSU , Kansas City Southern, KSU
4.96% , ININ , Interactive Intelligence ININ
0.96% , PIV , Value Line Timeliness MidCap Gr, PIV
8.66% , CIEN.O , CIENA
5.90% , CMI , CUMMINS
4.18% , ISIL , INTERSIL CORP
5.44% , AET , AETNA
5.07% , JNS , JANUS CAPITAL
6.77% , DYN , DYNEGY
4.85% , CMA , COMERICA
3.58% , RFV , Value MidCap S&P 400, RFV
6.01% , HGSI , Human Genome Sciences Inc
0.56% , FDL , Dividend Leaders, FDL
4.73% , FAST , Fastenal Company
3.96% , WLP , WELLPOINT HEALTH
3.22% , STLD , Steel Dynamics, STLD
3.87% , CTL , CENTURYTEL
3.06% , HMA , HEALTH MGMT STK A
2.85% , PXN , Nanotech Lux, PXN
2.86% , MVV , Ultra MidCap400 Double, MVV
1.48% , VOX , Telecom Services VIPERs, VOX
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-6.45% , BBY , BEST BUY
-2.07% , PIC , Insurance, PIC
-4.34% , PSTL , Steel Global PS ETF, PSTL
-2.66% , HSP , HOSPIRA
-0.78% , NY , Value LargeCap NYSE 100 iS, NY
-3.18% , DV , DeVry, Inc.
-1.60% , PWER , POWER ONE
-2.87% , MZZ , Short 200% MidCap 400 PS, MZZ
-0.98% , NEE , NextEra Energy Resources LLC
-1.07% , EWT , Taiwan Index, EWT
-1.46% , DHI , D.R. HORTON, DHI
-0.66% , INTU , INTUIT
-1.42% , TLT , Bond, 20+ Years Treasury, TLT
-2.26% , RF , REGIONS FINAN
-1.07% , LSI , LSI LOGIC
-0.60% , CVS , CVS
-1.01% , BIG , BIG LOTS
-0.57% , TLH , Bond 10-20 Year US Treas, TLH
-1.29% , AON , AON
-1.27% , MTG , MGIC INVESTMENT
-0.58% , IDX , Indonesia MV, IDX
-1.23% , APA , APACHE
-0.75% , ALL , ALLSTATE
-0.76% , URBN , Urban Outfitters Inc.
-0.45% , EXC , EXELON CORP
-0.35% , TDC , Teradata Corporation, TDC
-0.24% , CEG , CONSTELL ENERGY
-0.40% , MHS , MEDCO HEALTH
-1.12% , VLO , VALERO ENERGY
-0.42% , EQR , EQUITY RESIDENT BEN INT
-0.52% , MMM , 3M
-0.18% , KBH , KB HOME
-0.15% , MUB , Bond Muni ATM-Free S&P iS, MUB
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
3.52% Transportation Av DJ, IYT
2.74% Turkey MSCI iS, TUR
2.58% WilderHill Clean Energy PS, PBW
2.51% Spain Index, EWP
2.29% Sweden Index, EWD
2.20% Italy Index, EWI
2.19% Semiconductor SPDR, XSD
2.06% Growth SmallCap VIPERs, VBK
1.97% Semiconductor iS IGW, SOXX
1.91% Growth SmallCap R 2000, IWO
1.87% Industrial SPDR, XLI
1.87% Silver Trust iS, SLV
1.77% Small Cap VIPERs, VB
1.72% Growth MidCap 400 B, IJK
1.72% Growth BARRA Small Cap 600, IJT
1.72% Japan Index, EWJ
1.70% Water Resources, PHO
1.70% Networking, IGN
1.67% Growth MidCap Russell, IWP
1.66% Microcap Russell, IWC
1.65% Materials SPDR, XLB
1.62% SmallCap Russell 2000, IWM
1.61% Biotech SPDR, XBI
1.58% Value SmallCap Russell 2000, IWN
1.58% SmallCap S&P 600, IJR
1.56% Value SmallCap VIPERS, VBR
1.53% Metals & Mining SPDR, XME
1.52% Basic Materials DJ US, IYM
1.49% Capital Markets KWB ST, KCE
1.42% Info Tech VIPERs, VGT
1.42% South Africa Index, EZA
1.41% Value SmallCap S&P 600 B, IJS
1.41% MidCap S&P 400 iS, IJH
1.37% MidCap S&P 400 SPDRs, MDY
1.37% Technology DJ US, IYW
1.36% MidCap Russell, IWR
1.34% QQQ Nasdaq 100 Trust, QQQ
1.32% Telecom DJ US, IYZ
1.25% Value MidCap S&P 400 B, IJJ
1.25% Oil, Crude, U.S. Oil Fund, USO
1.24% Germany Index, EWG
1.23% EMU Europe Index, EZU
1.22% Pacific VIPERs, VPL
1.20% LargeCap Blend S&P=Weight R, RSP
1.20% Oil Fund PowerShares, DBO
1.19% Growth VIPERs, VUG
1.18% Technology SPDR, XLK
1.17% Consumer Discretionary SPDR, XLY
1.15% Switzerland Index, EWL
1.14% Value MidCap Russell, IWS
1.10% Growth 1000 Russell, IWF
1.09% Value EAFE MSCI, EFV
1.07% EAFE Index, EFA
1.06% Gold Shares S.T., GLD
1.05% Silver Miners Global X, SIL
1.04% Dividend DJ Select, DVY
1.03% Growth S&P 500/BARRA, IVW
1.03% Health Care SPDR, XLV
1.00% Blend Total Market VIPERs, VTI
1.00% LargeCap Blend Russell 3000, IWV
0.96% Canada Index, EWC
0.96% Growth EAFE MSCI, EFG
0.93% Financial Services DJ, IYG
0.92% S&P 500 SPDRs LargeCap Blend, SPY
0.91% Dividend SPDR, SDY
0.90% Belgium Index, EWK
0.90% LargeCap VIPERs, VV
0.89% Value 1000 Russell, IWD
0.88% LargeCap 1000 R, IWB
0.85% Bond, High-Yield Junk, JNK
0.84% Dividend Appreciation Vipers, VIG
0.84% Europe 350 S&P Index, IEV
0.83% Dividend High Yield Equity PS, PEY
0.81% S&P 500 iS LargeCap Blend, IVV
0.79% Global ex US ACWI iS, ACWX
0.77% Dividend International, PID
0.77% Value VIPERs, VTV
0.76% Bond, High-Yield Corporate, HYG
0.75% Value S&P 500 B, IVE
0.75% Value LargeCap Dynamic PS, PWV
0.73% European VIPERs, VGK
0.71% Homebuilders SPDR, XHB
0.71% Utilities VIPERs, VPU
0.71% Global 100, IOO
0.69% Financials VIPERs, VFH
0.68% LargeCap Blend S&P 100, OEF
0.68% France Index, EWQ
0.67% Latin Am 40, ILF
0.67% Utilities SPDR, XLU
0.65% Financial SPDR, XLF
0.62% Netherlands Index, EWN
0.60% Financial DJ US, IYF
0.55% Energy & Nat Res iS GS, IGE
0.45% Energy Global, IXC
0.45% Austria Index, EWO
0.43% Mexico Index, EWW
0.43% Energy VIPERs, VDE
0.42% Hong Kong Index, EWH
0.42% Realty Cohen & Steers, ICF
0.42% Small Cap EAFE MSCI iS, SCZ
0.40% South Korea Index, EWY
0.37% DIAMONDS (DJIA), DIA
0.37% Consumer Staples SPDR, XLP
0.35% China LargeCap Growth G D H USX PS, PGJ
0.35% Energy DJ, IYE
0.33% REIT Wilshire, RWR
0.33% Financial Preferred, PGF
0.30% Preferred Stock iS, PFF
0.29% Bond EmrgMkt JPM iS, EMB
0.28% Energy SPDR, XLE
0.25% Emerging 50 BLDRS, ADRE
0.25% China 25 iS, FXI
0.24% REIT VIPERs, VNQ
0.22% Australia Index, EWA
0.17% Pacific ex-Japan, EPP
0.15% India PS, PIN
0.15% India Earnings WTree, EPI
0.15% Emerging Markets, EEM
0.15% Emerging VIPERs, VWO
0.09% Real Estate US DJ, IYR
0.08% Bond Ex-US Treas, BWX
0.06% United Kingdom Index, EWU
0.04% Bond, Aggregate, AGG
0.02% Bond Treasury Short-Term iS, SHV
0.01% Bond, 1-3 Year Treasury, SHY
-0.02% Bond, Corp, LQD
-0.10% Frontier Markets Guggenheim , FRN
-0.15% Chile MSCI iS, ECH
-0.15% Bond Muni ATM-Free S&P iS, MUB
-0.22% Brazil Index, EWZ
-0.30% Bond, 10 Year Treasury, IEF
-0.31% Commodity Tracking, DBC
-0.33% Singapore Index, EWS
-0.43% Bond, TIPS, TIP
-0.58% Indonesia MV, IDX
-0.72% Thailand MSCI iS, THD
-0.73% Malaysia Index, EWM
-0.74% Russia MV, RSX
-0.85% Agriculture DB PS, DBA
-1.07% Taiwan Index, EWT
-1.42% Bond, 20+ Years Treasury, TLT
