“Details of the agreement…remain to be worked out.”–Reuters
Risk on, for the moment. The markets seem willing to believe that this time will be different.
Here is what we know as actual fact as of Thursday’s close:
Crude Oil, United States Oil ETF (USO) fell below the lows of the previous 3 years, again confirming a major downtrend.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) whipsawed back down below its 50-day SMA, turning systematically bearish again.
Silver, iShares Silver Trust ETF (SLV) fell below its lows of the previous 19 months, thereby confirming its preexisting major bearish trend.
Silver/Gold ETFs Ratio (SLV/GLD) fell below its lows of the previous 20 months, reconfirming its major downtrend. Silver is more of an industrial metal, suggesting weakening demand in industries that actually make things.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below its lows of the previous 6 months, reconfirming its major downtrend and suggesting disinflation or deflation.
NASDAQ Composite/S&P 500 Relative Strength Ratio whipsawed back down below its 200-day SMA again.
The S&P 500 (SPX: 1,329.04) fell 2.81points or 0.21% on Thursday. SPX was down 1.39% at 2:30 p.m. ET before recovering most of that loss, mainly in the final 30 minutes. Media source cited speculation that the cancellation of an EU Summit press conference could mean a major development.
NYSE volume rose 18%, after falling on Tuesday’s and Wednesday’s rallies. Volume confirmed the price downturn, but volume did not confirm the previous 2-day price bounce.
With upside bounces smaller and briefer than declines, and on lighter volume, price, time, and volume confirm the dominance of selling pressure over buying pressure. The path of least resistance appears to be down for the stock market.
The following ETFs, ranked by Relative Strength, with the weakest at the bottom of the list, closed below their closing price lows of the previous 4 months:
Brazil Index, EWZ
Silver Trust iS, SLV
For extensive coverage of major global markets with illustrative charts, take a free trial for my weekly report —
click here.
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Equity Mutual Funds lost 6% in 2011, according to Lipper Research Services.
Hedge funds lost 5%, according to COO Connect.
Hedge funds suffered their second-worst year on record in 2011, according to an index maintained by Eurekahedge, an independent research firm that specializes in hedge fund data. Some of the world’s largest and best-known hedge funds suffered huge losses, down 20% to 50%.
But not all money managers were down in 2011; see:
Robert W. Colby Asset Management, Inc. (click here).
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Sentiment for Contrary Thinking
Investor sentiment data indicated alarming degrees of optimism and bullish complacency at the February to May 2012 market highs. That was bearish because when the majority of investors has been bullish for some time, 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 market mood always reverts to the mean. Some of the most recent data suggests that investors’ sentiment may be beginning to shift away from bullish complacency. The evidence is mixed, however, and there still is plenty of room for the pendulum of emotion to swing too far in the direction of bearish excess.
AAII Sentiment: There were 51.64% Bulls and 20.19% Bears, according to the AAII weekly survey reported on 2/9/12. This was the highest level of bullish sentiment in more than a year, since 52.34% Bulls on 1/13/11. As of 6/28/12, the AAII survey showed 28.67% Bulls and 44.37% Bears.
Investors Intelligence Sentiment: according to the Investors Intelligence weekly survey of stock market newsletter advisors, there were 38.7% Bulls and 24.7% Bears reported on 6/27/12. This represents a moderation in sentiment from 2012 extremes of 54.8% Bulls reported on 2/15/11 and 20.4% Bears reported on 5/9/12.
VIX Fear Index fell to 16.77 intraday on 6/21/12, its lowest level since 5/3/12. VIX fell from an intraday peak of 27.73 on 6/4/12. This large drop suggests a rapid shift from worried concern to 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
1440.24, high of 5/19/2008
1422.38, high of 4/2/2012
1415.32, high of 5/1/2012
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
1363.49, high of 6/19/2012
1362.93, Fibonacci 61.8% of April-June 2012 range
1357.38, low of 4/10/2012
1340.51, 50-day SMA
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
1329.05, high of 6/7/2012
The S&P 500 Composite Potential Support
1328.49, high of 5/22/2012
1326.19, Fibonacci 38.2% of April-June 2012 range
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
1298.71, 200-day SMA
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) price has had a normal, minor correction and remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA every day since 6/24/11. Support 124.09, 122.06, 120.60, 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. 127.34 and 130.38.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) price has had a normal, minor correction and remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA every day since 6/21/11. Support 107.51, 107.43, 105.85, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance 108.53 and 109.37.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) whipsawed back down below its 50-day SMA on 6/21/12, thereby turning systematically bearish again. JNK/LQD remains below its 200-day SMA. The 50-day SMA fell below the 200-day SMA on 6/1/12.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below its lows of the previous 6 months on 6/28/12, reconfirming its major downtrend and suggesting disinflation or deflation. TIP/IEF turned systematically bearish on 6/27/12. TIP/IEF is below its 50-day SMA, below its 200-day SMA, and the 50-day SMA crossed below the 200-day SMA on 6/27/12.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA. Support 22.38, 22.14, 21.89, 21.74, 21.58, 21.07, and 20.84. Resistance 23.02, 23.52, 25.84, 27.19, 28.97.
CRB Commodity Price Index fell below its lows of the previous 21 months intraday on 6/22/12, for another a bearish trend confirmation. Systematically, CRB remains bearish: below its 50-day SMA, below its 200-day SMA, and with the 50-day SMA below the 200-day SMA every day since 8/18/11.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) whipsawed back above its 50-day SMA on 6/25/12, thereby turning systematically neutral again. DBA is now above its 50-day SMA, below its 200-day SMAs, and the 50-day SMA has been consistently below the 200-day SMA every day since 8/8/11.
Crude Oil, United States Oil ETF (USO) fell below the lows of the previous 3 years on 6/28/12, again confirming a major downtrend. USO turned systematically bearish on 6/7/12, when the 50-day SMA fell below the 200-day SMA. USO remains below its 50-day and 200-day SMAs. Support 29.10, 26.28, and 22.74. Resistance 31.81, 32.80, 34.76, 35.19, 36.97, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) fell below its 50-day SMA on 6/20/12, turning systematically bearish again. GLD remains below its 200-day SMA, and its 50-day SMA remains below its 200-day SMA. Support: 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 159.20, 162.18, 163.20, 164.89, 166.57, 174.00, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) whipsawed back down below its 50-day SMA on 6/28/12, turning systematically bearish again. GDX/GLD remains below its 200-day SMA, and the 50-day SMA has remained bearishly below the 200-day SMA every day since 2/22/11.
Silver, iShares Silver Trust ETF (SLV) fell below its lows of the previous 19 months on 6/28/12, thereby confirming its preexisting major bearish trend. SLV remains systematically bearish: below its 50-day and 200-day SMAs, and with the 50-day SMA below the 200-day SMA every day since 10/27/11. Support 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 26.88, 28.26, 29.02, 30.52, 31.64, 32.34, 33.44, 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 20 months on 6/28/12, reconfirming its major downtrend. SLV/GLD remains systematically bearish: below its 50-day SMA, below its 200-day SMA, and the 50-day SMA has remained below the 200-day SMA every day since 8/30/11.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the previous 5 months on 6/8/12, reconfirming its major downtrend. JJC turned systematically bearish on 5/31/12, when the 50-day SMA crossed below the 200-day SMA. JJC fell below its 200-day SMA on 5/3/12 and fell below its 50-day SMA on 5/2/12. JJC remains far below its 2011 high at 61.69 and has underperformed the stock market since JJC peaked at 51.41 on 2/9/12. Given that “Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, this weakness may be suggesting rising doubts about prospects going forward.
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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
8.87% , HMA , HEALTH MGMT STK A
5.42% , THC , TENET HEALTHCARE
8.85% , WOR , WORTHINGTON INDS
2.78% , DGX , QUEST DIAG
10.59% , GNW , GENWORTH FINANCIAL
4.37% , MU.O , MICRON TECH
2.99% , LH , LAB CRP OF AMER
5.32% , X , US STEEL CORP
2.54% , SVU , SUPERVALU
5.45% , BBY , BEST BUY
3.37% , AM , AMER GREETINGS STK A
1.75% , COST , COSTCO WHOLESAL
0.59% , MVV , Ultra MidCap400 Double, MVV
4.89% , SNV , SYNOVUS
2.41% , ESRX , EXPRESS SCRIPTS
1.86% , PETM , PETsMART Inc
1.04% , PIC , Insurance, PIC
0.52% , UNH , UNITEDHEALTH GRP
1.52% , ITF , Japan LargeCap Blend TOPIX 150, ITF
2.21% , ZEUS , Olympic Steel, ZEUS
1.59% , PXE , Energy Exploration & Prod, PXE
1.07% , SNPS , Synopsys Inc
1.24% , LEG , LEGGETT & PLATT
1.65% , SWY , SAFEWAY
1.04% , MCK , MCKESSON CORP
1.59% , DPS , Dr Pepper Snapple Group
1.03% , PSQ , Short 100% QQQ, PSQ
1.44% , AVP , AVON
0.68% , IYT , Transportation Av DJ, IYT
1.61% , JNS , JANUS CAPITAL
1.60% , ABC , AMERISOURCEBERGN
0.56% , RFV , Value MidCap S&P 400, RFV
2.27% , KSS , KOHLS
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.93% , IGN , Networking, IGN
-5.17% , WLP , WELLPOINT HEALTH
-2.71% , AET , AETNA
-2.69% , CI , CIGNA
-1.46% , IGV , Software, IGV
-3.81% , CHKP , Check Point Software Technologies Ltd
-1.07% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
-3.27% , VFC , VF
-2.09% , LSI , LSI LOGIC
-3.04% , SIL , Silver Miners Global X, SIL
-2.62% , C , CITIGROUP
-5.41% , RSH , RADIOSHACK
-3.14% , OMX , OFFICEMAX INC., OMX
-2.45% , JPM , J P MORGAN CHASE
-2.98% , PAYX , PAYCHEX
-2.79% , FDO , FAMILY DLR STRS
-3.19% , ROST , Ross Stores Inc
-2.38% , ODP , OFFICE DEPOT
-3.57% , EBAY , EBAY
-1.93% , NIHD , NII Holdings, Inc.
-0.50% , JKE , Growth LargeCap iS M, JKE
-0.70% , SLE , SARA LEE
-2.00% , HON , HONEYWELL INTL
-3.03% , TER , TERADYNE
-2.38% , PH , PARKER HANNIFIN
-1.91% , SLV , Silver Trust iS, SLV
-2.45% , CTSH , Cognizant Technology Solutions
-2.06% , PXQ , Networking, PXQ
-2.03% , MTK , Technology MS sT, MTK
-2.10% , UTX , UNITED TECH
-2.15% , QLD , Ultra QQQ Double, QLD
-2.01% , PBE , Biotech & Genome, PBE
-2.14% , NEM , NEWMONT MINING
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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% Japan Index, EWJ
1.14% Spain Index, EWP
1.09% REIT VIPERs, VNQ
1.06% Metals & Mining SPDR, XME
1.03% REIT Wilshire, RWR
0.98% Homebuilders SPDR, XHB
0.98% Realty Cohen & Steers, ICF
0.87% Italy Index, EWI
0.84% Thailand MSCI iS, THD
0.84% Real Estate US DJ, IYR
0.75% Energy VIPERs, VDE
0.69% Energy SPDR, XLE
0.68% Energy DJ, IYE
0.68% Transportation Av DJ, IYT
0.66% Pacific VIPERs, VPL
0.60% Energy Global, IXC
0.57% Value MidCap S&P 400 B, IJJ
0.52% Energy & Nat Res iS GS, IGE
0.51% Water Resources, PHO
0.50% Singapore Index, EWS
0.49% Value MidCap Russell, IWS
0.47% Value SmallCap VIPERS, VBR
0.44% Consumer Staples SPDR, XLP
0.40% Capital Markets KWB ST, KCE
0.35% Utilities SPDR, XLU
0.35% Bear, Short S&P 500, SH
0.35% Value SmallCap S&P 600 B, IJS
0.32% Bond, 10 Year Treasury, IEF
0.31% Preferred Stock iS, PFF
0.30% MidCap S&P 400 SPDRs, MDY
0.30% MidCap S&P 400 iS, IJH
0.29% Value EAFE MSCI, EFV
0.29% Dividend DJ Select, DVY
0.27% Utilities VIPERs, VPU
0.26% Basic Materials DJ US, IYM
0.25% Value SmallCap Russell 2000, IWN
0.25% Bond, 20+ Years Treasury, TLT
0.23% Growth EAFE MSCI, EFG
0.22% Dividend High Yield Equity PS, PEY
0.21% Dividend International, PID
0.21% EAFE Index, EFA
0.18% Austria Index, EWO
0.18% Agriculture DB PS, DBA
0.15% Bond, Corp, LQD
0.15% Mexico Index, EWW
0.14% Small Cap EAFE MSCI iS, SCZ
0.14% Bond Muni ATM-Free S&P iS, MUB
0.12% Small Cap VIPERs, VB
0.12% Bond, Aggregate, AGG
0.11% Financial Preferred, PGF
0.09% Belgium Index, EWK
0.09% Dividend SPDR, SDY
0.08% Value 1000 Russell, IWD
0.07% Value VIPERs, VTV
0.05% Telecom DJ US, IYZ
0.04% Bond, TIPS, TIP
0.04% LargeCap Blend S&P=Weight R, RSP
0.04% MidCap Russell, IWR
0.03% Financials VIPERs, VFH
0.03% Materials SPDR, XLB
0.02% Bond Treasury Short-Term iS, SHV
0.01% Bond, 1-3 Year Treasury, SHY
0.00% EMU Europe Index, EZU
-0.01% Bond, High-Yield Corporate, HYG
-0.02% Financial DJ US, IYF
-0.03% SmallCap S&P 600, IJR
-0.03% Value S&P 500 B, IVE
-0.05% Bond, High-Yield Junk, JNK
-0.05% Dividend Appreciation Vipers, VIG
-0.05% France Index, EWQ
-0.06% India Earnings WTree, EPI
-0.07% Financial SPDR, XLF
-0.07% Malaysia Index, EWM
-0.08% Global ex US ACWI iS, ACWX
-0.09% Industrial SPDR, XLI
-0.10% Growth MidCap 400 B, IJK
-0.10% Value LargeCap Dynamic PS, PWV
-0.12% Growth BARRA Small Cap 600, IJT
-0.12% Bond Ex-US Treas, BWX
-0.12% Netherlands Index, EWN
-0.15% Bond EmrgMkt JPM iS, EMB
-0.15% Europe 350 S&P Index, IEV
-0.17% DIAMONDS (DJIA), DIA
-0.17% SmallCap Russell 2000, IWM
-0.17% Global 100, IOO
-0.21% Blend Total Market VIPERs, VTI
-0.21% Frontier Markets Guggenheim , FRN
-0.22% LargeCap 1000 R, IWB
-0.24% S&P 500 iS LargeCap Blend, IVV
-0.25% Taiwan Index, EWT
-0.26% Growth SmallCap VIPERs, VBK
-0.28% LargeCap VIPERs, VV
-0.29% S&P 500 SPDRs LargeCap Blend, SPY
-0.29% Growth SmallCap R 2000, IWO
-0.31% Switzerland Index, EWL
-0.35% Microcap Russell, IWC
-0.37% European VIPERs, VGK
-0.37% LargeCap Blend Russell 3000, IWV
-0.37% Hong Kong Index, EWH
-0.39% Growth S&P 500/BARRA, IVW
-0.39% LargeCap Blend S&P 100, OEF
-0.42% Emerging VIPERs, VWO
-0.43% China 25 iS, FXI
-0.44% Emerging 50 BLDRS, ADRE
-0.45% Health Care SPDR, XLV
-0.47% Growth 1000 Russell, IWF
-0.48% Emerging Markets, EEM
-0.49% Brazil Index, EWZ
-0.53% Latin Am 40, ILF
-0.53% Semiconductor SPDR, XSD
-0.54% Growth MidCap Russell, IWP
-0.56% Growth VIPERs, VUG
-0.56% Consumer Discretionary SPDR, XLY
-0.56% United Kingdom Index, EWU
-0.57% South Korea Index, EWY
-0.59% Chile MSCI iS, ECH
-0.59% Canada Index, EWC
-0.63% Semiconductor iS IGW, SOXX
-0.65% Financial Services DJ, IYG
-0.66% Pacific ex-Japan, EPP
-0.67% India PS, PIN
-0.82% Technology SPDR, XLK
-0.83% Indonesia MV, IDX
-0.88% Turkey MSCI iS, TUR
-0.90% Germany Index, EWG
-0.93% Networking, IGN
-0.93% Technology DJ US, IYW
-0.98% Sweden Index, EWD
-1.03% Australia Index, EWA
-1.07% Info Tech VIPERs, VGT
-1.08% Commodity Tracking, DBC
-1.11% South Africa Index, EZA
-1.11% QQQ Nasdaq 100 Trust, QQQ
-1.16% Gold Shares S.T., GLD
-1.35% Russia MV, RSX
-1.54% Oil Fund PowerShares, DBO
-1.55% China LargeCap Growth G D H USX PS, PGJ
-1.83% WilderHill Clean Energy PS, PBW
-1.91% Silver Trust iS, SLV
-2.32% Oil, Crude, U.S. Oil Fund, USO
-2.72% Biotech SPDR, XBI
