The U.S. Stock Market opened higher and continued to rise for the first 45 minutes on Monday–but it surrendered most of its gain in the afternoon. The S&P 500 Composite Index (SPX: 1,614.96) finished higher by 0.54%, after testing but failing to overcome resistance at its 50-day SMA, now at 1622.91.
NYSE Volume fell 35% from Friday’s level as the S&P 500 price reversed to the upside. As old hands always say, “Volume goes with the trend,” or confirms the trend. So, falling volume on a price advance is bearish, and rising volume on a price decline is bearish. The Cumulative Up-Down Volume Line on the NYSE turned upward but remained below its 50-day SMA.
The Cumulative Daily Advance-Decline Line on the NYSE finished higher but remains below its 50-day SMA.
On from the low of 1,560.33 on 6/14/13 to the high of 1,626.61 on 7/1/13, the S&P 500 retraced typical 50% of its recent decline from 5/22/13 to 6/24/13, based on intraday extreme prices. That would be a normal retracement for a counter trend bounce on declining volume.
On Monday, 6/24/13, the S&P 500 fell to its lowest closing price in 8 weeks, since 4/22/13. It fell 5.76% from 5/21/13 to 6/24/13, based on closing prices–the largest down wave since last September-November. It also was the longest in time, lasting 24 trading days. The magnitude and duration of the price decline is probably telling us that this time is different from all previous minor price corrections since last November.
The bullish majority had been taking encouragement from the SPX and other major stock price indexes holding support at or near their widely-followed 50-day SMAs. Now that that support not only has been violated but also has become resistance, SPX could fall further to test its 200-day SMA, now at 1511.35 and rising a fraction of a point every day.
A wide variety of technical oscillators previously had given early warning after losing upside momentum and showing persistent bearish divergences over periods of weeks and months. Now, it seems quite apparent that there has been considerable technical damage to the previously bullish stock market trend. This damage probably signals a significant downside correction, or possibly worse. In any case, caution seems warranted.
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Stock Market Indicators
The Dow Theory confirmed a Secondary Reaction on 6/20-6/21/13, when the Dow-Jones Transportation Average and the Dow-Jones Industrial Average both closed below their price lows of the previous 7 weeks. Previously, on 5/28/13, the Dow Theory warned of a non-confirmation bearish divergence when the Industrial Average rose to a higher high without confirmation by the Transportation Average, which made a lower high. A Secondary Reaction is often significant in extent and duration, possibly retracing a substantial fraction of the previous move over a period lasting several months.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) is currently systematically neutral, thanks to sideways movement since 4/18/13. Longer term, for more than a year from 4/10/12 to 4/18/13, QQQ underperformed SPY. Given that longer term trends have more proven staying power than shorter term trends, there is a very good chance that the longer term downtrend will resume.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below the lows of the previous 4 years on 6/20/13, again reconfirming its major downtrend. BKF/SPY turned systematically bearish on 3/27/13, when the 50-day SMA crossed below the 200-day SMA. BKF/SPY fell below its 50-day SMA on 2/4/13 and fell below its 200-day SMA on 2/19/13. Price peaked at 42.29 on 2/1/13 and fell to a 20-month low on 6/24/13.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below the lows of the previous 4 years on 6/20/13, reconfirming its preexisting major downtrend. EEM/SPY turned systematically bearish on 3/20/13, when the 50-day SMA fell below the 200-day SMA. Price peaked at 45.34 on 1/2/13 and fell to a 19-month low on 6/24/13, confirming its bearish major trend.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below the lows of the previous 10 months on 6/27/13. The EFA/SPY 50-day SMA fell below the 200-day SMA on 5/24/13, thereby turning systematically bearish (from neutral).
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) is currently systematically bearish. OEF/SPY has been in a down trend since 9/24/12. 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) is currently systematically bullish. IWM/SPY has been rising since 5/1/13. Absolute price has sagged moderately lower since stalling out on 5/22/13.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) is currently systematically bullish. MDY/SPY crossed back above its 50-day SMA on 7/1/13. Absolute price has stalled out since peaking on 5/22/13 and fell below its 50-day SMA on 6/20/13, thereby turning systematically neutral (from bullish).
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price whipsawed back above its 50-day SMA on 6/26/13, thereby turning systematically bullish (from neutral). Longer term, UUP has been consolidating secular trend losses since bottoming at 20.84 on 5/4/11. Support 21.82, 21.53, 21.07, and 20.84. Resistance 22.96, 22.69, 23.14, 23.52, 25.84, 27.19, and 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price remains systematically bearish. Price has been trending down since peaking on 3/4/11.
Crude Oil, United States Oil ETF (USO) price has been consolidating losses in a choppy, sideways trend for 4 years, whipsawing around both the 50-day SMA and 200-day SMA. Support 32.53, 32.12, 30.79, 29.02, 26.28, and 22.74. Resistance 35.53, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) price trend remains systematically bearish. Price fell below its lows of the previous 2 years on 6/28/13, thereby reconfirming its preexisting major bearish trend. GLD has been down trending since peaking at 185.85 on 9/6/11. Support: 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 12/27/12, when the 50-day SMA crossed below the 200-day SMA. Longer term, GDX/GLD has remained mostly bearish for more than 6 years, since 9/5/06.
Silver, iShares Silver Trust ETF (SLV) price trend remains systematically bearish. Price fell below its lows of the previous 2 years on 6/27/13, again reconfirming its preexisting major bearish trend. The trend has been bearish since price peaked at 48.35 on 4/28/11. Support 16.73, 14.37, 12.27, 11.64, and 8.45. Resistance: 22.65, 23.70, 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) fell below its lows of the previous 2 years on 6/26/13, again reconfirming its major downtrend. SLV/GLD remains systematically bearish. SLV has underperformed GLD since SLV price peaked at 48.35 on 4/28/11.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the previous 2 years on 6/24/13, again reconfirming its major downtrend. The JJC price trend has been bearish since price peaked at 61.69 on 2/14/11. “Dr. Copper” is widely accepted as one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, so price weakness in Copper implies a weak economic outlook.
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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
8.82% , BBY , BEST BUY
1.09% , IYJ , Industrial LargeCap Blend DJ US, IYJ
1.12% , IJJ , Value MidCap S&P 400 B, IJJ
4.29% , XBI , Biotech SPDR, XBI
0.88% , IYE , Energy DJ, IYE
0.54% , IYH , Healthcare DJ, IYH
0.67% , IYW , Technology DJ US, IYW
4.06% , LXK , LEXMARK INTL STK A
3.57% , PBE , Biotech & Genome, PBE
1.28% , IJS , Value SmallCap S&P 600 B, IJS
1.84% , IJT , Growth BARRA Small Cap 600, IJT
1.12% , SSO , Ultra S&P500 Double, SSO
0.68% , IYC , Consumer Cyclical DJ, IYC
0.60% , FPX , IPOs, First Tr IPOX-100, FPX
1.21% , JKL , Value SmallCap iS M, JKL
2.32% , WAT , WATERS
0.88% , IYM , Basic Materials DJ US, IYM
1.08% , RPV , Value S&P 500, RPV
4.47% , GNW , GENWORTH FINANCIAL
3.90% , RYAAY , Ryanair Holdings plc
6.25% , NFLX , Netflix, NFLX
0.83% , IVV , S&P 500 iS LargeCap Blend, IVV
0.86% , IXN , Technology Global, IXN
1.03% , PWB , Lg Cap Growth PSD, PWB
1.18% , JKI , Value MidCap iS M, JKI
1.02% , PJP , Pharmaceuticals, PJP
2.36% , MVV , Ultra MidCap400 Double, MVV
1.49% , VB , Small Cap VIPERs, VB
4.21% , PTEN , Patterson-UTI Energy Inc
3.46% , INTU , INTUIT
1.38% , CTXS , CITRIX SYSTEMS
1.48% , ADBE , ADOBE SYS
1.08% , VIS , Industrials VIPERs, VIS
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Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.26% , IDU , Utilities DJ, IDU
-0.94% , EWS , Singapore Index, EWS
-0.75% , MDP , MEREDITH
-2.27% , TE , TECO ENERGY
-0.63% , APA , APACHE
-0.66% , AM , AMER GREETINGS STK A
-1.85% , MON , MONSANTO
-0.57% , JPM , J P MORGAN CHASE
-0.17% , PGF , Financial Preferred, PGF
-0.11% , DELL , DELL
-0.35% , NI , NISOURCE
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
4.29% , Biotech SPDR, XBI
1.95% , Spain Index, EWP
1.84% , SmallCap Growth S&P 600 iS, IJT
1.80% , SmallCap Growth Russell 2000 iS, IWO
1.70% , Gold Shares S.T., GLD
1.67% , Growth SmallCap VIPERs, VBK
1.67% , WilderHill Clean Energy PS, PBW
1.64% , Sweden Index, EWD
1.63% , SmallCap Blend Russell 2000 iS, IWM
1.61% , Italy Index, EWI
1.55% , SmallCap Blend S&P 600 iS, IJR
1.49% , Small Cap VIPERs, VB
1.47% , MidCap S&P 400 SPDRs, MDY
1.43% , Oil, Crude, U.S. Oil Fund, USO
1.39% , Microcap Russell, IWC
1.37% , Value SmallCap VIPERS, VBR
1.37% , Growth MidCap Russell, IWP
1.36% , India Earnings WTree, EPI
1.29% , MidCap Blend S&P 400 iS, IJH
1.28% , SmallCap Value S&P 600 iS, IJS
1.25% , Japan Index, EWJ
1.24% , Transportation Av DJ, IYT
1.23% , Austria Index, EWO
1.23% , European VIPERs, VGK
1.19% , United Kingdom Index, EWU
1.19% , Europe 350 S&P Index, IEV
1.15% , Mexico Index, EWW
1.12% , SmallCap Value Russell 2000 iS, IWN
1.12% , MidCap Value S&P 400 iS, IJJ
1.11% , South Korea Index, EWY
1.10% , SmallCap Blend EAFE MSCI iS, SCZ
1.08% , EMU Europe Index, EZU
1.07% , France Index, EWQ
1.04% , MidCap Growth S&P 400 iS, IJK
1.03% , MidCap Russell, IWR
1.03% , India PS, PIN
1.02% , Homebuilders SPDR, XHB
1.01% , Netherlands Index, EWN
1.01% , Industrial SPDR, XLI
1.00% , LargeCap Growth Russell 1000 iS, IWF
0.97% , Growth EAFE MSCI, EFG
0.94% , Foreign LargeCap EAFE MSCI iS, EFA
0.94% , Energy & Nat Res iS GS, IGE
0.88% , LargeCap Blend S&P=Weight R, RSP
0.88% , Basic Materials DJ US, IYM
0.88% , Energy DJ, IYE
0.86% , Pacific VIPERs, VPL
0.85% , Oil Fund PowerShares, DBO
0.83% , Blend Total Market VIPERs, VTI
0.83% , Value MidCap Russell, IWS
0.83% , LargeCap Blend S&P 500 iS, IVV
0.82% , Growth VIPERs, VUG
0.82% , Water Resources, PHO
0.81% , Metals & Mining SPDR, XME
0.78% , Dividend SPDR, SDY
0.77% , Info Tech VIPERs, VGT
0.76% , Value EAFE MSCI, EFV
0.73% , Consumer Staples SPDR, XLP
0.73% , LargeCap Growth S&P 500 iS, IVW
0.73% , Capital Markets KWB ST, KCE
0.73% , Dividend Appreciation Vipers, VIG
0.72% , Energy SPDR, XLE
0.71% , LargeCap Blend S&P 100, OEF
0.70% , Financial Services DJ, IYG
0.69% , Consumer Discretionary SPDR, XLY
0.67% , Technology DJ US, IYW
0.66% , Global ex U.S. LargeCap Blend, ACWX
0.66% , LargeCap Value S&P 500 iS, IVE
0.64% , Dividend International, PID
0.64% , Global LargeCap Blend MSCI iS, ACWI
0.64% , Semiconductor SPDR, XSD
0.64% , Commodity Tracking, DBC
0.64% , Value VIPERs, VTV
0.62% , QQQ Nasdaq 100 Trust, QQQ
0.61% , Germany Index, EWG
0.60% , Bond, Muni S&P ATM-Free iS, MUB
0.60% , LargeCap VIPERs, VV
0.59% , Switzerland Index, EWL
0.59% , Global 100, IOO
0.59% , Materials SPDR, XLB
0.59% , S&P 500 SPDRs LargeCap Blend, SPY
0.59% , DIAMONDS (DJIA), DIA
0.57% , Energy Global, IXC
0.55% , Energy VIPERs, VDE
0.55% , Financial DJ US, IYF
0.54% , Technology SPDR, XLK
0.53% , Taiwan Index, EWT
0.49% , LargeCap Value Russell 1000 iS, IWD
0.48% , Russia MV, RSX
0.45% , Financials VIPERs, VFH
0.37% , Dividend High Yield Equity PS, PEY
0.36% , Dividend U.S. DJ iS, DVY
0.34% , South Africa Index, EZA
0.34% , China LargeCap Growth G D H USX PS, PGJ
0.33% , Financial SPDR, XLF
0.33% , Latin Am 40, ILF
0.32% , Value LargeCap Dynamic PS, PWV
0.31% , Emerging Markets MSCI iS, EEM
0.31% , Bond, Emerging Mkt JPM iS, EMB
0.28% , Networking, IGN
0.28% , LargeCap Blend Russell 1000 iS, IWB
0.27% , Health Care SPDR, XLV
0.27% , Canada Index, EWC
0.25% , Dividend ex-U.S. DJ iS, IDV
0.22% , LargeCap Blend Russell 3000 iS, IWV
0.20% , Emerging 50 BLDRS, ADRE
0.17% , Emerging VIPERs, VWO
0.15% , Belgium Index, EWK
0.14% , Bond Ex-US Treas, BWX
0.02% , Bond, 1-3 Year Treasury, SHY
0.02% , Bond Treasury Short-Term iS, SHV
0.01% , Bond, High Yield Corp iBoxx iS, HYG
0.01% , Bond, TIPS U.S. Treasury iS, TIP
0.00% , Malaysia Index, EWM
-0.03% , Bond, 20+ Years Treasury, TLT
-0.05% , Bond, Intermediate US Aggregate iS, AGG
-0.06% , Bond, Long-Term Corp iBoxx iS, LQD
-0.07% , Indonesia MV, IDX
-0.10% , Bond, 10 Year Treasury, IEF
-0.10% , Bond, High-Yield Junk, JNK
-0.12% , China 25 iS, FXI
-0.13% , Semiconductor iS IGW, SOXX
-0.15% , Telecom DJ US, IYZ
-0.16% , Brazil Index, EWZ
-0.17% , Financial Preferred, PGF
-0.21% , Silver Trust iS, SLV
-0.22% , REIT VIPERs, VNQ
-0.24% , Frontier Markets Guggenheim , FRN
-0.25% , Hong Kong Index, EWH
-0.35% , Pacific ex-Japan, EPP
-0.41% , Preferred Stock iS, PFF
-0.42% , REIT Wilshire, RWR
-0.44% , Agriculture DB PS, DBA
-0.50% , Thailand MSCI iS, THD
-0.53% , Real Estate US DJ iS, IYR
-0.53% , Australia Index, EWA
-0.54% , Turkey MSCI iS, TUR
-0.57% , Realty Cohen & Steers, ICF
-0.94% , Singapore Index, EWS
-0.98% , Bear, Short S&P 500, SH
-1.17% , Chile MSCI iS, ECH
-1.25% , Utilities SPDR, XLU
-1.33% , Utilities VIPERs, VPU
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The S&P 500 Composite Potential Resistance
1687.18, high of 5/22/2013
1674.21, high of 5/28/2013
1654.19, high of 6/18/2013
1622.91, 50-day SMA
The S&P 500 Composite Potential Support
1606.04, Fib 23.6% of Nov-May 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
1511.35, 200-day SMA
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
