Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) plunged below the lows of the previous 7 years on 11/9/11, reconfirming the preexisting major Bear trend. The 50-day SMA has remained bearishly below the 200-day SMA of the EFA/SPY Ratio every day since 1/14/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) whipsawed back below its 50-day SMA on 11/9/11, thereby turning bearish again. The 50-day SMA remains below the 200-day SMA.
Financial Sector Relative Strength Ratio (XLF/SPY) fell below its 50-day SMA on 11/9/11 and is clearly bearish. The 50-day SMA has remained below the 200-day SMA consistently every day since 6/30/2010, suggesting a persistent Bear trend.
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) rose above the highs of the previous 5 trading days on 11/9/11, reconfirming its preexisting bullish trend. As I noted in my report of 11/9/11, TLT tested and held its 50-day SMA and remains well above its 200-day SMA.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below its 50-day SMA on 11/9/11 and is clearly bearish again. Yesterday, I noted that JNK/LQD had lost upside momentum since peaking on 10/24/11.
U.S. dollar ETF (UUP) broke out above the highs of the previous 4 weeks and above 20-day, 50-day, and 200-day SMAs on 11/9/11, signaling a significant uptrend.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below the lows of the previous 5 trading days on 11/9/11–this following a break below the previous 14 trading days on 11/1/11 and a break below the lows of the previous 10 months on 10/3/11. DBA remains below 20-day, 50-day, and 200-day SMAs. DBA is bearish in all time frames.
Crude Oil, United States Oil ETF (USO) suffered an Outside Day Bearish Reversal on 11/9/11 after testing and failing at its 200-day SMA. The 50-day SMA remains far below the 200-day SMA, implying a neutral medium-term trend.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price fell below the lows of the previous 10 trading days and its 20-day SMA on 11/9/11, suggesting a short-term price downtrend. JJC fell below its 50-day SMA on 10/31/11, returning to its persistent medium-term bearish trend after a brief bounce. JJC broke down below the lows of the previous 14 months on 10/5/11, confirming a bearish long-term major trend. Major trend weakness in Copper suggests serious concerns about the economic outlook.
The S&P 500 Composite (SPX: 1,229.10) fell 46.82 points or 3.67% on Wednesday, November 9, 2011, thereby surrendering most of its hard won gains over the previous 5 trading days since the low on 11/1/11.
Stock prices opened lower on big downside gaps and added significantly to opening losses in the early afternoon.
Momentum indicators are bearish. The popular RSI (14) for SPX fell below its lows of the previous 4 weeks. MACD (12/26/9) crossed below its Signal Line for the first time in 7 weeks.
Trading volume on the NYSE rose 20% above Tuesday’s pace to its highest level since 11/1/11, which also saw a big price drop.
When light volume on rising price days is much less than heavy volume on falling price days, as it has for months now, there is serious selling pressure and the market is vulnerable to price decline.
The high price volatility of recent months is typical of bear markets. In contrast, bull markets are much less volatile.
Longer-term indicators still are far from confirming any change in the Bearish Primary Tide Trend. For example, 50-day SMAs are well below 200-day SMAs for most stocks and indexes.
Ripples and Secondary Reactions opposite to the Dow Theory Primary Tide Trend lure short-term traders into trying to trade a bounce. Price corrections against the larger trends are normal and expected, of course, but playing 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.
The Dow Theory signaled a Primary Tide Bear Market on 8/2/11, when both Dow-Jones Averages, Industrial and Transportation, closed below their closing price lows of the previous 11 months. This Bear Market was confirmed on 10/3/11 by lower closing price lows for both Averages. Both Averages would have to close above their closing price highs for the year to indicate a “Turn in the Tide”.
A Dow Theory Primary Tide Bear Market is a powerful beast that must not be underestimated. The median Dow Theory Primary Tide Bear Market in history lasts 16 months and takes stock prices down 34%. In a Dow Theory Primary Tide Bear Market, the big surprises usually 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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Stock Market Indicators
Advisory Service Sentiment: There were 44.2% Bulls versus 34.7% Bears as of 11/9/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio rose to 1.27, up from a 2-year low of 0.74 on 10/12/11. The Bull/Bear Ratio has been below its 20-year median of 1.56 and mean of 1.64 for 12 consecutive weeks, since 8/24/11.
The S&P 500 Composite (SPX: 1,229.10) 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
1307.28, Fibonacci 78.6% of 2011 range
1292.66, high of 10/27/11
1273.05, 200-day SMA
1263.21, high of 11/3/2011
1258.07, low of 6/16/11
1257.58, Fibonacci 61.8% of 2011 range
1256.55, high of 10/24/11
1249.05, low of 3/16/11
1246.73, high of 12/13/10
1238.81, Fibonacci 78.6% of 1,576.09 high
1234.81, low of 11/3/11
S&P 500 Composite (SPX: 1,229.10) Potential Support
1222.68, Fibonacci 50% of 2011 range
1221.06, low of 10/26/2011
1215.42, low of 11/1/2011
1204.49, Fibonacci 23.6% of 2009-11 range
1190.58, low of 10/13/2011
1187.77, Fibonacci 38.2% of 2011 range
1144.38, Fibonacci 23.6% of 2011 range
1101.73, Fibonacci 38.2% of 2009-11 range
1074.77, low of 10/4/2011
1039.70, low of 8/27/10
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
1018.69, Fibonacci 50% of 2009-11 range
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
935.64, Fibonacci 61.8% of 2009-11 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
817.40, Fibonacci 78.6% of 2009-11 range
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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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
4.45% , MYY , Short 100% MidCap 400, MYY
8.61% , MZZ , Short 200% MidCap 400 PS, MZZ
6.33% , DXD , Short 200% Dow 30 PS, DXD
6.89% , QID , Short 200% QQQ PS, QID
3.74% , SH , Short 100% S&P 500, SH
7.18% , SDS , Short 200% S&P 500 PS, SDS
2.07% , TLT , Bond, 20+ Years Treasury, TLT
1.42% , BBY , BEST BUY
0.89% , IEF , Bond, 10 Year Treasury, IEF
1.38% , TLH , Bond 10-20 Year US Treas, TLH
0.43% , ODP , OFFICE DEPOT
0.02% , SHY , Bond, 1-3 Year Treasury, SHY
0.13% , GVI , Bond Interm U.S. Gov, GVI
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-3.65% , IWZ , Growth LargeCap Russell 3000, IWZ
-5.31% , EIS , Israel MSCI iS, EIS
-5.72% , IXG , Financials Global LargeCap Value, IXG
-5.93% , PIN , India PS, PIN
-15.38% , CSC , COMPUTER SCIENCE
-5.14% , IGV , Software, IGV
-7.69% , ADBE , ADOBE SYS
-3.62% , JKI , Value MidCap iS M, JKI
-2.95% , VHT , Health Care VIPERs, VHT
-5.44% , PSI , Semiconductors, PSI
-4.28% , PSTL , Steel Global PS ETF, PSTL
-4.48% , PKB , Building & Construction, PKB
-4.62% , ADRU , Europe 100 BLDRS, ADRU
-0.63% , IAH , Internet Architecture H, IAH
-6.62% , EZA , South Africa Index, EZA
-4.47% , IDX , Indonesia MV, IDX
-3.71% , JKF , Value LargeCap iS M, JKF
-4.18% , JKJ , SmallCap Core iS M, JKJ
-3.72% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
-8.80% , ZEUS , Olympic Steel, ZEUS
-6.34% , DDM , Ultra Dow30 Double, DDM
-9.35% , ASH , ASHLAND
-3.99% , RPG , Growth S&P 500, RPG
-8.47% , ADSK , AUTODESK
-3.62% , SWH , Software H, SWH
-3.70% , JKE , Growth LargeCap iS M, JKE
-2.31% , BDH , Broadband H, BDH
-4.32% , IYE , Energy DJ, IYE
-5.65% , EWU , United Kingdom Index, EWU
-4.79% , IWN , Value SmallCap Russell 2000, IWN
-6.84% , ATI , ALLEGHENY TECH
-9.41% , ETFC , E*TRADE FINANCIAL
-4.69% , IWC , Microcap Russell, IWC
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.07% Bond, 20+ Years Treasury, TLT
0.89% Bond, 10 Year Treasury, IEF
0.25% Bond Muni ATM-Free S&P iS, MUB
0.17% Bond, Aggregate, AGG
0.02% Bond, 1-3 Year Treasury, SHY
-0.01% Bond Treasury Short-Term iS, SHV
-0.02% Bond, TIPS, TIP
-0.26% Bond, Corp, LQD
-0.70% Bond EmrgMkt JPM iS, EMB
-0.84% Gold Shares S.T., GLD
-1.15% Oil, Crude, U.S. Oil Fund, USO
-1.41% Oil Fund PowerShares, DBO
-1.43% Preferred Stock iS, PFF
-1.63% Bond, High-Yield Junk, JNK
-1.77% Bond Ex-US Treas, BWX
-1.83% Financial Preferred, PGF
-1.86% Japan Index, EWJ
-2.12% Bond, High-Yield Corporate, HYG
-2.18% Utilities SPDR, XLU
-2.18% Agriculture DB PS, DBA
-2.21% Commodity Tracking, DBC
-2.34% Consumer Staples SPDR, XLP
-2.38% Chile MSCI iS, ECH
-2.38% Utilities VIPERs, VPU
-2.65% Silver Trust iS, SLV
-2.88% Health Care SPDR, XLV
-2.89% Telecom DJ US, IYZ
-2.90% Dividend DJ Select, DVY
-2.99% Frontier Markets Guggenheim , FRN
-3.20% Biotech SPDR, XBI
-3.21% DIAMONDS (DJIA), DIA
-3.22% Dividend High Yield Equity PS, PEY
-3.26% Pacific VIPERs, VPL
-3.27% Dividend SPDR, SDY
-3.33% Dividend Appreciation Vipers, VIG
-3.41% LargeCap Blend S&P 100, OEF
-3.47% Value LargeCap Dynamic PS, PWV
-3.47% Technology SPDR, XLK
-3.50% Growth 1000 Russell, IWF
-3.52% QQQ Nasdaq 100 Trust, QQQ
-3.55% Growth S&P 500/BARRA, IVW
-3.57% Consumer Discretionary SPDR, XLY
-3.60% Malaysia Index, EWM
-3.60% LargeCap 1000 R, IWB
-3.63% Technology DJ US, IYW
-3.69% Growth VIPERs, VUG
-3.69% S&P 500 iS LargeCap Blend, IVV
-3.69% S&P 500 SPDRs LargeCap Blend, SPY
-3.71% Info Tech VIPERs, VGT
-3.71% LargeCap VIPERs, VV
-3.78% Value VIPERs, VTV
-3.81% Blend Total Market VIPERs, VTI
-3.81% Value S&P 500 B, IVE
-3.84% Value 1000 Russell, IWD
-3.85% LargeCap Blend Russell 3000, IWV
-3.88% Industrial SPDR, XLI
-3.88% Transportation Av DJ, IYT
-3.91% Value MidCap Russell, IWS
-3.94% Canada Index, EWC
-3.95% Networking, IGN
-3.96% MidCap Russell, IWR
-4.05% Dividend International, PID
-4.06% Growth MidCap Russell, IWP
-4.08% Taiwan Index, EWT
-4.11% LargeCap Blend S&P=Weight R, RSP
-4.16% Growth BARRA Small Cap 600, IJT
-4.17% Mexico Index, EWW
-4.19% Value MidCap S&P 400 B, IJJ
-4.32% Energy DJ, IYE
-4.35% Energy Global, IXC
-4.35% Growth MidCap 400 B, IJK
-4.35% MidCap S&P 400 iS, IJH
-4.38% Small Cap VIPERs, VB
-4.39% Small Cap EAFE MSCI iS, SCZ
-4.40% Growth SmallCap VIPERs, VBK
-4.41% Semiconductor iS IGW, SOXX
-4.42% MidCap S&P 400 SPDRs, MDY
-4.42% Energy SPDR, XLE
-4.42% SmallCap S&P 600, IJR
-4.45% Energy VIPERs, VDE
-4.47% Indonesia MV, IDX
-4.49% Value SmallCap VIPERS, VBR
-4.49% Real Estate US DJ, IYR
-4.49% Energy & Nat Res iS GS, IGE
-4.57% REIT VIPERs, VNQ
-4.62% Emerging 50 BLDRS, ADRE
-4.65% Realty Cohen & Steers, ICF
-4.66% REIT Wilshire, RWR
-4.68% Global 100, IOO
-4.69% Microcap Russell, IWC
-4.71% Singapore Index, EWS
-4.73% Value SmallCap S&P 600 B, IJS
-4.77% SmallCap Russell 2000, IWM
-4.79% Growth SmallCap R 2000, IWO
-4.79% Value SmallCap Russell 2000, IWN
-4.80% Switzerland Index, EWL
-4.82% Belgium Index, EWK
-4.83% Homebuilders SPDR, XHB
-4.87% Materials SPDR, XLB
-4.88% China LargeCap Growth G D H USX PS, PGJ
-4.93% Financial DJ US, IYF
-4.96% Silver Miners Global X, SIL
-5.01% Growth EAFE MSCI, EFG
-5.03% Latin Am 40, ILF
-5.05% Australia Index, EWA
-5.09% Basic Materials DJ US, IYM
-5.13% EAFE Index, EFA
-5.14% Brazil Index, EWZ
-5.17% Financials VIPERs, VFH
-5.19% Water Resources, PHO
-5.19% Global ex US ACWI iS, ACWX
-5.22% Semiconductor SPDR, XSD
-5.25% Pacific ex-Japan, EPP
-5.28% Hong Kong Index, EWH
-5.28% Value EAFE MSCI, EFV
-5.30% WilderHill Clean Energy PS, PBW
-5.42% China 25 iS, FXI
-5.44% Financial SPDR, XLF
-5.49% Emerging VIPERs, VWO
-5.54% India Earnings WTree, EPI
-5.60% Thailand MSCI iS, THD
-5.65% United Kingdom Index, EWU
-5.73% South Korea Index, EWY
-5.74% Capital Markets KWB ST, KCE
-5.85% Emerging Markets, EEM
-5.93% India PS, PIN
-5.95% Financial Services DJ, IYG
-6.15% Turkey MSCI iS, TUR
-6.31% Europe 350 S&P Index, IEV
-6.62% South Africa Index, EZA
-6.69% Metals & Mining SPDR, XME
-6.72% European VIPERs, VGK
-6.74% France Index, EWQ
-7.05% EMU Europe Index, EZU
-7.11% Spain Index, EWP
-7.38% Netherlands Index, EWN
-7.38% Germany Index, EWG
-7.50% Sweden Index, EWD
-8.05% Austria Index, EWO
-8.19% Russia MV, RSX
-9.43% Italy Index, EWI
