The S&P 500 Composite (SPX: 1,241.30) opened higher on a gap and added to early gains throughout the day. SPX rose above the highs of the previous 4 trading days and closed up 2.98%.
SPX price crossed above its 50-day SMA on 12/20/11 but remains below its 200-day SMA. The 50-day SMA has remained bearishly below the 200-day SMA every day since 8/12/11, suggesting a persistent Bear trend for the longer term.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below the lows of the previous 6 years on 12/20/11.
VIX Fear Index broke down below the lows of the previous 5-months on 12/20/11, hitting 22.54 intraday. That is down from recent peaks of 30.91 on 12/8/11, 37.83 on 11/1/11, 46.88 on 10/4/11, and 48.00 on 8/8/11. This drop indicates a shift away from fear and toward confidence, which, according to the Art of Contrary Thinking, may be bearish.
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Stock Market Indicators
The Dow Theory signaled a Primary Tide Bear Market on 8/2/11, when both Dow-Jones Industrial and Transportation Averages 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. Following a Secondary Reaction bounce in October, a short-term downtrend was confirmed on 11/25/11 when both Averages closed below their closing price lows of the previous 7-weeks.
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.
NASDAQ Composite/S&P 500 Relative Strength Ratio broke down below the lows of the previous 3-months on 12/15/11 and has been trending lower since peaking on 9/23/11. Absolute price of the NASDAQ Composite remains below its 50-day and 200-day SMAs, and the 50-day SMA has been bearishly below the 200-day SMA every day since 8/12/11.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below the lows of the previous 2 years on 12/14/11. BKF/SPY remains below its falling 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 1/13/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below the lows of the previous 2 years on 12/19/11. EEM/SPY remains below its falling 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 2/3/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below the lows of the previous 6 years on 12/20/11. EFA/SPY remains below its falling 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 1/14/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) rose above the highs of the previous 11 weeks on 12/19/11 and has been in a rising trend since 11/4/11. Longer term, the 50-day SMA has remained bullishly above the 200-day SMA every day since 8/25/11. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative safety of large size. 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) has been correcting and consolidating since peaking on 4/5/11. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 8/11/11.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below the lows of the previous 7 weeks on 12/14/11 and has been in a downtrend since 4/5/11. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 8/24/11.
Advisory Service Sentiment: There were 69.5% Bulls plus Neutrals versus 30.5% Bears as of 12/14/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The 20-year median of Bulls plus Neutrals is 69.40 and the mean is 68.32.
VIX Fear Index broke down below the lows of the previous 5-months on 12/20/11, hitting 22.54 intraday. That is down from recent peaks of 30.91 on 12/8/11, 37.83 on 11/1/11, 46.88 on 10/4/11, and 48.00 on 8/8/11. This drop indicates a shift away from fear and toward confidence, which, according to the Art of Contrary Thinking, may be bearish. 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
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
1277.55, high of 11/8/2011
1267.06, high of 12/7/2011
1259.97 200-day SMA
1257.58, Fibonacci 61.8% of 2011 range
1244.80, low of 12/7/2011
The S&P 500 Composite Potential Support
1239.73, low of 12/1/2011
1238.81, Fibonacci 78.6% of 1,576.09 high
1234.81, low of 11/3/11
1231.04, high of 12/16/11
1226.64, low of 11/9/2011
1222.68, Fibonacci 50% of 2011 range
1224.57, high of 12/19/11
1215.20, low of 12/16/11
1209.47, low of 12/14/2011
1209.43, low of 11/17/2011
1204.49, Fibonacci 23.6% of 2009-11 range
1202.37, low of 12/19/11
1187.77, Fibonacci 38.2% of 2011 range
1158.66, low of 11/25/2011
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
3.94% , IGN , Networking, IGN
5.87% , PXJ , Oil & Gas, PXJ
3.00% , TMW , Wilshire 5000 ST TM, TMW
12.14% , CIEN.O , CIENA
2.41% , KLD , LargeCap Blend Socially Responsible iS, KLD
9.23% , DISH , EchoStar Communications
3.16% , PEJ , Leisure & Entertainment, PEJ
9.26% , S , SPRINT NEXTEL
1.70% , FPX , IPOs, First Tr IPOX-100, FPX
4.11% , RPV , Value S&P 500, RPV
3.59% , JKL , Value SmallCap iS M, JKL
5.65% , TUR , Turkey MSCI iS, TUR
2.95% , IYY , LargeCap Blend Total Market DJ, IYY
2.44% , PSJ , Software, PSJ
3.65% , RZV , Value SmallCap S&P 600, RZV
8.86% , CVS , CVS
8.10% , EMN , EASTMAN CHEM
10.10% , KBH , KB HOME
4.58% , PKB , Building & Construction, PKB
6.83% , KWT , Solar Energy MV, KWT
6.83% , CVG , CONVERGYS
3.37% , PXN , Nanotech Lux, PXN
5.33% , MTB , M&T BANK
6.32% , WY , WEYERHAEUSER
6.67% , HP , Helmerich & Payne HP
3.12% , PWC , LargeCap Blend Dynamic PS, PWC
5.38% , INTU , INTUIT
2.49% , ADRA , Asia 50 BLDRS, ADRA
6.90% , BHI , BAKER HUGHES
5.70% , DHI , D.R. HORTON, DHI
5.35% , ERIC.O , LM Ericsson Telephone Company
2.00% , ECH , Chile MSCI iS, ECH
4.35% , HD , HOME DEPOT
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-8.90% , RHT , Red Hat Inc.
-2.33% , EWP , Spain Index, EWP
-2.80% , DOG , Short 100% Dow 30, DOG
-2.87% , RIMM , RESEARCH IN MOTION LTD
-3.53% , MYY , Short 100% MidCap 400, MYY
-1.38% , TLH , Bond 10-20 Year US Treas, TLH
-2.49% , TLT , Bond, 20+ Years Treasury, TLT
-0.81% , GIS , GENERAL MILLS
-2.98% , PSQ , Short 100% QQQ, PSQ
-2.98% , SH , Short 100% S&P 500, SH
-5.90% , SDS , Short 200% S&P 500 PS, SDS
-1.25% , CECO , CAREER EDUCATION CORP
-1.21% , EWM , Malaysia Index, EWM
-1.49% , EWT , Taiwan Index, EWT
-0.14% , AGG , Bond, Aggregate, AGG
-0.13% , GVI , Bond Interm U.S. Gov, GVI
-7.01% , MZZ , Short 200% MidCap 400 PS, MZZ
-5.93% , QID , Short 200% QQQ PS, QID
-0.10% , EWK , Belgium Index, EWK
-0.15% , CCL , CARNIVAL STK A
-0.25% , VFC , VF
-0.05% , HSY , HERSHEY FOODS
-0.07% , LQD , Bond, Corp, LQD
-0.02% , SHY , Bond, 1-3 Year Treasury, SHY
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
5.65% Turkey MSCI iS, TUR
5.28% Metals & Mining SPDR, XME
5.27% Homebuilders SPDR, XHB
5.21% Semiconductor SPDR, XSD
5.04% Sweden Index, EWD
4.96% Germany Index, EWG
4.75% Russia MV, RSX
4.72% Capital Markets KWB ST, KCE
4.60% WilderHill Clean Energy PS, PBW
4.44% Semiconductor iS IGW, SOXX
4.43% Value SmallCap S&P 600 B, IJS
4.36% Basic Materials DJ US, IYM
4.25% China 25 iS, FXI
4.20% South Korea Index, EWY
4.18% Growth SmallCap R 2000, IWO
4.13% European VIPERs, VGK
4.11% Energy SPDR, XLE
4.08% Financial Services DJ, IYG
4.05% SmallCap S&P 600, IJR
4.03% Energy VIPERs, VDE
4.01% SmallCap Russell 2000, IWM
3.98% Value SmallCap Russell 2000, IWN
3.97% Energy DJ, IYE
3.96% Emerging VIPERs, VWO
3.94% Materials SPDR, XLB
3.94% Networking, IGN
3.94% Growth SmallCap VIPERs, VBK
3.94% Energy & Nat Res iS GS, IGE
3.93% Water Resources, PHO
3.89% Small Cap VIPERs, VB
3.84% Europe 350 S&P Index, IEV
3.79% Financial SPDR, XLF
3.77% Value MidCap S&P 400 B, IJJ
3.77% Value SmallCap VIPERS, VBR
3.75% Microcap Russell, IWC
3.74% Oil, Crude, U.S. Oil Fund, USO
3.67% France Index, EWQ
3.66% Oil Fund PowerShares, DBO
3.65% Financials VIPERs, VFH
3.60% Growth BARRA Small Cap 600, IJT
3.57% Energy Global, IXC
3.57% Netherlands Index, EWN
3.53% Growth MidCap Russell, IWP
3.51% MidCap S&P 400 iS, IJH
3.49% Financial DJ US, IYF
3.45% Biotech SPDR, XBI
3.44% MidCap S&P 400 SPDRs, MDY
3.42% Industrial SPDR, XLI
3.40% MidCap Russell, IWR
3.40% Emerging 50 BLDRS, ADRE
3.38% Latin Am 40, ILF
3.37% EMU Europe Index, EZU
3.34% Transportation Av DJ, IYT
3.32% Brazil Index, EWZ
3.32% India PS, PIN
3.31% South Africa Index, EZA
3.31% LargeCap Blend S&P=Weight R, RSP
3.29% Value S&P 500 B, IVE
3.26% Austria Index, EWO
3.21% Emerging Markets, EEM
3.18% Italy Index, EWI
3.14% REIT Wilshire, RWR
3.13% Blend Total Market VIPERs, VTI
3.13% Growth MidCap 400 B, IJK
3.12% Value MidCap Russell, IWS
3.11% China LargeCap Growth G D H USX PS, PGJ
3.09% Info Tech VIPERs, VGT
3.09% Realty Cohen & Steers, ICF
3.08% Technology DJ US, IYW
3.05% Telecom DJ US, IYZ
3.03% REIT VIPERs, VNQ
3.03% S&P 500 SPDRs LargeCap Blend, SPY
3.03% Value 1000 Russell, IWD
3.02% Real Estate US DJ, IYR
3.02% LargeCap 1000 R, IWB
3.01% Global 100, IOO
3.01% LargeCap Blend Russell 3000, IWV
3.00% Growth 1000 Russell, IWF
3.00% S&P 500 iS LargeCap Blend, IVV
2.98% Growth VIPERs, VUG
2.96% QQQ Nasdaq 100 Trust, QQQ
2.95% LargeCap VIPERs, VV
2.94% Value VIPERs, VTV
2.90% Silver Trust iS, SLV
2.85% LargeCap Blend S&P 100, OEF
2.83% DIAMONDS (DJIA), DIA
2.81% Technology SPDR, XLK
2.80% Dividend Appreciation Vipers, VIG
2.77% Pacific VIPERs, VPL
2.75% Growth S&P 500/BARRA, IVW
2.75% Consumer Discretionary SPDR, XLY
2.73% Indonesia MV, IDX
2.53% Dividend SPDR, SDY
2.53% Dividend DJ Select, DVY
2.50% Value LargeCap Dynamic PS, PWV
2.48% Dividend High Yield Equity PS, PEY
2.43% Frontier Markets Guggenheim , FRN
2.41% Growth EAFE MSCI, EFG
2.30% Commodity Tracking, DBC
2.29% EAFE Index, EFA
2.25% Utilities VIPERs, VPU
2.20% Hong Kong Index, EWH
2.13% India Earnings WTree, EPI
2.13% Utilities SPDR, XLU
2.11% Mexico Index, EWW
2.10% Health Care SPDR, XLV
2.07% Consumer Staples SPDR, XLP
2.06% Switzerland Index, EWL
2.06% Dividend International, PID
2.00% Chile MSCI iS, ECH
1.99% Global ex US ACWI iS, ACWX
1.91% Thailand MSCI iS, THD
1.73% Value EAFE MSCI, EFV
1.53% United Kingdom Index, EWU
1.36% Gold Shares S.T., GLD
1.36% Small Cap EAFE MSCI iS, SCZ
1.35% Japan Index, EWJ
1.25% Bond, High-Yield Corporate, HYG
1.24% Bond, High-Yield Junk, JNK
1.04% Agriculture DB PS, DBA
1.03% Pacific ex-Japan, EPP
0.87% Canada Index, EWC
0.51% Bond EmrgMkt JPM iS, EMB
0.47% Australia Index, EWA
0.37% Singapore Index, EWS
0.36% Bond Ex-US Treas, BWX
0.14% Preferred Stock iS, PFF
0.07% Bond Muni ATM-Free S&P iS, MUB
0.06% Financial Preferred, PGF
0.06% Bond, TIPS, TIP
-0.02% Bond Treasury Short-Term iS, SHV
-0.02% Bond, 1-3 Year Treasury, SHY
-0.07% Bond, Corp, LQD
-0.10% Belgium Index, EWK
-0.14% Bond, Aggregate, AGG
-0.90% Bond, 10 Year Treasury, IEF
-1.21% Malaysia Index, EWM
-1.49% Taiwan Index, EWT
-2.33% Spain Index, EWP
-2.49% Bond, 20+ Years Treasury, TLT
-2.98% Bear, Short S&P 500, SH
