The S&P 500 (SPX: 1,362.16) jumped 33.12 points or 2.49% on Friday.
SPX gapped higher on news of the 19th EU summit “agreement”, chopped up and down most of the day, and finally rose again in the final hour to close at its highest level of the day.
Technically, the very short-term, day-to-day price momentum looks bullish, and seasonal tendencies are generally bullish at the beginning of the month.
It seems that much depends on the news out of Europe, however. That news has proved to be unpredictable, making trading risky. At this time, it might be best to trade nimble and quick, and keep risk well contained. Or, even better, take a vacation.
Friday was the end of the second quarter, and the price markup had the appearance of window dressing to make portfolio managers look better after a dismal quarter. The SPX still lost 3.29% in 2Q, even after Friday’s big +2.49% painted tape.
SPX has recovered a 61.8% Fibonacci ratio of its April-June loss, which is normal for a counter-trend move and a natural point of technical resistance.
NYSE volume rose 16% on Friday, thereby confirming bullish short-term price momentum. Generally, however, over a longer time horizon, volume has been higher on price declines than on price advances.
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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
The S&P 500 Composite Potential Support
1357.38, low of 4/10/2012
1340.33, 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
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
1299.58, 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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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 29.02, 26.28, and 22.74. Resistance 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 up above its 50-day SMA on 6/29/12, turning systematically neutral 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 25.34, 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
2.89% , ADRA , Asia 50 BLDRS, ADRA
5.69% , EWK , Belgium Index, EWK
4.34% , DBC , Commodity Tracking, DBC
6.52% , PIN , India PS, PIN
7.27% , EWP , Spain Index, EWP
12.64% , KBH , KB HOME
3.15% , JKH , MidCap Growth iS M, JKH
3.08% , PWC , LargeCap Blend Dynamic PS, PWC
3.32% , FPX , IPOs, First Tr IPOX-100, FPX
4.04% , IXG , Financials Global LargeCap Value, IXG
2.82% , NYC , LargeCap Blend NYSE Composite iS, NYC
5.28% , EWN , Netherlands Index, EWN
8.44% , EWI , Italy Index, EWI
3.38% , TUR , Turkey MSCI iS, TUR
2.56% , PWO , OTC Dynamic PS, PWO
3.35% , SCZ , Small Cap EAFE MSCI iS, SCZ
9.29% , OMX , OFFICEMAX INC., OMX
3.09% , IXN , Technology Global, IXN
7.02% , DBO , Oil Fund PowerShares, DBO
2.76% , KLD , LargeCap Blend Socially Responsible iS, KLD
1.83% , EIS , Israel MSCI iS, EIS
4.40% , PKB , Building & Construction, PKB
4.24% , IEV , Europe 350 S&P Index, IEV
2.16% , IXJ , Healthcare Global, IXJ
5.37% , CCE , COCA COLA ENTER
5.64% , EPI , India Earnings WTree, EPI
3.39% , IGE , Energy & Nat Res iS GS, IGE
6.41% , FEZ , Euro STOXX 50, FEZ
6.48% , WHR , WHIRLPOOL
3.22% , IYJ , Industrial LargeCap Blend DJ US, IYJ
6.58% , ADSK , AUTODESK
4.64% , VGK , European VIPERs, VGK
8.10% , EMC , EMC
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-19.06% , RIMM , RESEARCH IN MOTION LTD
-6.00% , MJN , Mead Johnson Nutrition
-9.40% , NKE , NIKE STK B
-4.96% , F , FORD MOTOR
-5.71% , MZZ , Short 200% MidCap 400 PS, MZZ
-2.81% , MYY , Short 100% MidCap 400, MYY
-2.51% , SH , Short 100% S&P 500, SH
-2.18% , DOG , Short 100% Dow 30, DOG
-3.13% , PSQ , Short 100% QQQ, PSQ
-0.77% , SO , SOUTHERN
-1.30% , TLT , Bond, 20+ Years Treasury, TLT
-0.54% , SIRI , Sirius Satellite
-5.23% , SDS , Short 200% S&P 500 PS, SDS
-0.41% , VFC , VF
-0.46% , IEF , Bond, 10 Year Treasury, IEF
-0.53% , PBI , PITNEY BOWES
-1.33% , SVU , SUPERVALU
-0.02% , PGN , PROGRESS ENERGY
-0.26% , RSH , RADIOSHACK
-0.13% , AGG , Bond, Aggregate, AGG
-0.91% , TLH , Bond 10-20 Year US Treas, TLH
-0.08% , AEP , AM ELEC POWER
-0.06% , AEE , AMEREN
-0.06% , CTB , COOPER TIRE
-0.03% , LQD , Bond, Corp, LQD
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
8.44% Italy Index, EWI
7.90% Oil, Crude, U.S. Oil Fund, USO
7.27% Spain Index, EWP
7.02% Oil Fund PowerShares, DBO
6.52% India PS, PIN
6.07% EMU Europe Index, EZU
6.05% Sweden Index, EWD
5.95% France Index, EWQ
5.89% Austria Index, EWO
5.71% Germany Index, EWG
5.69% Belgium Index, EWK
5.64% India Earnings WTree, EPI
5.48% Russia MV, RSX
5.35% Brazil Index, EWZ
5.28% Netherlands Index, EWN
4.64% European VIPERs, VGK
4.62% South Korea Index, EWY
4.46% Latin Am 40, ILF
4.44% Emerging Markets, EEM
4.36% Emerging 50 BLDRS, ADRE
4.35% Semiconductor iS IGW, SOXX
4.34% Commodity Tracking, DBC
4.33% Indonesia MV, IDX
4.24% Europe 350 S&P Index, IEV
4.20% Emerging VIPERs, VWO
4.02% Homebuilders SPDR, XHB
3.98% Silver Trust iS, SLV
3.84% Value EAFE MSCI, EFV
3.80% Australia Index, EWA
3.75% Semiconductor SPDR, XSD
3.66% Energy Global, IXC
3.65% Metals & Mining SPDR, XME
3.62% China 25 iS, FXI
3.61% EAFE Index, EFA
3.60% South Africa Index, EZA
3.56% Global ex US ACWI iS, ACWX
3.51% Pacific ex-Japan, EPP
3.48% Industrial SPDR, XLI
3.43% Chile MSCI iS, ECH
3.39% Energy & Nat Res iS GS, IGE
3.38% Turkey MSCI iS, TUR
3.37% Growth SmallCap VIPERs, VBK
3.36% Mexico Index, EWW
3.36% Growth EAFE MSCI, EFG
3.35% Small Cap EAFE MSCI iS, SCZ
3.29% Taiwan Index, EWT
3.26% Growth BARRA Small Cap 600, IJT
3.24% Info Tech VIPERs, VGT
3.24% Switzerland Index, EWL
3.19% Value SmallCap S&P 600 B, IJS
3.18% Energy VIPERs, VDE
3.16% Growth SmallCap R 2000, IWO
3.16% Technology DJ US, IYW
3.15% QQQ Nasdaq 100 Trust, QQQ
3.06% Energy DJ, IYE
3.04% Growth MidCap 400 B, IJK
3.03% WilderHill Clean Energy PS, PBW
3.02% SmallCap S&P 600, IJR
3.01% Energy SPDR, XLE
3.01% Basic Materials DJ US, IYM
3.01% Materials SPDR, XLB
2.99% Canada Index, EWC
2.95% Small Cap VIPERs, VB
2.92% Singapore Index, EWS
2.91% SmallCap Russell 2000, IWM
2.90% MidCap S&P 400 iS, IJH
2.88% China LargeCap Growth G D H USX PS, PGJ
2.85% Networking, IGN
2.85% Growth MidCap Russell, IWP
2.83% Thailand MSCI iS, THD
2.82% Capital Markets KWB ST, KCE
2.81% Global 100, IOO
2.81% Transportation Av DJ, IYT
2.80% Growth VIPERs, VUG
2.78% Value MidCap S&P 400 B, IJJ
2.77% Technology SPDR, XLK
2.76% LargeCap Blend S&P=Weight R, RSP
2.76% Hong Kong Index, EWH
2.75% REIT Wilshire, RWR
2.74% Dividend International, PID
2.74% Gold Shares S.T., GLD
2.73% LargeCap Blend Russell 3000, IWV
2.73% Financial Services DJ, IYG
2.73% Value SmallCap Russell 2000, IWN
2.71% Growth 1000 Russell, IWF
2.70% MidCap S&P 400 SPDRs, MDY
2.69% Realty Cohen & Steers, ICF
2.68% Value MidCap Russell, IWS
2.65% MidCap Russell, IWR
2.63% Microcap Russell, IWC
2.62% Blend Total Market VIPERs, VTI
2.61% LargeCap 1000 R, IWB
2.60% Pacific VIPERs, VPL
2.57% Biotech SPDR, XBI
2.56% LargeCap VIPERs, VV
2.56% Financial SPDR, XLF
2.55% REIT VIPERs, VNQ
2.54% Value SmallCap VIPERS, VBR
2.53% LargeCap Blend S&P 100, OEF
2.52% S&P 500 iS LargeCap Blend, IVV
2.51% Malaysia Index, EWM
2.50% S&P 500 SPDRs LargeCap Blend, SPY
2.47% Financials VIPERs, VFH
2.47% Value S&P 500 B, IVE
2.47% Growth S&P 500/BARRA, IVW
2.47% Financial DJ US, IYF
2.45% Value 1000 Russell, IWD
2.40% Value VIPERs, VTV
2.26% Real Estate US DJ, IYR
2.26% United Kingdom Index, EWU
2.24% Dividend Appreciation Vipers, VIG
2.20% Frontier Markets Guggenheim , FRN
2.14% Water Resources, PHO
2.12% Consumer Discretionary SPDR, XLY
2.11% DIAMONDS (DJIA), DIA
2.06% Japan Index, EWJ
1.89% Health Care SPDR, XLV
1.88% Consumer Staples SPDR, XLP
1.83% Value LargeCap Dynamic PS, PWV
1.77% Telecom DJ US, IYZ
1.68% Dividend SPDR, SDY
1.66% Agriculture DB PS, DBA
1.61% Dividend DJ Select, DVY
1.22% Bond Ex-US Treas, BWX
0.95% Bond, High-Yield Corporate, HYG
0.86% Dividend High Yield Equity PS, PEY
0.74% Bond, High-Yield Junk, JNK
0.69% Bond EmrgMkt JPM iS, EMB
0.57% Utilities SPDR, XLU
0.52% Utilities VIPERs, VPU
0.17% Financial Preferred, PGF
0.08% Preferred Stock iS, PFF
0.00% Bond Treasury Short-Term iS, SHV
0.00% Bond, 1-3 Year Treasury, SHY
-0.03% Bond, Corp, LQD
-0.07% Bond Muni ATM-Free S&P iS, MUB
-0.13% Bond, Aggregate, AGG
-0.23% Bond, TIPS, TIP
-0.46% Bond, 10 Year Treasury, IEF
-1.30% Bond, 20+ Years Treasury, TLT
-2.51% Bear, Short S&P 500, SH
