Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below its lows of the previous 14 months on 8/1/14 and remains systematically bearish. Recent steep declines in junk bond prices suggest growing anxiety about potential default risks.
Crude Oil, United States Oil ETF (USO) absolute price fell to its lowest price level in nearly 3 months on 8/1/14, suggesting a downside correction.
Silver, iShares Silver Trust ETF (SLV) absolute price fell below its lows of the previous 6 weeks on 8/1/14, possibly suggesting a minor pullback correction.
Health Care stock sector ETF (XLV) Relative Strength Ratio (XLV/SPY) rose above its highs of the previous 4 months on 8/1/14 and remains systematically bullish.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) rose to its highest level in 8 months on 8/1/14 and the rising 50-day SMA crossed above the falling 200-day SMA, thereby turning systematically bullish (from neutral).
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) rose to its highest level in 8 months on 8/1/14. The EEM /SPY 50-day SMA crossed above the 200-day SMA on 7/29/13, thereby turning systematically bullish (from neutral).
The S&P 500 Composite Index (SPX: 1,925.15, down 0.29%) absolute price gapped down on the open again, tried to recover a few times, but finally closed about where it opened. SPX closed below the open, below midpoint of the day’s high-low range, and below both its lowest closing prices and lowest intraday lows in more than 8 weeks.
NYSE total volume fell 10% to a level 15% above its 200-day SMA. Generally, rising volume confirms the direction (up or down) of a price move, but falling volume may indicate diminishing power behind a price trend, which can suggest a price reversal ahead.
The Number of Daily Net New Highs on the NYSE (New Highs minus New Lows), now at -50, has been running below its peaks above +800 recorded in 2012 and 2013, when the S&P 500 was lower than it is now. So, this indicator still is diverging bearishly relative to last year’s levels.
Momentum is a leading indicator of price change, and failing price momentum is often followed by a downside correction. Short-term momentum oscillators RSI and MACD based on the SPX broke down to their lowest levels in more than 3 months on 8/1/14 and remain relatively weak. Both turned down on 7/7/14, after failing to match their highs of 6/10/14–despite higher highs for the S&P 500 Index on which these oscillators are based. Furthermore, these same momentum oscillators consistently have remained below their highs of 2012 and 2013, despite much higher highs in the S&P 500 itself in 2014. Therefore, both oscillators have continued to demonstrate bearish divergence compared to the price of the underlying index, the S&P 500.
Stochastic (12,3,3) oscillator based on the S&P 500 fell to its lowest levels in more than 3 months on 8/1/14. Stochastic turned down from a peak of 91 on 7/7/14, which was below its June peak above 98 set on 6/4/14, for another example of bearish divergence.
Stock market sentiment indicators have been off the charts and into the danger zone for months, bearish momentum divergences have been accumulating, and there is a tendency for low trading volume on up days and rising trading volume on down days (generally, not always), suggesting distribution. These are challenges to a sustainable upside trend that the stock market has been ignoring for months–until now?
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Stock Market Indicators
The Dow Theory reconfirmed a Primary Tide Bull Market on 7/16/14 when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average rose to new all-time closing price highs. Although not part of the Dow Theory, all 3 Dow-Jones Averages (Industrial, Transportation, and Utility) crossed below their 50-day SMAs on 7/31/14, thereby objectively demonstrating short-term price weakness, at least.
NASDAQ 100 ETF/S&P 500 ETF Relative Strength Ratio (QQQ/SPY) rose above its highs of the previous 13 years on 7/30/14 and remains systematically bullish. The absolute price of QQQ rose to a 13-year closing price high on 7/23/14. The price 50-day SMA crossed above the 200-day SMA on 1/28/13, thereby turning systematically bullish (from neutral).
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) rose to its highest level in 8 months on 8/1/14 and the rising 50-day SMA crossed above the falling 200-day SMA, thereby turning systematically bullish (from neutral).
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) rose to its highest level in 8 months on 8/1/14. The EEM /SPY 50-day SMA crossed above the 200-day SMA on 7/29/13, thereby turning systematically bullish (from neutral).
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below its lows of the previous 11 years on 3/20/14, thereby reconfirming its preexisting major downtrend. EFA/SPY has underperformed since the ratio peaked on 11/27/2007.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) rose above its highs of the previous 6 months on 7/29/14 but remains systematically neutral, with 50-day SMA still below the 200-day SMA. 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) fell below its lows of the previous 20 months on 7/28/14, thereby reconfirming its preexisting bearish trend. IWM/SPY 50-day SMA crossed below the 200-day SMA on 4/29/14, thereby turning systematically bearish (from neutral). Absolute price has turned weak since it peaked at 120.97 on 7/1/14.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below its lows of the previous 19 months on 7/29/14, thereby reconfirming its preexisting bearish trend. MDY/SPY 50-day SMA crossed below the 200-day SMA on 5/9/14, thereby turning systematically bearish (from neutral). Absolute price has turned weak since it peaked at 264 on 7/1/14.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) absolute price rose above its highs of the previous 5 months on 7/30/14. UUP is currently systematically neutral, but the 50-day SMA is rising up toward the 200-day SMA, such that a bullish crossover may be possible in weeks ahead if price rises further. Support 21.07 and 20.84. Resistance 21.96, 22.34, 22.98, 23.14, 23.52, 25.84, 27.19, and 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) absolute price broke down below its lows of the previous 5 months on 7/11/14. DBA crossed below its 50-day SMA on 5/9/14, thereby turning systematically neutral (from bullish).
Crude Oil, United States Oil ETF (USO) absolute price fell to its lowest price level in nearly 3 months on 8/1/14, suggesting a downside correction. Price remains systematically neutral: below its 50-day SMA, above it above the 200-day SMA, and with the 50-day SMA above the 200-day SMA. Support 35.96, 35.63, 34.97, 34.00, 32.53, 32.12, 30.79, 29.02, 26.28, and 22.74. Resistance 36.58, 38.30, 39.54, 39.64, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) absolute price appears to be base building since hitting a bottom at 114.46 on 12/31/13. GLD appears to be systematically neutral, with the GLD price crisscrossing the 50-day and 200-day SMA recently. Support: 119.42, 114.46, 113.08, and 102.28. Resistance: 133.69, 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) rose above its highs of the previous 11 months on 7/28/14 and remains systematically bullish. Absolute price rose above its highs of the previous 4 months on 7/9/14 and remains systematically bullish.
Silver, iShares Silver Trust ETF (SLV) absolute price fell below its lows of the previous 6 weeks on 8/1/14, possibly suggesting a minor pullback correction. SLV remains systematically neutral, with the 50-day SMA still below the 200-day SMA. Support 17.75, 16.73, 14.37, 12.27, 11.64, and 8.45. Resistance: 21.30, 22.23, 23.84, 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 6 weeks on 8/1/14, possibly suggesting a minor pullback correction. The 50-200 SMA spread has been narrowing since 6/16/14, but SLV/GLD is still weeks away from a bullish 50>200 SMA crossover.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) remains systematically neutral, with the 50-day SMA still below the 200-day SMA. “Dr. Copper” is widely accepted as one of the better indicators of investor confidence (or lack thereof) in the global industrial economy.
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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
3.19% , HOT , STARWOOD HOTELS
2.29% , CHD , Church & Dwight
2.35% , DV , DeVry, Inc.
0.11% , IYM , Basic Materials DJ US, IYM
0.37% , EIS , Israel MSCI iS, EIS
3.01% , PG , PROCTER & GAMBLE
2.36% , KMX , CarMax
2.38% , PMCS , PMC SIERRA
2.68% , CLX , CLOROX
2.08% , EIX , EDISON INTL
1.28% , NYT , NY TIMES STK A
0.36% , IDU , Utilities DJ, IDU
0.55% , EPU , Peru MSCI iS, EPU
0.09% , SHY , Bond, 1-3 Year Treasury, SHY
0.56% , PBJ , Food & Beverage, PBJ
2.67% , JCP , JC PENNEY
0.40% , IEF , Bond, 10 Year Treasury, IEF
1.31% , MJN , Mead Johnson Nutrition
0.71% , TUR , Turkey MSCI iS, TUR
0.51% , DOG , Short 100% Dow 30, DOG
0.31% , VPU , Utilities VIPERs, VPU
0.98% , HSIC , Henry Schein Inc
0.59% , VWO , Emerging VIPERs, VWO
0.19% , PKB , Building & Construction, PKB
0.86% , CAG , CONAGRA FOODS
1.04% , IDX , Indonesia MV, IDX
0.99% , KMB , KIMBERLY CLARK
0.63% , NFLX , Netflix, NFLX
0.41% , AN , AUTONATION
1.12% , DUK , DUKE ENERGY
0.45% , WYN , Wyndham Worldwide
1.00% , CAH , CARDINAL HEALTH
0.43% , TLH , Bond 10-20 Year US Treas, TLH
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.62% , ASH , ASHLAND
-0.24% , MVV , Ultra MidCap400 Double, MVV
-1.23% , IYG , Financial Services DJ, IYG
-0.94% , PGR , PROGRESSIVE OHIO
-3.63% , PKI , PERKINELMER
-0.90% , EWK , Belgium Index, EWK
-0.70% , IYF , Financial DJ US, IYF
-0.41% , OEF , LargeCap Blend S&P 100, OEF
-0.11% , MYY , Short 100% MidCap 400, MYY
-0.82% , IWC , Microcap Russell, IWC
-2.34% , FITB , FIFTH THIRD BANC
-1.44% , LXK , LEXMARK INTL STK A
-1.89% , CHKP , Check Point Software Technologies Ltd
-1.40% , DHI , D.R. HORTON, DHI
-0.64% , IXP , Telecommunications Global, IXP
-1.09% , EMB , Bond EmrgMkt JPM iS, EMB
-1.77% , BAC , BANK OF AMERICA
-0.68% , EFV , Value EAFE MSCI, EFV
-1.74% , AXP , AMERICAN EXPRESS
-2.49% , COH , COACH
-2.06% , JPM , J P MORGAN CHASE
-0.24% , IWV , LargeCap Blend Russell 3000, IWV
-1.21% , JCI , JOHNSON CONTROLS
-1.36% , FHN , First Horizon National
-2.31% , SHLD , SEARS HOLDINGS
-0.17% , RWR , REIT Wilshire, RWR
-1.89% , AMZN , Amazoncom Inc
-1.07% , BIG , BIG LOTS
-1.06% , ININ , Interactive Intelligence ININ
-1.36% , HD , HOME DEPOT
-0.43% , VGT , Info Tech VIPERs, VGT
-2.21% , DISCA , Discovery Communications
-0.48% , IOO , Global 100, IOO
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.62% , Thailand MSCI iS, THD
1.04% , Indonesia MV, IDX
0.83% , Chile MSCI iS, ECH
0.80% , Gold Shares S.T., GLD
0.77% , Semiconductor SPDR, XSD
0.77% , Consumer Staples SPDR, XLP
0.76% , South Korea Index, EWY
0.72% , Mexico Index, EWW
0.71% , Turkey MSCI iS, TUR
0.62% , China 25 iS, FXI
0.59% , Emerging VIPERs, VWO
0.55% , Emerging Markets MSCI iS, EEM
0.52% , Brazil Index, EWZ
0.51% , Bond, 20+ Years Treasury, TLT
0.44% , Malaysia Index, EWM
0.42% , South Africa Index, EZA
0.40% , Bond, 10 Year Treasury, IEF
0.39% , Utilities SPDR, XLU
0.38% , Taiwan Index, EWT
0.34% , Bear, Short S&P 500, SH
0.33% , Semiconductor iS IGW, SOXX
0.31% , Utilities VIPERs, VPU
0.23% , Latin Am 40, ILF
0.23% , Bond, Long-Term Corp iBoxx iS, LQD
0.19% , Bond, Intermediate US Aggregate iS, AGG
0.18% , Bond Ex-US Treas, BWX
0.17% , Homebuilders SPDR, XHB
0.17% , Russia MV, RSX
0.16% , Frontier Markets Guggenheim , FRN
0.14% , India PS, PIN
0.13% , Bond, Muni S&P ATM-Free iS, MUB
0.11% , Basic Materials DJ US, IYM
0.09% , Bond, 1-3 Year Treasury, SHY
0.08% , Materials SPDR, XLB
0.08% , Health Care SPDR, XLV
0.07% , Bond, TIPS U.S. Treasury iS, TIP
0.05% , Emerging 50 BLDRS, ADRE
0.04% , Dividend U.S. DJ iS, DVY
0.01% , Bond Treasury Short-Term iS, SHV
-0.03% , MidCap Blend S&P 400 iS, IJH
-0.05% , SmallCap Value S&P 600 iS, IJS
-0.05% , Dividend SPDR, SDY
-0.08% , Dividend International, PID
-0.08% , Japan Index, EWJ
-0.09% , Hong Kong Index, EWH
-0.10% , Industrial SPDR, XLI
-0.11% , MidCap S&P 400 SPDRs, MDY
-0.11% , Pacific VIPERs, VPL
-0.13% , Dividend Appreciation Vipers, VIG
-0.14% , Value SmallCap VIPERS, VBR
-0.14% , Singapore Index, EWS
-0.15% , MidCap Value S&P 400 iS, IJJ
-0.16% , Water Resources, PHO
-0.17% , REIT Wilshire, RWR
-0.18% , Dividend High Yield Equity PS, PEY
-0.19% , Value MidCap Russell, IWS
-0.20% , Real Estate US DJ iS, IYR
-0.20% , MidCap Russell, IWR
-0.21% , Growth MidCap Russell, IWP
-0.21% , LargeCap Value Russell 1000 iS, IWD
-0.21% , LargeCap Blend S&P=Weight R, RSP
-0.22% , SmallCap Blend S&P 600 iS, IJR
-0.23% , Realty Cohen & Steers, ICF
-0.23% , MidCap Growth S&P 400 iS, IJK
-0.24% , REIT VIPERs, VNQ
-0.24% , Metals & Mining SPDR, XME
-0.24% , LargeCap Blend Russell 3000 iS, IWV
-0.25% , Transportation Av DJ, IYT
-0.25% , Blend Total Market VIPERs, VTI
-0.26% , LargeCap Blend Russell 1000 iS, IWB
-0.26% , LargeCap Growth S&P 500 iS, IVW
-0.26% , Small Cap VIPERs, VB
-0.26% , LargeCap Blend S&P 500 iS, IVV
-0.28% , Financial Preferred, PGF
-0.29% , LargeCap Growth Russell 1000 iS, IWF
-0.29% , LargeCap Value S&P 500 iS, IVE
-0.30% , Value LargeCap Dynamic PS, PWV
-0.31% , S&P 500 SPDRs LargeCap Blend, SPY
-0.31% , Silver Trust iS, SLV
-0.31% , Value VIPERs, VTV
-0.32% , India Earnings WTree, EPI
-0.33% , LargeCap VIPERs, VV
-0.33% , Growth VIPERs, VUG
-0.34% , Pacific ex-Japan, EPP
-0.34% , Oil, Crude, U.S. Oil Fund, USO
-0.35% , SmallCap Value Russell 2000 iS, IWN
-0.36% , Consumer Discretionary SPDR, XLY
-0.37% , QQQ Nasdaq 100 Trust, QQQ
-0.40% , Global ex U.S. LargeCap Blend, ACWX
-0.41% , LargeCap Blend S&P 100, OEF
-0.41% , Netherlands Index, EWN
-0.42% , Global LargeCap Blend MSCI iS, ACWI
-0.43% , Info Tech VIPERs, VGT
-0.44% , DIAMONDS (DJIA), DIA
-0.45% , Oil Fund PowerShares, DBO
-0.46% , SmallCap Blend Russell 2000 iS, IWM
-0.48% , Bond, High Yield Corp iBoxx iS, HYG
-0.48% , France Index, EWQ
-0.48% , SmallCap Growth Russell 2000 iS, IWO
-0.48% , Global 100, IOO
-0.48% , SmallCap Growth S&P 600 iS, IJT
-0.49% , Telecom DJ US, IYZ
-0.50% , Sweden Index, EWD
-0.50% , Growth EAFE MSCI, EFG
-0.52% , Switzerland Index, EWL
-0.52% , Growth SmallCap VIPERs, VBK
-0.54% , Technology SPDR, XLK
-0.54% , Technology DJ US, IYW
-0.57% , Dividend ex-U.S. DJ iS, IDV
-0.60% , Energy Global, IXC
-0.61% , Italy Index, EWI
-0.64% , Australia Index, EWA
-0.68% , Value EAFE MSCI, EFV
-0.68% , Preferred Stock iS, PFF
-0.69% , Bond, High-Yield Junk, JNK
-0.69% , Foreign LargeCap EAFE MSCI iS, EFA
-0.70% , Financial DJ US, IYF
-0.72% , SmallCap Blend EAFE MSCI iS, SCZ
-0.75% , Agriculture DB PS, DBA
-0.77% , China LargeCap Growth G D H USX PS, PGJ
-0.78% , Austria Index, EWO
-0.79% , United Kingdom Index, EWU
-0.79% , Biotech SPDR, XBI
-0.79% , Commodity Tracking, DBC
-0.79% , Energy VIPERs, VDE
-0.80% , Europe 350 S&P Index, IEV
-0.80% , Energy DJ, IYE
-0.81% , Energy SPDR, XLE
-0.82% , Microcap Russell, IWC
-0.83% , Energy & Nat Res iS GS, IGE
-0.85% , Financial SPDR, XLF
-0.87% , European VIPERs, VGK
-0.90% , Belgium Index, EWK
-0.90% , Financials VIPERs, VFH
-0.91% , Capital Markets KWB ST, KCE
-0.96% , Canada Index, EWC
-0.98% , EMU Europe Index, EZU
-1.08% , Spain Index, EWP
-1.09% , Bond, Emerging Mkt JPM iS, EMB
-1.23% , Financial Services DJ, IYG
-1.43% , WilderHill Clean Energy PS, PBW
-1.61% , Networking, IGN
-1.65% , Germany Index, EWG
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The S&P 500 Composite Potential Resistance
1991.39, high of 7/24/2014
1953.61, 50-day SMA
1952.86, low of 7/10/2014
The S&P 500 Composite Potential Support
1902.17, high of 5/13/2014
1897.28, high of 4/4/2014
1859.79, low of 5/7/2014
1858.14, 200-day SMA
1850.61, low of 4/28/2014
1813.55, high of 11/29/2013
1737.92, low of 2/5/2014
1729.86, high of 9/19/2013
1711.57, high of 10/15/2013
1709.67, high of 8/2/2013
1703.85, high of 9/26/2013
1700.18, high of 8/8/2013
1698.78, high of 7/23/2013
1696.81, high of 8/13/2013
1696.55, high of 10/1/2013
1695.93, low of 10/15/2013
1687.18, high of 5/22/2013
1687.11, low of 9/27/2013
1676.03, low of 7/26/2013
1674.99, low of 9/30/2013
1672.40, high of 9/9/2013
1671.84, low of 7/16/2013
1670.36, low of 10/3/2013
1669.51, high of 8/26/2013
1654.19, high of 6/18/2013
1654.18, high of 7/9/2013
1652.61, low of 8/16/2013
1646.47, low of 10/9/2013
1629.05, low of 8/27/2013
1560.33, low of 6/24/2013
1536.03, low of 4/18/2013
1530.94, high of 2/19/2013
1485.01, low of 2/26/2013
1474.51, high of 9/14/2012
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
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
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
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
1234.81, low of 11/3/2011
1231.04, high of 12/16/2011
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
1158.66, low of 11/25/2011
1074.77, low of 10/4/2011
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
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
