Highlights based on trading on Monday, June 18, 2012:
The S&P 500 (SPX: 1,344.78) rose 1.94 points or 0.14% on Monday.
NYSE volume fell 26% to one of the lowest levels of the year, reflecting weak demand for stocks. Volume patterns generally have been bearish for months, with a tendency toward lower volume on rallies and higher volume on declines, indicating the dominance of selling pressure over buying pressure.
Short term, over the past two weeks, stock price indexes have recovered half of their losses from their April highs. That is a typical retracement for a counter-trend minor correction.
In Dow Theory, Minor Ripple price fluctuations typically last only one day to three weeks. The Minor Ripple fluctuation is ignored as insignificant noise by the Dow Theory.
The larger stock market trend still appears more bearish than bullish since the SPX peak at 1,422.38 on 4/2/12. Looking past the noise, the path of least resistance appears to be down.
For extensive coverage of major global markets with illustrative charts, take a free trial for my weekly report —
click here.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Market Indicators
The Dow Theory signaled a Primary Tide Bear Market on 5/17/12 when both Industrials and Transports closed below their closing price lows of the previous 4 months, including the critical lows of March and April, 2012. The Averages gave an early warning by diverging after 2/3/12, as the Transports turned corrective and failed to confirm higher highs by the Industrials. Again on 5/1/12, the Industrials rose to a higher closing price high while the Transports failed to rise to a higher closing price high, thereby indicating a non-confirmation and bearish divergence.
NASDAQ Composite/S&P 500 Relative Strength Ratio fell below its lows of the previous 4 months on 6/14/12. The Ratio remains systematically neutral below its 50-day SMA and above its 200-day SMA. The 50-day is still above the 200-day SMA, but the spread between these two SMAs is narrowing. Looks like a significant downside correction, at least.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 3 years on 5/24/12, reconfirming its bearish trend. Systematically, BKF/SPY 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 1/13/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below its lows of the previous 3 years on 5/25/12, reconfirming its bearish trend. EEM/SPY remains below its 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained below the 200-day SMA every day since 2/3/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) reconfirmed a bearish major trend when it fell below its lows of the previous 8 years on 5/30/12. Systematically, EFA/SPY remains bearish below its 50-day and 200-day SMAs, and the 50-day SMA has remained below the 200-day SMA consistently every day since 1/14/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) rose above its highs of the previous 2 years on 6/14/12, reconfirming its preexisting major bullish trend. OEX/SPX remains systematically bullish above its 50-day SMA, above its 200-day SMA, and the 50-day SMA has been above the 200-day SMA consistently every day since 8/24/11. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative safety of large size. On the other side of the coin, 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) fell below its lows of the previous 8 months on 6/13/12, reconfirming its preexisting major bearish trend. Systematically, IWM/SPY returned to bearish status again on 4/20/12 when the 50-day SMA crossed below the 200-day SMA. Longer term, IWM/SPY has been relatively weak for more than a year, since 4/5/11.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below its lows of the previous 8 months on 6/14/12, reconfirming its preexisting major bearish trend. MDY/SPY turned systematically bearish on 6/6/12, when its 50-day SMA crossed below its 200-day SMA. MDY/SPY remains below its 50-day SMA and 200-day SMA.
VIX Fear Index fell steeply to 18.24 intraday on 6/18/12, down from an intraday peak of 27.73 on 6/4/12. This suggests a rapid shift from concern toward 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
1362.93, Fibonacci 61.8% of April-June 2012 range
1347.39, 50-day SMA
The S&P 500 Composite Potential Support
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
1303.47, Fibonacci 23.6% of April-June 2012 range
1306.62, low of 6/12/2012
1291.98, low of 5/18/2012
1289.59, Fibonacci 38.2% of 2011-12 range
1292.45, 200-day SMA
1266.74, low of 6/4/2012
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) price has had a normal, minor correction and remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA every day since 6/24/11. Support 124.39, 122.06, 120.60, 117.44, 115.69, 114.82, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance. 130.38.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) price has had a normal, minor correction and remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA every day since 6/21/11. Support 107.51, 107.43, 105.85, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance 109.37.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below its lows of the previous 7 months on 6/1/12. Systematically, JNK/LQD remains bearish: below its 50-day SMA, below its 200-day SMA, and the 50-day SMA fell below the 200-day SMA on 6/1/12.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below its lows of the previous 5 months on 6/1/12. Systematically, TIP/IEF remains neutral: below its 50-day SMA, below its 200-day SMA, and the 50-day SMA remains above the 200-day SMA–although that 50-200 SMA spread is narrowing and could cross in weeks ahead, thereby turning bearish.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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
1.22% , IGN , Networking, IGN
0.73% , PWC , LargeCap Blend Dynamic PS, PWC
2.28% , KWT , Solar Energy MV, KWT
1.92% , IYT , Transportation Av DJ, IYT
4.48% , EBAY , EBAY
4.13% , LEN , Lennar Corp. (LEN)
3.90% , DHI , D.R. HORTON, DHI
0.20% , ISI , LargeCap Blend S&P 1500 iS, ISI
1.20% , PWO , OTC Dynamic PS, PWO
1.42% , ITF , Japan LargeCap Blend TOPIX 150, ITF
4.77% , THC , TENET HEALTHCARE
0.72% , IJJ , Value MidCap S&P 400 B, IJJ
0.71% , RFV , Value MidCap S&P 400, RFV
0.39% , VPU , Utilities VIPERs, VPU
0.62% , IYW , Technology DJ US, IYW
3.91% , ISIL , INTERSIL CORP
2.79% , RF , REGIONS FINAN
1.74% , MVV , Ultra MidCap400 Double, MVV
2.52% , SIL , Silver Miners Global X, SIL
3.56% , PETM , PETsMART Inc
2.95% , VRSN , VeriSign Inc
0.29% , VIS , Industrials VIPERs, VIS
1.25% , PKB , Building & Construction, PKB
1.33% , JKH , MidCap Growth iS M, JKH
4.60% , KSU , Kansas City Southern, KSU
1.39% , SOXX , Semiconductor iS IGW, SOXX
1.88% , QLD , Ultra QQQ Double, QLD
2.03% , AAPL , APPLE COMPUTER
1.45% , STLD , Steel Dynamics, STLD
1.20% , ASH , ASHLAND
0.61% , ILF , Latin Am 40, ILF
0.23% , PFF , Preferred Stock iS, PFF
1.95% , TMK , TORCHMARK
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.39% , MUB , Bond Muni ATM-Free S&P iS, MUB
-0.86% , MYY , Short 100% MidCap 400, MYY
-1.65% , PXJ , Oil & Gas, PXJ
-2.57% , EPI , India Earnings WTree, EPI
-0.84% , NBR , NABORS
-0.91% , GT , GOODYEAR TIRE
-0.31% , IWC , Microcap Russell, IWC
-0.35% , DGT , Global Titans, DGT
-2.25% , JCP , JC PENNEY
-2.44% , CHKP , Check Point Software Technologies Ltd
-0.77% , IXC , Energy Global, IXC
-0.30% , RZV , Value SmallCap S&P 600, RZV
-0.92% , IEV , Europe 350 S&P Index, IEV
-2.73% , HPQ , HEWLETT PACKARD
-1.83% , MMC , MARSH & MCLENNAN
-3.09% , PIN , India PS, PIN
-1.43% , SLE , SARA LEE
-1.68% , OXY , OCCIDENTAL
-1.33% , EZU , EMU Europe Index, EZU
-0.94% , TUR , Turkey MSCI iS, TUR
-2.70% , EWI , Italy Index, EWI
-3.02% , BC , BRUNSWICK
-0.48% , JKF , Value LargeCap iS M, JKF
-1.78% , QID , Short 200% QQQ PS, QID
-0.21% , RPV , Value S&P 500, RPV
-2.65% , MRO , MARATHON OIL
-0.40% , KEY , KEYCORP
-1.87% , SIRI , Sirius Satellite
-0.40% , TXT , TEXTRON
-0.87% , IYE , Energy DJ, IYE
-0.35% , EWM , Malaysia Index, EWM
-1.62% , MZZ , Short 200% MidCap 400 PS, MZZ
-0.02% , SHY , Bond, 1-3 Year Treasury, SHY
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.98% Homebuilders SPDR, XHB
1.92% Transportation Av DJ, IYT
1.88% South Africa Index, EZA
1.42% Mexico Index, EWW
1.41% WilderHill Clean Energy PS, PBW
1.39% Semiconductor iS IGW, SOXX
1.32% Semiconductor SPDR, XSD
1.25% Australia Index, EWA
1.22% Networking, IGN
1.12% Agriculture DB PS, DBA
1.09% Pacific ex-Japan, EPP
1.06% Growth MidCap 400 B, IJK
0.97% MidCap S&P 400 iS, IJH
0.94% QQQ Nasdaq 100 Trust, QQQ
0.87% Realty Cohen & Steers, ICF
0.87% REIT Wilshire, RWR
0.85% Growth MidCap Russell, IWP
0.84% Emerging 50 BLDRS, ADRE
0.83% REIT VIPERs, VNQ
0.83% Singapore Index, EWS
0.81% MidCap S&P 400 SPDRs, MDY
0.80% Info Tech VIPERs, VGT
0.78% Real Estate US DJ, IYR
0.78% Biotech SPDR, XBI
0.74% Technology SPDR, XLK
0.72% Value MidCap S&P 400 B, IJJ
0.71% Consumer Discretionary SPDR, XLY
0.70% Chile MSCI iS, ECH
0.70% South Korea Index, EWY
0.68% Water Resources, PHO
0.67% Health Care SPDR, XLV
0.67% MidCap Russell, IWR
0.62% Growth VIPERs, VUG
0.62% Technology DJ US, IYW
0.61% Latin Am 40, ILF
0.59% Growth SmallCap VIPERs, VBK
0.54% Bond, 20+ Years Treasury, TLT
0.53% Growth 1000 Russell, IWF
0.52% Frontier Markets Guggenheim , FRN
0.52% Materials SPDR, XLB
0.50% Indonesia MV, IDX
0.49% Growth S&P 500/BARRA, IVW
0.47% Dividend DJ Select, DVY
0.46% Pacific VIPERs, VPL
0.44% Basic Materials DJ US, IYM
0.42% Growth SmallCap R 2000, IWO
0.40% Emerging VIPERs, VWO
0.39% Utilities VIPERs, VPU
0.38% Utilities SPDR, XLU
0.36% LargeCap 1000 R, IWB
0.35% Small Cap VIPERs, VB
0.35% Canada Index, EWC
0.32% China 25 iS, FXI
0.31% Value MidCap Russell, IWS
0.31% Growth BARRA Small Cap 600, IJT
0.31% Dividend SPDR, SDY
0.31% Hong Kong Index, EWH
0.29% Blend Total Market VIPERs, VTI
0.28% Japan Index, EWJ
0.27% LargeCap Blend S&P=Weight R, RSP
0.27% Brazil Index, EWZ
0.26% Consumer Staples SPDR, XLP
0.25% Taiwan Index, EWT
0.24% LargeCap VIPERs, VV
0.24% Industrial SPDR, XLI
0.24% LargeCap Blend Russell 3000, IWV
0.24% Bond EmrgMkt JPM iS, EMB
0.23% Preferred Stock iS, PFF
0.23% S&P 500 iS LargeCap Blend, IVV
0.22% Silver Trust iS, SLV
0.21% Dividend High Yield Equity PS, PEY
0.21% Emerging Markets, EEM
0.20% Small Cap EAFE MSCI iS, SCZ
0.19% Dividend Appreciation Vipers, VIG
0.19% S&P 500 SPDRs LargeCap Blend, SPY
0.18% SmallCap S&P 600, IJR
0.18% Telecom DJ US, IYZ
0.14% Value SmallCap VIPERS, VBR
0.14% Global ex US ACWI iS, ACWX
0.13% China LargeCap Growth G D H USX PS, PGJ
0.12% SmallCap Russell 2000, IWM
0.11% LargeCap Blend S&P 100, OEF
0.11% Financial Preferred, PGF
0.08% Commodity Tracking, DBC
0.07% Value 1000 Russell, IWD
0.06% Gold Shares S.T., GLD
0.03% Bond, High-Yield Corporate, HYG
-0.01% Bond Treasury Short-Term iS, SHV
-0.02% Value LargeCap Dynamic PS, PWV
-0.02% Bond, 1-3 Year Treasury, SHY
-0.03% Bond, Aggregate, AGG
-0.03% Bond, 10 Year Treasury, IEF
-0.04% Bond, Corp, LQD
-0.05% Bond, TIPS, TIP
-0.10% Value S&P 500 B, IVE
-0.14% Dividend International, PID
-0.15% Growth EAFE MSCI, EFG
-0.16% Value SmallCap Russell 2000, IWN
-0.16% Value VIPERs, VTV
-0.16% DIAMONDS (DJIA), DIA
-0.18% Metals & Mining SPDR, XME
-0.18% Bond, High-Yield Junk, JNK
-0.19% Value SmallCap S&P 600 B, IJS
-0.22% Bear, Short S&P 500, SH
-0.24% Financial DJ US, IYF
-0.24% United Kingdom Index, EWU
-0.28% EAFE Index, EFA
-0.31% Microcap Russell, IWC
-0.35% Switzerland Index, EWL
-0.35% Malaysia Index, EWM
-0.36% Capital Markets KWB ST, KCE
-0.37% Bond Ex-US Treas, BWX
-0.39% Bond Muni ATM-Free S&P iS, MUB
-0.39% Financials VIPERs, VFH
-0.41% Value EAFE MSCI, EFV
-0.43% Sweden Index, EWD
-0.46% Global 100, IOO
-0.54% Energy & Nat Res iS GS, IGE
-0.56% Financial SPDR, XLF
-0.59% Financial Services DJ, IYG
-0.75% Thailand MSCI iS, THD
-0.77% Energy Global, IXC
-0.86% Germany Index, EWG
-0.87% Energy DJ, IYE
-0.89% Belgium Index, EWK
-0.89% Netherlands Index, EWN
-0.90% Energy SPDR, XLE
-0.92% Europe 350 S&P Index, IEV
-0.94% European VIPERs, VGK
-0.94% Turkey MSCI iS, TUR
-0.98% Oil, Crude, U.S. Oil Fund, USO
-0.98% Energy VIPERs, VDE
-0.99% Russia MV, RSX
-1.16% Oil Fund PowerShares, DBO
-1.19% Austria Index, EWO
-1.33% EMU Europe Index, EZU
-1.34% France Index, EWQ
-2.57% India Earnings WTree, EPI
-2.70% Italy Index, EWI
-3.09% India PS, PIN
-3.59% Spain Index, EWP
