Loss of Technical Power Is Increasingly Evident

The stock market’s general trend has been upward for 5 months, obviously, but loss of technical power is increasingly evident.

Absolute price of the NASDAQ Composite remains below its 11-year intraday high of 3000.11 set on 2/29/12, and NASDAQ trading volume has declined on the bounce-back since 3/6/12.

The broad-based Wilshire 5000 stock price index has stalled out below its 2011 high.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below its 50-day SMA on 3/9/12. EFA/SPY is bearish below both its 50-day and 200-day SMAs, and with the 50-day SMA below the 200-day SMA consistently every day since 1/14/11.

The S&P 500 Composite (SPX: 1,370.87) rose 0.09% last week, but volume and price momentum indicators were weak.

On days when stock prices rise, volume has languished at low levels, suggesting weak demand for stocks. In contrast, on days when stock prices fall, volume has increased, suggesting more aggressive selling of stocks.

One of the most popular technical indicators, RSI(14), fell below its lows of year 2012 and fell below 50 on Tuesday 3/6/12, indicating bearish price momentum. RSI lagged during the price bounce back toward the highs over the past 3 trading days. Previously, RSI gave early warning, bearish divergence by failing to confirm higher price highs over the past month, since 2/9/12.

Net New Highs on the NYSE topped out at 300 on 2/3/12 and fell to -4 on 3/6/12. They bounced back, but only half-way, to 155 on Friday. This shows a loss of bullish power.

MACD peaked on 2/9/12 and turned bearish, falling below its Signal Line, on 2/15/12.

Expect resistance near the 2011 highs, around the intraday peak on the SPX at 1370.58 set on 5/2/2011, allowing plus or minus a few percentage points for Gann’s “lost motion”.

Overbought, up big from the October low, and with little room above before encountering resistance, Potential Reward relative to potential Risk appears unattractive for stocks.
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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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9 major U.S. stock sectors ranked in order of long-term relative strength:
Available by subscription only (click here).
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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
0.52% , PRF , Value LargeCap Fundamental RAFI 1000, PRF
1.42% , PIC , Insurance, PIC
0.38% , ISI , LargeCap Blend S&P 1500 iS, ISI
5.02% , MTG , MGIC INVESTMENT
6.92% , S , SPRINT NEXTEL
4.45% , FHN , First Horizon National
1.43% , JKK , Growth SmallCap iS M, JKK
0.66% , PSJ , Software, PSJ
1.65% , ADRA , Asia 50 BLDRS, ADRA
3.03% , AM , AMER GREETINGS STK A
1.69% , ESRX , EXPRESS SCRIPTS
6.25% , DHI , D.R. HORTON, DHI
3.86% , CLF , CLIFFS NATURAL RESOURCES, CLF
3.55% , X , US STEEL CORP
3.37% , PMTC.O , PARAMETRIC
1.11% , JKL , Value SmallCap iS M, JKL
1.93% , NKE , NIKE STK B
0.86% , PEY , Dividend High Yield Equity PS, PEY
1.35% , MHS , MEDCO HEALTH
2.35% , XME , Metals & Mining SPDR, XME
2.92% , SBUX , STARBUCKS
1.96% , APC , ANADARKO PETRO
2.39% , JBL , JABIL CIRCUIT
0.93% , IGV , Software, IGV
3.67% , SHLD , SEARS HOLDINGS
1.75% , AVP , AVON
2.24% , WY , WEYERHAEUSER
2.24% , NVLS , NOVELLUS SYS
2.63% , NTAP , NETWK APPLIANCE
2.14% , WAG , WALGREEN
2.40% , VMC , VULCAN MATERIALS
2.40% , SIRI , Sirius Satellite
1.98% , XHB , Homebuilders SPDR, XHB

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-35.61% , DYN , DYNEGY
-1.12% , WPO , Washington Post
-2.00% , MZZ , Short 200% MidCap 400 PS, MZZ
-1.35% , TUR , Turkey MSCI iS, TUR
-2.49% , JCP , JC PENNEY
-1.75% , HMA , HEALTH MGMT STK A
-2.35% , HES , AMERADA HESS
-1.29% , SPG , SIMON PROP GRP
-1.09% , THC , TENET HEALTHCARE
-1.87% , HPQ , HEWLETT PACKARD
-0.45% , SCZ , Small Cap EAFE MSCI iS, SCZ
-1.82% , FCX , FREEPRT MCMORAN STK B
-1.23% , CCL , CARNIVAL STK A
-0.80% , EWN , Netherlands Index, EWN
-1.13% , GOOG , Google
-0.19% , IOO , Global 100, IOO
-1.51% , EWP , Spain Index, EWP
-0.57% , EWG , Germany Index, EWG
-0.84% , HUM , HUMANA
-0.03% , ADRU , Europe 100 BLDRS, ADRU
-0.82% , OMC , OMNICOM
-1.21% , MDT , MEDTRONIC
-1.63% , DELL , DELL
-0.37% , ININ , Interactive Intelligence ININ
-1.19% , BA , BOEING
-2.28% , EWI , Italy Index, EWI
-1.01% , AN , AUTONATION
-0.74% , EMN , EASTMAN CHEM
-0.68% , THD , Thailand MSCI iS, THD
-0.57% , EWL , Switzerland Index, EWL
-0.34% , LBTYA , Liberty Global Inc. (LBTYA)
-0.75% , PEG , PUBL SVC ENTER
-1.97% , MSI , Motorola Solutions, MSI
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.55% WilderHill Clean Energy PS, PBW
2.35% Metals & Mining SPDR, XME
2.28% India Earnings WTree, EPI
1.98% Homebuilders SPDR, XHB
1.64% India PS, PIN
1.39% Value SmallCap Russell 2000, IWN
1.37% Growth SmallCap R 2000, IWO
1.36% Value SmallCap S&P 600 B, IJS
1.35% SmallCap Russell 2000, IWM
1.32% Capital Markets KWB ST, KCE
1.29% Small Cap VIPERs, VB
1.29% SmallCap S&P 600, IJR
1.28% Microcap Russell, IWC
1.26% Growth SmallCap VIPERs, VBK
1.23% Value SmallCap VIPERS, VBR
1.20% Growth BARRA Small Cap 600, IJT
1.17% Telecom DJ US, IYZ
1.15% Value MidCap S&P 400 B, IJJ
1.13% Silver Trust iS, SLV
1.09% Semiconductor iS IGW, SOXX
0.97% MidCap S&P 400 SPDRs, MDY
0.95% MidCap S&P 400 iS, IJH
0.93% Semiconductor SPDR, XSD
0.86% Dividend High Yield Equity PS, PEY
0.82% Growth MidCap 400 B, IJK
0.82% Financial DJ US, IYF
0.81% Financial SPDR, XLF
0.81% Financial Services DJ, IYG
0.81% Financials VIPERs, VFH
0.81% Value MidCap Russell, IWS
0.76% Growth MidCap Russell, IWP
0.76% Biotech SPDR, XBI
0.74% MidCap Russell, IWR
0.72% China LargeCap Growth G D H USX PS, PGJ
0.70% Networking, IGN
0.68% Oil Fund PowerShares, DBO
0.67% LargeCap Blend S&P=Weight R, RSP
0.67% Gold Shares S.T., GLD
0.66% Oil, Crude, U.S. Oil Fund, USO
0.64% Water Resources, PHO
0.57% Consumer Discretionary SPDR, XLY
0.57% China 25 iS, FXI
0.55% Value S&P 500 B, IVE
0.54% LargeCap Blend Russell 3000, IWV
0.53% Utilities VIPERs, VPU
0.52% Dividend DJ Select, DVY
0.52% Info Tech VIPERs, VGT
0.52% Realty Cohen & Steers, ICF
0.51% Value 1000 Russell, IWD
0.50% Blend Total Market VIPERs, VTI
0.49% REIT VIPERs, VNQ
0.49% LargeCap 1000 R, IWB
0.48% Dividend SPDR, SDY
0.47% REIT Wilshire, RWR
0.46% Real Estate US DJ, IYR
0.45% Technology SPDR, XLK
0.44% Technology DJ US, IYW
0.43% LargeCap VIPERs, VV
0.42% Growth VIPERs, VUG
0.42% QQQ Nasdaq 100 Trust, QQQ
0.41% Health Care SPDR, XLV
0.40% Utilities SPDR, XLU
0.40% Japan Index, EWJ
0.39% S&P 500 iS LargeCap Blend, IVV
0.39% S&P 500 SPDRs LargeCap Blend, SPY
0.39% Canada Index, EWC
0.37% Basic Materials DJ US, IYM
0.35% Dividend Appreciation Vipers, VIG
0.34% Indonesia MV, IDX
0.34% Value VIPERs, VTV
0.33% Consumer Staples SPDR, XLP
0.31% Growth 1000 Russell, IWF
0.29% Value LargeCap Dynamic PS, PWV
0.29% Growth S&P 500/BARRA, IVW
0.27% Commodity Tracking, DBC
0.26% Dividend International, PID
0.25% Transportation Av DJ, IYT
0.24% LargeCap Blend S&P 100, OEF
0.22% Industrial SPDR, XLI
0.20% Bond, 20+ Years Treasury, TLT
0.18% Russia MV, RSX
0.18% Preferred Stock iS, PFF
0.18% DIAMONDS (DJIA), DIA
0.18% Bond, TIPS, TIP
0.17% Energy & Nat Res iS GS, IGE
0.14% Emerging 50 BLDRS, ADRE
0.13% Pacific VIPERs, VPL
0.13% Bond EmrgMkt JPM iS, EMB
0.11% Financial Preferred, PGF
0.11% Bond, High-Yield Corporate, HYG
0.06% Energy VIPERs, VDE
0.03% Materials SPDR, XLB
0.02% Mexico Index, EWW
0.01% Bond Treasury Short-Term iS, SHV
0.00% South Korea Index, EWY
0.00% Malaysia Index, EWM
0.00% Hong Kong Index, EWH
0.00% Bond, High-Yield Junk, JNK
0.00% Bond, 1-3 Year Treasury, SHY
-0.02% Bond, Aggregate, AGG
-0.03% Chile MSCI iS, ECH
-0.05% Emerging Markets, EEM
-0.05% Bond, Corp, LQD
-0.08% Bond, 10 Year Treasury, IEF
-0.09% South Africa Index, EZA
-0.09% Energy DJ, IYE
-0.09% Energy SPDR, XLE
-0.10% Emerging VIPERs, VWO
-0.13% Bond Muni ATM-Free S&P iS, MUB
-0.15% Taiwan Index, EWT
-0.19% Global 100, IOO
-0.20% Frontier Markets Guggenheim , FRN
-0.22% Australia Index, EWA
-0.22% Global ex US ACWI iS, ACWX
-0.25% Agriculture DB PS, DBA
-0.25% Pacific ex-Japan, EPP
-0.29% United Kingdom Index, EWU
-0.31% Singapore Index, EWS
-0.33% EAFE Index, EFA
-0.34% Value EAFE MSCI, EFV
-0.41% Bear, Short S&P 500, SH
-0.44% Energy Global, IXC
-0.45% Small Cap EAFE MSCI iS, SCZ
-0.47% Growth EAFE MSCI, EFG
-0.57% Germany Index, EWG
-0.57% Switzerland Index, EWL
-0.58% Latin Am 40, ILF
-0.67% Belgium Index, EWK
-0.68% Thailand MSCI iS, THD
-0.70% Europe 350 S&P Index, IEV
-0.80% Netherlands Index, EWN
-0.83% Bond Ex-US Treas, BWX
-0.98% Austria Index, EWO
-1.00% European VIPERs, VGK
-1.08% EMU Europe Index, EZU
-1.12% Brazil Index, EWZ
-1.26% France Index, EWQ
-1.35% Turkey MSCI iS, TUR
-1.51% Spain Index, EWP
-1.74% Sweden Index, EWD
-2.28% Italy Index, EWI