The S&P 500 (SPX: 1,418.07) rose 4.13 points or 0.29% on Friday. For the week as a whole, SPX made little progress, up only 0.13%.
SPX appears to be testing its falling 50-day SMA, now at 1417.16. SPX closed the week above it, but only slightly above it, less than a point. So, the slightest price weakness could easily send SPX back down below its falling 50-day SMA.
SPX price faces technical resistance near the 1,424.41 level, which is the Fibonacci 61.8% retracement of the SPX September-November price range.
NYSE trading volume fell 4% on Friday to a level that was 15% below its 200-day SMA. Low volume indicates tepid demand for stocks.
Speculators appear to be still hoping for some kind of deal on the fiscal cliff, and the majority is hoping for a year-end rally. Neither appear particularly likely.
The technical condition of the stock market has not supported the excessive optimism that the bullish majority of stock investors and traders clearly exhibited over the past several months. Long-term momentum has been showing bearish divergence and has weakened considerably since the SPX price peak on 9/14/12. Choosing safety over risk still appears to be the most reasonable approach for conservative traders and investors.
Our clients’ separately managed accounts preserved capital during the downside correction since September while the S&P 500 fell 8.9%, based on intraday highs and lows from 9/14/12 to 11/16/12. In addition, our clients’ accounts made gains every quarter for the past 6 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).
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Sentiment for Contrary Thinking
Investor sentiment data recently indicated alarming degrees of optimism and bullish complacency as the stock price indexes rose above their 2012 market highs. Elevated levels of optimism are bearish because when the majority is extremely bullish, 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.
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
1474.51, high of 9/14/2012
1464.02, high of 10/18/2012
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1434.27, high of 11/2/2012
1430.53, low of 9/26/2012
1425.53, low of 10/12/2012
1425.48, Fibonacci 23.6% of June-Sept ’12 range
1424.41, Fibonacci 61.8% of Sept-Nov ’12 range
1423.73, high of 12/3/2012
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
The S&P 500 Composite Potential Support
1417.16, 50-day SMA
1415.32, high of 5/1/2012
1409.16, high of 11/23/2012
1403.28, low of 10/26/12
1398.23, low of 12/5/2012
1397.68, low of 11/26/2012
1396.56, low of 9/4/2012
1395.14, Fibonacci 38.2% of June-Sept 2012 range
1391.04, low of 8/6/2012
1388.71, low of 5/3/2012
1386.12, 200-day SMA
1385.43, low of 11/28/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1370.62, Fibonacci 50.0% of June-Sept 2012 range
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
1346.11, Fibonacci 61.8% of June-Sept 2012 range
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
1311.20, Fibonacci 78.6% of June-Sept 2012 range
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
1257.58, Fibonacci 61.8% of 2011 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
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
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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Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) turned systematically bullish on 11/7/12 when price rose above its 50-day SMA. TLT remains above its 200-day SMA, and TLT’s 50-day SMA has remained above the 200-day SMA every day since 6/24/11. Support 123.43, 121.78, 119.87, 118.05, 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: 127.19, 127.72, 130.69, and 132.22.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) turned systematically bullish on 11/7/12 when price rose above its 50-day SMA. IEF remains above its 200-day SMA, and IEF’s 50-day SMA has remained above the 200-day SMA every day since 6/21/11. Support 107.99, 107.25, 106.59, 106.42, 105.84, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance: 109.20, 109.32, and 109.89.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) rose above its 50-day SMA on 11/28/12, thereby turning systematically neutral again. JNK/LQD fell below its 200-day SMA on 9/20/12. JNK/LQD 50-day SMA has remained consistently below the 200-day SMA every day since 6/1/12.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) turned systematically bullish again on 12/6/12 when it rose above its 50-day SMA. TIP/IEF rose above its 200-day SMA on 9/27/12, and the 50-day SMA rose above the 200-day SMA on 10/10/12.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) turned systematically neutral again on 12/6/12 when it rose above its 50-day SMA. UUP fell below its 200-day SMA on 8/31/12, and the 50-day SMA fell below the 200-day SMA on 10/2/12. Support 21.77, 21.57, 21.07, and 20.84. Resistance 22.05, 22.30, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) turned systematically neutral again on 11/30/12 when price crossed back down below its 50-day SMA. The 50-day SMA remains above the 200-day SMA, although the 50-200 spread has been narrowing gradually.
Crude Oil, United States Oil ETF (USO) turned systematically bearish on 9/19/12, when price fell below its 50-day SMA. USO price fell below its 200-day SMA on 9/17/12, and the 50-day SMA has remained below its 200-day SMA consistently every day since 6/7/12. Support 31.00, 29.02, 26.28, and 22.74. Resistance 32.93, 34.70, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) broke down below support at 165.18 on 12/4/12. GLD turned systematically neutral on 11/27/12, when price fell below its 50-day SMA. GLD price rose above its 200-day SMA on 8/22/12. GLD 50-day SMA rose above the 200-day SMA on 9/20/12. Support: 163.20, 162.30, 159.56, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 170.01, 174.07, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) turned systematically neutral on 11/5/12 when it fell below its 50-day SMA. The 50-day SMA has been above the 200-day SMA since 10/19/12, but a bearish crossover seems possible in weeks ahead.
Silver, iShares Silver Trust ETF (SLV) broke down below support at 31.91 and crossed below its 50-day SMA on 12/4/12, thereby turning systematically neutral. The 50-day SMA crossed above the 200-day SMA on 10/1/12. Support 31.48, 31.00, 29.84, 29.28, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 34.08, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) rose above its 50-day SMA on 11/20/12, thereby turning systematically bullish. Longer term, SLV/GLD 50-day SMA crossed above the 200-day SMA on 10/9/12.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) rose above both its 50-day SMA and 200-day SMA on 11/30/12. Long term, JJC has been consolidating losses in Triangle chart pattern trading range between 38.99 and 51.41 for more than a year since October 2011. “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
4.16% , MHP , MCGRAW HILL
5.33% , AVP , AVON
3.50% , AM , AMER GREETINGS STK A
6.73% , SHLD , SEARS HOLDINGS
3.30% , CTXS , CITRIX SYSTEMS
2.59% , LAMR , Lamar Advertising Company
2.24% , RHI , ROBERT HALF
2.07% , LVLT.K , LEVEL 3 COMMUNICATIONS
2.95% , AET , AETNA
1.45% , HOLX , Hologic, Inc., HOLX
2.63% , JPM , J P MORGAN CHASE
1.47% , ABT , ABBOTT LABS
2.27% , VIA.O , VIACOM INC. (New)
2.03% , JCI , JOHNSON CONTROLS
0.20% , JKL , Value SmallCap iS M, JKL
1.02% , IR , INGER RAND
2.65% , APC , ANADARKO PETRO
2.86% , CHKP , Check Point Software Technologies Ltd
2.62% , AIG , AMER INTL GROUP
0.68% , BF.B , BROWN FORMAN STK B
1.25% , EWS , Singapore Index, EWS
1.21% , CAT , CATERPILLAR
0.95% , KMX , CarMax
1.58% , DDS , DILLARD STK A
0.46% , ADRE , Emerging 50 BLDRS, ADRE
2.02% , BK , BANK OF NEW YORK
0.40% , IWS , Value MidCap Russell, IWS
0.86% , RDC , ROWAN COMPANIES
2.61% , BRCM , BROADCOM STK A
0.22% , FDL , Dividend Leaders, FDL
0.59% , IYK , Consumer Non-Cyclical, IYK
1.26% , ITT , ITT INDS
0.20% , JKD , LargeCap Blend Core iS M, JKD
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.55% , FMCN , Focus Media, FMCN
-0.89% , EPU , Peru MSCI iS, EPU
-5.72% , BIG , BIG LOTS
-0.45% , PGJ , China LargeCap Growth G D H USX PS, PGJ
-3.12% , BC , BRUNSWICK
-1.14% , SEE , SEALED AIR
-1.07% , PIN , India PS, PIN
-0.42% , XBI , Biotech SPDR, XBI
-1.68% , CSX , CSX
-0.79% , QLGC , QLOGIC
-0.50% , XLK , Technology SPDR, XLK
-0.92% , TLT , Bond, 20+ Years Treasury, TLT
-0.24% , BWX , Bond Ex-US Treas, BWX
-1.21% , DISCA , Discovery Communications
-0.38% , VGK , European VIPERs, VGK
-0.48% , NCR , NCR
-0.54% , GS , GOLDMAN SACHS
-0.74% , CSCO , CISCO SYSTEMS
-0.39% , IGN , Networking, IGN
-0.10% , ACWX , Global ex US ACWI iS, ACWX
-0.11% , IDX , Indonesia MV, IDX
-1.08% , WMB , WILLIAMS
-0.25% , SCZ , Small Cap EAFE MSCI iS, SCZ
-1.49% , PPG , PPG INDUSTRIES
-0.62% , JNY , JONES APPAREL
-0.70% , JBL , JABIL CIRCUIT
-0.30% , CMCSA , COMCAST HOLDINGS STK A
-0.73% , CTAS , CINTAS
-0.59% , SLM.O , SLM CORP
-0.70% , S , SPRINT NEXTEL
-0.29% , PBE , Biotech & Genome, PBE
-0.51% , ECH , Chile MSCI iS, ECH
-0.11% , DBC , Commodity Tracking, DBC
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.25% Singapore Index, EWS
0.91% Financial Services DJ, IYG
0.88% Basic Materials DJ US, IYM
0.87% Australia Index, EWA
0.84% Materials SPDR, XLB
0.79% Financial SPDR, XLF
0.75% Metals & Mining SPDR, XME
0.75% Pacific ex-Japan, EPP
0.70% Consumer Staples SPDR, XLP
0.69% Turkey MSCI iS, TUR
0.69% Russia MV, RSX
0.66% Financials VIPERs, VFH
0.66% Industrial SPDR, XLI
0.65% Value LargeCap Dynamic PS, PWV
0.63% DIAMONDS (DJIA), DIA
0.62% Energy VIPERs, VDE
0.60% Energy SPDR, XLE
0.59% Energy DJ, IYE
0.58% South Korea Index, EWY
0.58% Pacific VIPERs, VPL
0.57% Financial DJ US, IYF
0.57% Brazil Index, EWZ
0.56% LargeCap Value Russell 1000 iS, IWD
0.55% Mexico Index, EWW
0.53% Value VIPERs, VTV
0.52% WilderHill Clean Energy PS, PBW
0.52% LargeCap Value S&P 500 iS, IVE
0.50% LargeCap Blend S&P=Weight R, RSP
0.48% Energy & Nat Res iS GS, IGE
0.47% Dividend Appreciation Vipers, VIG
0.46% Emerging 50 BLDRS, ADRE
0.46% Dividend SPDR, SDY
0.42% Telecom DJ US, IYZ
0.41% Real Estate US DJ iS, IYR
0.40% Gold Shares S.T., GLD
0.40% Value MidCap Russell, IWS
0.38% Consumer Discretionary SPDR, XLY
0.38% REIT Wilshire, RWR
0.37% South Africa Index, EZA
0.37% LargeCap VIPERs, VV
0.37% REIT VIPERs, VNQ
0.37% China 25 iS, FXI
0.36% Frontier Markets Guggenheim , FRN
0.35% Latin Am 40, ILF
0.35% Capital Markets KWB ST, KCE
0.35% LargeCap Blend S&P 500 iS, IVV
0.35% Emerging VIPERs, VWO
0.34% Energy Global, IXC
0.34% Realty Cohen & Steers, ICF
0.32% MidCap Russell, IWR
0.32% Health Care SPDR, XLV
0.32% Japan Index, EWJ
0.32% LargeCap Blend Russell 1000 iS, IWB
0.31% Silver Trust iS, SLV
0.31% S&P 500 SPDRs LargeCap Blend, SPY
0.30% LargeCap Blend Russell 3000 iS, IWV
0.30% Transportation Av DJ, IYT
0.29% Emerging Markets MSCI iS, EEM
0.29% Blend Total Market VIPERs, VTI
0.27% Thailand MSCI iS, THD
0.26% LargeCap Blend S&P 100, OEF
0.24% MidCap Value S&P 400 iS, IJJ
0.21% Semiconductor iS IGW, SOXX
0.19% Dividend U.S. DJ iS, DVY
0.19% Global 100, IOO
0.18% Taiwan Index, EWT
0.18% SmallCap Value S&P 600 iS, IJS
0.18% Growth MidCap Russell, IWP
0.17% Global LargeCap Blend MSCI iS, ACWI
0.17% Value SmallCap VIPERS, VBR
0.15% Dividend ex-U.S. DJ iS, IDV
0.15% Small Cap VIPERs, VB
0.13% MidCap S&P 400 SPDRs, MDY
0.13% Hong Kong Index, EWH
0.11% Switzerland Index, EWL
0.11% United Kingdom Index, EWU
0.11% Dividend High Yield Equity PS, PEY
0.08% SmallCap Value Russell 2000 iS, IWN
0.08% Growth SmallCap VIPERs, VBK
0.08% MidCap Blend S&P 400 iS, IJH
0.08% LargeCap Growth S&P 500 iS, IVW
0.08% SmallCap Growth Russell 2000 iS, IWO
0.07% SmallCap Blend Russell 2000 iS, IWM
0.07% Canada Index, EWC
0.07% Utilities SPDR, XLU
0.07% Utilities VIPERs, VPU
0.06% Dividend International, PID
0.05% Financial Preferred, PGF
0.05% Preferred Stock iS, PFF
0.05% Foreign LargeCap EAFE MSCI iS, EFA
0.04% Homebuilders SPDR, XHB
0.03% Growth VIPERs, VUG
0.01% Bond Treasury Short-Term iS, SHV
0.00% Value EAFE MSCI, EFV
0.00% SmallCap Blend S&P 600 iS, IJR
0.00% MidCap Growth S&P 400 iS, IJK
0.00% Bond, 1-3 Year Treasury, SHY
-0.04% SmallCap Growth S&P 600 iS, IJT
-0.05% Water Resources, PHO
-0.06% LargeCap Growth Russell 1000 iS, IWF
-0.06% Bond, High-Yield Junk, JNK
-0.09% Bond, Intermediate US Aggregate iS, AGG
-0.10% Global ex U.S. LargeCap Blend, ACWX
-0.11% Indonesia MV, IDX
-0.11% Commodity Tracking, DBC
-0.11% Semiconductor SPDR, XSD
-0.12% Growth EAFE MSCI, EFG
-0.12% Bond, TIPS U.S. Treasury iS, TIP
-0.12% Bond, Muni S&P ATM-Free iS, MUB
-0.15% Bond, High Yield Corp iBoxx iS, HYG
-0.17% Agriculture DB PS, DBA
-0.20% Bond, Emerg Mkt JPM iS, EMB
-0.20% Netherlands Index, EWN
-0.20% Malaysia Index, EWM
-0.22% France Index, EWQ
-0.24% Bond, Long-Term Corp iBoxx iS, LQD
-0.24% Bond Ex-US Treas, BWX
-0.25% SmallCap Blend EAFE MSCI iS, SCZ
-0.26% Bear, Short S&P 500, SH
-0.28% Bond, 10 Year Treasury, IEF
-0.29% Europe 350 S&P Index, IEV
-0.30% Microcap Russell, IWC
-0.32% Oil Fund PowerShares, DBO
-0.38% European VIPERs, VGK
-0.39% India Earnings WTree, EPI
-0.39% Networking, IGN
-0.41% Oil, Crude, U.S. Oil Fund, USO
-0.42% Biotech SPDR, XBI
-0.44% Belgium Index, EWK
-0.45% China LargeCap Growth G D H USX PS, PGJ
-0.46% Info Tech VIPERs, VGT
-0.47% EMU Europe Index, EZU
-0.50% Technology SPDR, XLK
-0.51% Chile MSCI iS, ECH
-0.53% Technology DJ US, IYW
-0.55% Germany Index, EWG
-0.58% Sweden Index, EWD
-0.60% QQQ Nasdaq 100 Trust, QQQ
-0.92% Bond, 20+ Years Treasury, TLT
-1.04% Austria Index, EWO
-1.07% India PS, PIN
-1.41% Italy Index, EWI
-1.51% Spain Index, EWP
