Materials Stock Sector Relative Strength Ratio (XLB/SPY) broke down below 3-year lows on 9/4/12, thereby confirming its preexisting major downtrend. XLB/SPY fell below its 50-day SMA on 8/23/12, thereby turning systematically bearish again. The XLB/SPY has generally stayed below its 50-day SMA, except for just a few days over the past 3 months. XLB/SPY has been bearish most of the time since 6/8/11, when its 50-day SMA crossed below its 200-day SMA. XLB absolute price broke below 4-week lows on 9/4/12. Price is now systematically bearish: below its 50-day SMA, below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA since 6/26/12.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) whipsawed back down below its 50-day SMA on 9/4/12, thereby turning systematically bearish again. EFA/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/14/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) fell below its 50-day SMA on 9/4/12, thereby turning systematically neutral. OEF/SPY remains above its 200-day SMA, and the 50-day SMA has been above the 200-day SMA consistently every day since 8/24/11.
The S&P 500 (SPX: 1,404.94) fell 1.64 points or 0.09% on Tuesday. SPX broke below 3-week lows intraday at 10:57 a.m. before recovering nearly all of its loss in the afternoon.
NYSE volume rose 9% but still was 16% below its 200-day SMA. Volume has been falling to its lowest levels in 13 years, reflecting diminishing enthusiasm for stocks. NYSE Volume 50-day SMA and 200-day SMA have fallen to their lowest levels in 13 years, and both are trending down.
MACD and other price momentum indicators have rolled over and given sell signals.
On-Balance Volume for the SPX remains in a downtrend with bearish divergence.
NYSE volume rose 9% but still was 16% below its 200-day SMA. Volume fell to its lowest levels in 13 years in August, reflecting diminishing enthusiasm for stocks. NYSE Volume 50-day SMA and 200-day SMA fell to their lowest levels in 13 years, and both are trending down.
It takes volume to push prices up. After the shorts have been forced to cover and the longs have had their fill of buying, in the absence of a fresh source of demand, stocks fall of their own weight.
While the S&P 500 Composite Price Index recovered nearly all of its April-June loss, both the percentage of these same 500 stocks that were above their 200-day SMAs and the percentage in bullish Point-and-Figure Chart uptrends recovered much less of their losses. Both indicators failed to confirm the strength in the S&P 500. Both are diverging bearishly. The percentage of these 500 stocks that are above their 50-day SMAs and the percentage above their 200-day SMAs both broke below 4-week lows on Thursday, 8/30/12.
With the stock price indexes far above their 4-year lows and still very close to the top end of their 4-year price range, downside risk may exceed upside potential for the stock market. Choosing safety over risk appears to be the most reasonable approach for conservative traders and investors.
*For extensive coverage of major global markets with illustrative charts, take a free trial for my weekly report —
click here.
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Hedge funds and equity mutual funds both lost money last year, 2011, and some are down again this year as well.
Meanwhile, one money manager made gains for 5 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).
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The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) fell below its 50-day SMA on 9/4/12, thereby turning systematically neutral. OEF/SPY remains 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) rose above its 50-day SMA on 9/4/12, thereby turning systematically neutral. IWM/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA consistently every day since 4/20/12.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) MDY/SPY whipsawed back above its 50-day SMA on 8/28/12, thereby turning systematically neutral again. MDY/SPY remains below its 200-day SMA, and its 50-day SMA has been below its 200-day SMA since 6/6/12.
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VIX Fear Index rose to18.96 on 9/4/12, its highest level in more than 4 weeks, but still below its 10-year average of 21.50. Previously, VIX fell to 13.30 intraday on 8/17/12, its lowest level in more than 5 years, since 6/20/07. VIX fell from an intraday peak of 27.73 on 6/4/12. This large drop suggests a 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
1426.68, high of 8/21/2012
1422.38, high of 4/2/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
The S&P 500 Composite Potential Support
1391.04, low of 8/6/2012
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
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1377.92, 50-day SMA
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1362.93, Fibonacci 61.8% of April-June 2012 range
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
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
1338.86, 200-day SMA
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
1326.19, Fibonacci 38.2% of April-June 2012 range
1325.41, low of 7/12/2012
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
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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Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) rose above its 50-day SMA on 8/31/12 turning systematically bullish again. TLT remains above its 200-day SMA, and its 50-day SMA has remained above its 200-day SMA every day since 6/24/11. TLT rose to a new high on 7/24/12, thereby confirming its preexisting major uptrend. Support 124.95, 120.52, 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: 130.69 and 132.22.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) rose above its 50-day SMA on 8/31/12 turning systematically bullish again. IEF remains above its 200-day SMA, and its 50-day SMA has remained above its 200-day SMA every day since 6/21/11. IEF rose to a new high on 7/24/12, thereby confirming its preexisting major uptrend. Support 107.92, 106.42, 105.84, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance: 109.32 and 109.89.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) whipsawed back down below its 50-day SMA on 9/4/12, thereby turning systematically bearish again. JNK/LQD remains below its 200-day SMA, and its 50-day SMA fell below its 200-day SMA on 6/1/12.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) whipsawed back up above its 50-day SMA on 9/4/12, thereby turning systematically neutral. TIP/IEF remains below its 200-day SMA, and its 50-day SMA crossed below its 200-day SMA on 6/27/12.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) remains systematically neutral: below its 50-day SMA, below its 200-day SMA, and its 50-day SMA has stayed above its 200-day SMA every day since 10/26/11. Support 22.14, 21.89, 21.74, 21.58, 21.07, and 20.84. Resistance 23.14, 23.52, 25.84, 27.19, 28.97.
CRB Commodity Price Index remains systematically neutral: above its 50-day SMA, above its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 8/18/11.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and its 50-day SMA rose above its 200-day SMA on 8/13/12. High food prices could bring trouble for the general economy because more consumer spending for food means less consumer spending available for other goods and services.
Crude Oil, United States Oil ETF (USO) turned systematically neutral on 7/16/12, when price rose above its 50-day SMA. USO remains below its 200-day SMA, and its 50-day remains far below its 200-day SMA. Support 34.34, 32.45, 31.40, 29.02, 26.28, and 22.74. Resistance 36.97, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) rose above its 200-day SMA on 8/22/12 but remains systematically neutral. GLD remains above its 50-day SMA, but its 50-day SMA has stayed below its 200-day SMA every day since 4/17/12. Support: 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 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) rose above its 50-day SMA on 8/16/12, thereby turning systematically neutral. GDX/GLD remains below its 200-day SMA, and its 50-day SMA has remained bearishly below its 200-day SMA every day since 2/22/11.
Silver, iShares Silver Trust ETF (SLV) price rose above its 50-day SMA on 8/3/12, thereby turning systematically neutral. SLV price rose above its 200-day SMA on 8/31/12. The price 50-day SMA has remained below its 200-day SMA every day since 10/27/11. Support 29.28, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 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) rose above its 200-day SMA on 8/31/12 but remains systematically neutral. SLV/GLD remains above its 50-day SMA, but its 50-day SMA has stayed below its 200-day SMA every day since 8/30/11.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price whipsawed back above its 50-day SMA on 8/21/12, thereby turning systematically neutral again for the short term. Longer term, JJC fell to its lowest level in 8 months on 8/2/12, thereby confirming its major bearish trend. JJC price remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 5/31/12. In addition, JJC remains far below its 2011 high at 61.69 and has underperformed the stock market since 12/31/10. Given that “Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, this relative 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 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
2.21% , MVV , Ultra MidCap400 Double, MVV
1.20% , IJH , MidCap S&P 400 iS, IJH
5.23% , ODP , OFFICE DEPOT
0.66% , VOX , Telecom Services VIPERs, VOX
2.37% , XBI , Biotech SPDR, XBI
0.74% , SHLD , SEARS HOLDINGS
4.12% , RSH , RADIOSHACK
2.22% , ISI , LargeCap Blend S&P 1500 iS, ISI
0.85% , IWN , Value SmallCap Russell 2000, IWN
4.92% , CECO , CAREER EDUCATION CORP
2.49% , WOR , WORTHINGTON INDS
1.16% , RZV , Value SmallCap S&P 600, RZV
4.72% , PWER , POWER ONE
1.25% , IJT , Growth BARRA Small Cap 600, IJT
0.57% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
1.05% , IJS , Value SmallCap S&P 600 B, IJS
2.00% , SNPS , Synopsys Inc
1.77% , VZ , VERIZON COMMS
2.07% , OMX , OFFICEMAX INC., OMX
1.90% , MDP , MEREDITH
2.15% , CAG , CONAGRA FOODS
2.57% , CROX , CROCS Inc., CROX
1.60% , GWW , WW GRAINGER
2.13% , CVG , CONVERGYS
1.05% , SYK , STRYKER
1.15% , IJK , Growth MidCap 400 B, IJK
0.51% , IDU , Utilities DJ, IDU
1.22% , IWM , SmallCap Russell 2000, IWM
0.86% , SNA , SNAP ON
1.62% , PNW , PINNACLE WEST
1.97% , ZMH , ZIMMER HLDGS
1.48% , NI , NISOURCE
0.37% , IYH , Healthcare DJ, IYH
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.56% , PPA , Aerospace & Defense, PPA
-5.22% , AVY , AVERY DENNISON
-6.35% , NFLX , Netflix, NFLX
-5.79% , JBL , JABIL CIRCUIT
-4.24% , MTG , MGIC INVESTMENT
-5.88% , SVU , SUPERVALU
-2.36% , TIF , TIFFANY
-3.03% , DISH , EchoStar Communications
-2.25% , NE , NOBLE
-3.25% , CSX , CSX
-0.51% , TMW , Wilshire 5000 ST TM, TMW
-0.41% , ADRD , Developed 100 BLDRS, ADRD
-2.18% , MZZ , Short 200% MidCap 400 PS, MZZ
-6.03% , CLF , CLIFFS NATURAL RESOURCES, CLF
-3.13% , CAT , CATERPILLAR
-3.00% , HP , Helmerich & Payne HP
-1.79% , EWA , Australia Index, EWA
-0.25% , PBJ , Food & Beverage, PBJ
-1.51% , VPL , Pacific VIPERs, VPL
-1.06% , ILF , Latin Am 40, ILF
-3.04% , ATI , ALLEGHENY TECH
-5.38% , NVDA , NVIDIA
-1.86% , HAL , HALLIBURTON
-2.37% , WYNN , Wynn Resorts L
-0.56% , CBE , COOPER INDS STK A
-0.35% , PXE , Energy Exploration & Prod, PXE
-1.61% , EPP , Pacific ex-Japan, EPP
-1.12% , ETN , EATON
-1.87% , GPC , GENUINE PARTS
-1.95% , IR , INGER RAND
-1.22% , HAR , Harman International
-0.59% , DBO , Oil Fund PowerShares, DBO
-1.32% , WYN , Wyndham Worldwide
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.37% Biotech SPDR, XBI
1.85% Silver Trust iS, SLV
1.60% SmallCap Growth Russell 2000 iS, IWO
1.38% Spain Index, EWP
1.28% Growth SmallCap VIPERs, VBK
1.25% SmallCap Growth S&P 600 iS, IJT
1.22% SmallCap Blend Russell 2000 iS, IWM
1.21% Small Cap VIPERs, VB
1.20% MidCap Blend S&P 400 iS, IJH
1.15% MidCap Growth S&P 400 iS, IJK
1.14% Homebuilders SPDR, XHB
1.13% SmallCap Blend S&P 600 iS, IJR
1.07% Water Resources, PHO
1.05% SmallCap Value S&P 600 iS, IJS
1.00% Value SmallCap VIPERS, VBR
0.96% MidCap Value S&P 400 iS, IJJ
0.94% MidCap S&P 400 SPDRs, MDY
0.94% Italy Index, EWI
0.86% Capital Markets KWB ST, KCE
0.85% SmallCap Value Russell 2000 iS, IWN
0.81% Thailand MSCI iS, THD
0.76% REIT Wilshire, RWR
0.75% Realty Cohen & Steers, ICF
0.73% Microcap Russell, IWC
0.70% REIT VIPERs, VNQ
0.70% Russia MV, RSX
0.66% Telecom DJ US, IYZ
0.64% Dividend High Yield Equity PS, PEY
0.59% Consumer Staples SPDR, XLP
0.58% Belgium Index, EWK
0.55% Malaysia Index, EWM
0.54% Mexico Index, EWW
0.52% EMU Europe Index, EZU
0.50% Real Estate US DJ iS, IYR
0.48% Utilities VIPERs, VPU
0.41% Austria Index, EWO
0.41% Financials VIPERs, VFH
0.39% China LargeCap Growth G D H USX PS, PGJ
0.37% Utilities SPDR, XLU
0.33% Indonesia MV, IDX
0.28% Dividend U.S. DJ iS, DVY
0.27% Turkey MSCI iS, TUR
0.27% MidCap Russell, IWR
0.26% Financial DJ US, IYF
0.25% Growth MidCap Russell, IWP
0.22% Netherlands Index, EWN
0.21% Value MidCap Russell, IWS
0.21% Health Care SPDR, XLV
0.21% Financial Services DJ, IYG
0.19% Dividend SPDR, SDY
0.16% Gold Shares S.T., GLD
0.15% France Index, EWQ
0.14% LargeCap Blend Russell 3000 iS, IWV
0.11% Canada Index, EWC
0.09% South Africa Index, EZA
0.06% Info Tech VIPERs, VGT
0.03% Commodity Tracking, DBC
0.03% Bear, Short S&P 500, SH
0.03% Technology DJ US, IYW
0.03% LargeCap Blend Russell 1000 iS, IWB
0.00% Technology SPDR, XLK
0.00% Financial SPDR, XLF
-0.01% Bond Treasury Short-Term iS, SHV
-0.01% Transportation Av DJ, IYT
-0.04% Bond, 1-3 Year Treasury, SHY
-0.04% Networking, IGN
-0.06% Europe 350 S&P Index, IEV
-0.07% Blend Total Market VIPERs, VTI
-0.07% Growth VIPERs, VUG
-0.08% LargeCap Blend S&P=Weight R, RSP
-0.09% LargeCap Growth S&P 500 iS, IVW
-0.09% S&P 500 SPDRs LargeCap Blend, SPY
-0.10% LargeCap Value Russell 1000 iS, IWD
-0.10% QQQ Nasdaq 100 Trust, QQQ
-0.11% Financial Preferred, PGF
-0.11% LargeCap VIPERs, VV
-0.13% Switzerland Index, EWL
-0.13% Bond, TIPS U.S. Treasury iS, TIP
-0.13% Dividend International, PID
-0.14% Germany Index, EWG
-0.15% Dividend Appreciation Vipers, VIG
-0.18% India PS, PIN
-0.18% India Earnings WTree, EPI
-0.19% Value LargeCap Dynamic PS, PWV
-0.20% Agriculture DB PS, DBA
-0.20% LargeCap Value S&P 500 iS, IVE
-0.21% Value VIPERs, VTV
-0.21% Bond, Intermediate US Aggregate iS, AGG
-0.22% LargeCap Blend S&P 100, OEF
-0.22% Bond, Emerg Mkt JPM iS, EMB
-0.24% Consumer Discretionary SPDR, XLY
-0.26% Bond Ex-US Treas, BWX
-0.28% Taiwan Index, EWT
-0.29% Global LargeCap Blend MSCI iS, ACWI
-0.29% European VIPERs, VGK
-0.31% Bond, 20+ Years Treasury, TLT
-0.35% Global 100, IOO
-0.37% Bond, 10 Year Treasury, IEF
-0.38% SmallCap Blend EAFE MSCI iS, SCZ
-0.39% Bond, Muni S&P ATM-Free iS, MUB
-0.39% LargeCap Growth Russell 1000 iS, IWF
-0.42% LargeCap Blend S&P 500 iS, IVV
-0.47% Emerging VIPERs, VWO
-0.47% United Kingdom Index, EWU
-0.50% DIAMONDS (DJIA), DIA
-0.50% Foreign LargeCap EAFE MSCI iS, EFA
-0.53% Global ex U.S. LargeCap Blend, ACWX
-0.53% Preferred Stock iS, PFF
-0.55% Emerging Markets MSCI iS, EEM
-0.55% Bond, High Yield Corp iBoxx iS, HYG
-0.55% Bond, Long-Term Corp iBoxx iS, LQD
-0.58% Growth EAFE MSCI, EFG
-0.58% Energy VIPERs, VDE
-0.59% Oil Fund PowerShares, DBO
-0.66% South Korea Index, EWY
-0.67% Energy Global, IXC
-0.68% Energy DJ, IYE
-0.70% Dividend ex-U.S. DJ iS, IDV
-0.70% Bond, High-Yield Junk, JNK
-0.71% Energy & Nat Res iS GS, IGE
-0.72% WilderHill Clean Energy PS, PBW
-0.75% Semiconductor SPDR, XSD
-0.77% Energy SPDR, XLE
-0.78% Semiconductor iS IGW, SOXX
-0.79% Frontier Markets Guggenheim , FRN
-0.82% Value EAFE MSCI, EFV
-1.01% Emerging 50 BLDRS, ADRE
-1.05% Industrial SPDR, XLI
-1.06% Latin Am 40, ILF
-1.06% Oil, Crude, U.S. Oil Fund, USO
-1.06% Hong Kong Index, EWH
-1.17% Metals & Mining SPDR, XME
-1.21% Chile MSCI iS, ECH
-1.22% Singapore Index, EWS
-1.29% Materials SPDR, XLB
-1.38% Japan Index, EWJ
-1.49% Basic Materials DJ US, IYM
-1.51% Pacific VIPERs, VPL
-1.61% Pacific ex-Japan, EPP
-1.65% Sweden Index, EWD
-1.79% Australia Index, EWA
