Highlights based on trading on Thursday, June 7, 2012:
Gold, SPDR Gold Shares ETF (GLD) whipsawed back down below its 50-day SMA on 6/7/12, turning systematically bearish again.
Materials (XLB) Stock Sector Relative Strength Ratio (XLB/SPY) rose very slightly above its 50-day SMA on 6/7/12, turning systematically neutral. Subjectively, however, I still don’t trust it or like it.
The S&P 500 (SPX: 1,314.99) fell 0.14 points or 0.01% on Thursday. The technology-heavy NASDAQ Composite fell 13.70 points or 0.48%.
Stocks gapped higher on the open but fell steeply at 10:00 a.m. on news that Fed Chairman Bernanke failed to promise further quantitative easing, as some had hoped he would. Stocks recovered partially during the low-volume midsession but fell steeply again in the final hour.
NYSE volume was unchanged from the previous day’s above-average pace. Volume was highest when prices were declining. Volume patterns generally have been weak, with a tendency toward lower volume on rallies and higher volume on declines, indicating the dominance of selling pressure over buying pressure.
After the close on Wednesday 6/5/12, I wrote: “The extent and duration of any further recovery attempt seems highly uncertain, however, because the 2-day price bounce may not be in harmony with the trend in the next larger time frame, which seems more bearish than bullish since the SPX peak at 1,422.38 on 4/2/12.”
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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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Stock Market Indicators
The Dow Theory confirmed a Primary Tide Bear Market on 6/4/12 when both Industrials and Transports closed below their closing price lows of the previous 5 months. The Dow Theory first 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 3 months on 5/18/12 after falling below its 50-day SMA on 4/30/12. Confirming this downtrend, absolute price fell below its lows of the previous 4 months and fell below its 200-day SMA on 6/1/12–this after falling below its 50-day SMA on 5/3/12. Looks like a significant downside correction, at least.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (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.
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Sentiment for Contrary Thinking
Investor sentiment data indicated alarming degrees of optimism and bullish complacency at the February to May 2012 market highs. That was bearish because when the majority of investors has been bullish for some time, 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. Some of the most recent data suggests that investors’ sentiment may be beginning to shift away from bullish complacency. The evidence is mixed, however, and there still is plenty of room for the pendulum of emotion to swing too far in the direction of bearish excess.
AAII Sentiment: There were 51.64% Bulls and 20.19% Bears, according to the AAII weekly survey reported on 2/9/12. This was the highest level of bullish sentiment in more than a year, since 52.34% Bulls on 1/13/11. As of 6/7/12, however, sentiment had reversed, with 27.45% Bulls and 45.75% Bears.
Investors Intelligence Sentiment: according to the Investors Intelligence weekly survey of stock market newsletter advisors, there were 34.0% Bulls and 26.6% Bears reported on 6/6/12. This represents a moderation in sentiment from 2012 extremes of 54.8% Bulls reported on 2/15/11 and 20.4% Bears reported on 5/9/12.
VIX Fear Index fell steeply to 21.74 intraday on 6/7/12, 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
1388.71, low of 5/3/2012
1358.51, 50-day SMA
1381.50, Fibonacci 78.6% of 2007-2009 range
1340.34, Fibonacci 23.6% of 2011-12 range
1340.03, low of 3/6/2012
1334.93, high of 5/31/2012
1329.05, high of 6/7/2012
The S&P 500 Composite Potential Support
1291.98, low of 5/18/2012
1289.59, Fibonacci 38.2% of 2011-12 range
1,287.59, 200-day SMA
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
1226.64, low of 11/9/2011
1222.68, Fibonacci 50% of 2011 range
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1207.56, Fibonacci 61.8% of 2011-12 range
1204.49, Fibonacci 23.6% of 2009-11 range
1202.37, low of 12/19/2011
1187.77, Fibonacci 38.2% of 2011 range
1158.66, low of 11/25/2011
1144.38, Fibonacci 23.6% of 2011 range
1101.73, Fibonacci 38.2% of 2009-11 range
1074.77, low of 10/4/2011
1149.16, Fibonacci 78.6% R of 2011-12 range
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
1018.69, Fibonacci 50% of 2009-11 range
1008.55, Fibonacci 38.2% of 2009-2010 range
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
943.29, Gann 50.0% of 2009-2010 range
935.64, Fibonacci 61.8% of 2009-11 range
878.04, Fibonacci 61.8% of 2009-2010 range
874.17, Gann 62.5% of 2009-2010 range
869.32, low of 7/8/2009
817.40, Fibonacci 78.6% of 2009-11 range
805.17, Gann 75.0% of 2009-2010 range
785.13, Fibonacci 78.6% of 2009-2010 range
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) price has pulled back but 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 126.39, 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 pulled back but 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 107.59, 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 has been above the 200-day SMA every day since 3/14/12.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price has pulled back but remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA. Support 22.64, 22.39, 22.14, 21.89, 21.74, 21.58, 21.07, and 20.84. Resistance 23.02, 23.52, 25.84, 27.19, 28.97.
CRB Commodity Price Index fell below its lows of the previous 19 months on 6/4/12, for another a bearish trend confirmation. Systematically, CRB 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 8/18/11.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below the lows of the previous 20 months on 6/1/12. Systematically, DBA remains bearish, below both its 50-day SMA and 200-day SMAs, and with the 50-day SMA consistently below the 200-day SMA every day since 8/8/11.
Crude Oil, United States Oil ETF (USO) fell further below its lows of the previous 7 months on 6/1/12. USO still looks bearish on the chart. Systematically, USO remains neutral: below its 50-day SMA, below its 200-day SMA, but the 50-day SMA has remained above the 200-day SMA consistently every day since 1/3/12. Support 31.03, 29.10, 26.28, and 22.74. Resistance 32.80, 34.76, 35.19, 36.97, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) whipsawed back down below its 50-day SMA on 6/7/12, turning systematically bearish again: Gold is below its 50-day SMA, below its 200-day SMA, and its 50-day SMA is below its 200-day SMA. Support: 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 159.20, 162.18, 163.20, 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 6/1/12, turning systematically neutral. GDX/GLD remains below its 200-day SMA, and the 50-day SMA has remained bearishly below the 200-day SMA every day since 2/22/11. Absolute price remains systematically bearish.
Silver, iShares Silver Trust ETF (SLV) fell below its lows of the previous 5 months on 6/1/12. Systematically, SLV remains bearish: below its 50-day and 200-day SMAs, and with the 50-day SMA below the 200-day SMA every day since 10/27/11. Support 25.65 and 24.44. Resistance: 29.02, 30.52, 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) fell below its lows of the previous 5 months on 6/4/12, reconfirming a downtrend for the medium term. Systematically, SLV/GLD remains bearish below its 50-day SMA, below its 200-day SMA, and the 50-day SMA has remained bearishly below the 200-day SMA every day since 8/30/11.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the previous 5 months on 6/5/12. JJC turned bearish on 5/31/12 when the 50-day SMA crossed below the 200-day SMA. JJC fell below its 200-day SMA on 5/3/12 and fell below its 50-day SMA on 5/2/12. JJC remains far below its 2011 high at 61.69 and has underperformed the stock market since JJC peaked at 51.41 on 2/9/12. Given that “Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, this 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 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
0.79% , PWC , LargeCap Blend Dynamic PS, PWC
3.98% , EXC , EXELON CORP
0.49% , NYC , LargeCap Blend NYSE Composite iS, NYC
0.61% , ADRU , Europe 100 BLDRS, ADRU
1.01% , JKF , Value LargeCap iS M, JKF
1.44% , NUE , NUCOR
3.68% , RIMM , RESEARCH IN MOTION LTD
0.34% , MYY , Short 100% MidCap 400, MYY
2.80% , BIDU , Baidu, Inc., BIDU
1.13% , MRK , MERCK & CO
0.56% , JKL , Value SmallCap iS M, JKL
2.38% , CIEN.O , CIENA
1.23% , JNS , JANUS CAPITAL
3.21% , GT , GOODYEAR TIRE
1.24% , SYY , SYSCO
1.61% , APD , AIR PRODS & CHEM
1.93% , RFMD , RF Micro Devices Inc
0.52% , MO , ALTRIA, MO
1.06% , BEN , FRANKLIN RSC
1.78% , STT , STATE STREET
0.36% , CINF , CINCINNATI FIN
0.64% , GE , GENERAL ELECTRIC
1.13% , FLEX , Flextronics International Ltd
1.63% , SNA , SNAP ON
1.61% , CMI , CUMMINS
2.39% , UTX , UNITED TECH
0.38% , VDC , Consumer Staples VIPERs, VDC
0.85% , FXI , China 25 iS, FXI
0.89% , BCR , C R BARD
0.76% , PPG , PPG INDUSTRIES
0.81% , XRX , XEROX
1.55% , PG , PROCTER & GAMBLE
0.72% , BMS , BEMIS
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.92% , IGV , Software, IGV
-1.34% , PMR , Retail, PMR
-4.28% , PLL , PALL
-3.84% , SWY , SAFEWAY
-0.96% , BBY , BEST BUY
-6.77% , NIHD , NII Holdings, Inc.
-2.24% , ALTR , ALTERA
-0.46% , PBJ , Food & Beverage, PBJ
-1.50% , SWK , Stanley Black & Decker
-3.43% , MRVL , MARVELL TECHNOLOGY
-2.84% , FII , FED INVESTORS STK B
-1.94% , DDS , DILLARD STK A
-4.04% , NVDA , NVIDIA
-1.49% , NYT , NY TIMES STK A
-0.46% , XEL , XCEL ENERGY
-1.23% , COH , COACH
-2.11% , KMX , CarMax
-0.50% , MKC , MCCORMICK
-4.32% , AMD , ADV MICRO DEV
-1.93% , JNY , JONES APPAREL
-1.85% , LNCR , Lincare Holdings Inc
-1.12% , SNPS , Synopsys Inc
-0.33% , PEJ , Leisure & Entertainment, PEJ
-0.59% , VB , Small Cap VIPERs, VB
-2.03% , SYMC , SYMANTEC
-0.64% , EWO , Austria Index, EWO
-0.64% , XME , Metals & Mining SPDR, XME
-0.22% , DGT , Global Titans, DGT
-0.29% , DTE , DTE ENERGY
-2.87% , SIRI , Sirius Satellite
-0.51% , IGM , Technology GS, IGM
-0.78% , SRCL , Stericycle, SRCL
-2.42% , HUM , HUMANA
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.76% Chile MSCI iS, ECH
1.61% South Korea Index, EWY
1.43% Brazil Index, EWZ
1.33% Agriculture DB PS, DBA
1.18% Capital Markets KWB ST, KCE
1.00% Hong Kong Index, EWH
0.85% China 25 iS, FXI
0.79% Russia MV, RSX
0.79% United Kingdom Index, EWU
0.77% Utilities SPDR, XLU
0.73% India Earnings WTree, EPI
0.67% Utilities VIPERs, VPU
0.65% Emerging 50 BLDRS, ADRE
0.62% Emerging Markets, EEM
0.57% Latin Am 40, ILF
0.57% Industrial SPDR, XLI
0.51% China LargeCap Growth G D H USX PS, PGJ
0.48% DIAMONDS (DJIA), DIA
0.47% Emerging VIPERs, VWO
0.46% Dividend DJ Select, DVY
0.41% Dividend Appreciation Vipers, VIG
0.40% Value LargeCap Dynamic PS, PWV
0.37% Bond, High-Yield Corporate, HYG
0.37% Bond, High-Yield Junk, JNK
0.36% Sweden Index, EWD
0.36% Consumer Staples SPDR, XLP
0.35% Homebuilders SPDR, XHB
0.33% Global 100, IOO
0.28% Value EAFE MSCI, EFV
0.25% Malaysia Index, EWM
0.24% Bond, 10 Year Treasury, IEF
0.22% Dividend High Yield Equity PS, PEY
0.21% Turkey MSCI iS, TUR
0.21% Bond, Corp, LQD
0.20% Small Cap EAFE MSCI iS, SCZ
0.20% Energy Global, IXC
0.19% Italy Index, EWI
0.18% Europe 350 S&P Index, IEV
0.18% Switzerland Index, EWL
0.18% Materials SPDR, XLB
0.17% Growth EAFE MSCI, EFG
0.17% European VIPERs, VGK
0.16% Bond EmrgMkt JPM iS, EMB
0.15% Bond, Aggregate, AGG
0.15% Bond, 20+ Years Treasury, TLT
0.15% Dividend SPDR, SDY
0.14% EAFE Index, EFA
0.13% Energy DJ, IYE
0.13% Value VIPERs, VTV
0.13% S&P 500 iS LargeCap Blend, IVV
0.13% Energy VIPERs, VDE
0.10% LargeCap Blend S&P 100, OEF
0.07% Value S&P 500 B, IVE
0.06% Basic Materials DJ US, IYM
0.06% Energy SPDR, XLE
0.06% S&P 500 SPDRs LargeCap Blend, SPY
0.06% Growth S&P 500/BARRA, IVW
0.06% Health Care SPDR, XLV
0.05% Pacific ex-Japan, EPP
0.05% Australia Index, EWA
0.00% Taiwan Index, EWT
0.00% Consumer Discretionary SPDR, XLY
-0.01% Bond, 1-3 Year Treasury, SHY
-0.02% Bond, TIPS, TIP
-0.02% Bond Treasury Short-Term iS, SHV
-0.02% Bond Muni ATM-Free S&P iS, MUB
-0.03% Bear, Short S&P 500, SH
-0.03% Value 1000 Russell, IWD
-0.03% Financials VIPERs, VFH
-0.04% Financial SPDR, XLF
-0.04% Financial Services DJ, IYG
-0.04% LargeCap 1000 R, IWB
-0.05% LargeCap VIPERs, VV
-0.05% Frontier Markets Guggenheim , FRN
-0.05% Preferred Stock iS, PFF
-0.06% Global ex US ACWI iS, ACWX
-0.06% India PS, PIN
-0.06% Netherlands Index, EWN
-0.07% Dividend International, PID
-0.07% Mexico Index, EWW
-0.09% Telecom DJ US, IYZ
-0.10% LargeCap Blend Russell 3000, IWV
-0.10% LargeCap Blend S&P=Weight R, RSP
-0.11% Financial Preferred, PGF
-0.12% Blend Total Market VIPERs, VTI
-0.13% Growth 1000 Russell, IWF
-0.16% Value MidCap Russell, IWS
-0.19% Transportation Av DJ, IYT
-0.20% Growth VIPERs, VUG
-0.21% Germany Index, EWG
-0.21% Financial DJ US, IYF
-0.23% EMU Europe Index, EZU
-0.23% Canada Index, EWC
-0.27% Pacific VIPERs, VPL
-0.30% South Africa Index, EZA
-0.30% MidCap Russell, IWR
-0.34% Value MidCap S&P 400 B, IJJ
-0.38% Value SmallCap VIPERS, VBR
-0.40% Energy & Nat Res iS GS, IGE
-0.40% QQQ Nasdaq 100 Trust, QQQ
-0.42% Info Tech VIPERs, VGT
-0.42% Singapore Index, EWS
-0.42% Thailand MSCI iS, THD
-0.44% Bond Ex-US Treas, BWX
-0.44% MidCap S&P 400 iS, IJH
-0.45% Growth MidCap Russell, IWP
-0.46% MidCap S&P 400 SPDRs, MDY
-0.47% WilderHill Clean Energy PS, PBW
-0.48% Technology SPDR, XLK
-0.48% Microcap Russell, IWC
-0.49% Real Estate US DJ, IYR
-0.49% SmallCap S&P 600, IJR
-0.50% Indonesia MV, IDX
-0.50% Technology DJ US, IYW
-0.50% Value SmallCap Russell 2000, IWN
-0.54% Belgium Index, EWK
-0.54% Growth BARRA Small Cap 600, IJT
-0.57% REIT Wilshire, RWR
-0.57% Realty Cohen & Steers, ICF
-0.59% Small Cap VIPERs, VB
-0.59% Growth MidCap 400 B, IJK
-0.61% Japan Index, EWJ
-0.64% Austria Index, EWO
-0.64% Metals & Mining SPDR, XME
-0.64% Growth SmallCap R 2000, IWO
-0.65% Growth SmallCap VIPERs, VBK
-0.65% SmallCap Russell 2000, IWM
-0.67% Commodity Tracking, DBC
-0.68% France Index, EWQ
-0.68% Water Resources, PHO
-0.69% Value SmallCap S&P 600 B, IJS
-0.71% REIT VIPERs, VNQ
-0.89% Semiconductor iS IGW, SOXX
-0.91% Spain Index, EWP
-1.03% Oil Fund PowerShares, DBO
-1.11% Biotech SPDR, XBI
-1.34% Oil, Crude, U.S. Oil Fund, USO
-1.57% Networking, IGN
-1.72% Gold Shares S.T., GLD
-1.74% Semiconductor SPDR, XSD
-2.53% Silver Trust iS, SLV
