Net Selling Pressure Evident During New York Trading Session

The S&P 500 Composite (SPX, 1,285.09) rose 0.50 points or 0.04% on Friday, October 28, 2011. SPX rose 3.78% for the week.

The robot, trading algorithms that trade 24 hours around the clock had quite a week. All of the U.S. stock market gain last week occurred on overnight gaps in reaction to the news out of Europe and, to a lesser extent, China.

I have noticed for some years now that front-running the U.S. open increasingly is a winning way to game the market. That and high-frequency trading algorithms that can read, interpret, and react to momentum, price anomalies, and news in a millisecond or two–well before humans can perceive that something just happened. Now if we only had a multimillion dollar trading infrastructure to take advantage of this insight…

A graph of cumulative close minus open prices for the SPDR S&P 500 ETF (SPY: 128.60) is actually lower now than it was a week ago. That implies net selling pressure during the regular New York trading session from 9:30 a.m. to 4:00 p.m. (The SPX cash index does not offer a true open price, so we cannot use it for any indicators that depend on an accurate open price.) If a day trader bought on the open and sold on the close each day, he would have lost money.

Some say that the 19-trading day bounce has left the stock market at its most extreme overbought level of the past year. CNBC reports that a Birinyi Associates model has reached an “absolute sell price”.

In my experience, technical indicators probing into overbought territory do not necessarily imply an immediate price decline. It does suggest a vulnerability, however, once the upside momentum has dissipated.

Secondary Reactions are significant counter-trend corrections against the Primary Tide that can last several weeks to several months and recover a substantial proportion of the previous losses.

Longer-term indicators still are far from confirming any change in the major Primary Tide trend. For example, 50-day SMAs are well below 200-day SMAs for most stocks and indexes.

The Dow Theory signaled a Primary Tide Bear Market on 8/2/11, when both Averages closed below their closing price lows of the previous 11 months. This Bear Market was confirmed on 10/3/11 by lower closing price lows for both Averages. Both Averages would have to close above their closing price highs for the year to indicate a “Turn in the Tide”.
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) price fell below the lows of the previous 8 weeks on 10/27/11, reconfirming its preexisting downside correction. Support 21.07, 20.84. Resistance 21.91 and 22.63.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below the lows of the previous 10 months on 10/3/11, which reconfirmed a major long-term downtrend.

Crude Oil, United States Oil ETF (USO) price rose above the highs of the previous 11 weeks on 10/25/11, extending a minor 3-weeks bounce. Longer term, USO broke down below 2-year lows on 10/4/11 to confirm a major bear market. Support 32.52, 29.10, 26.28, and 22.74. Resistance 36.49, 39.25, 40.74, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) price rose above the highs of the previous 5 weeks on 10/27/11, confirming an end of a downside short-term correction. Longer term, new highs on 9/6/11 confirmed a major bull market. Support: 154.19, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: 170.32, 172.20, 177.40, and 185.85.

Gold Mining Stocks ETF/ Gold Shares ETF Relative Strength Ratio (GDX/GLD) rose above 4-week highs and its 50-day SMA on 10/28/11. The 50-day SMA remains below the 200-day SMA, indicating a neutral trend. GDX/GLD fell below 29-month lows on 8/8/11, reconfirming a bearish major trend for the long term. Investors still prefer Gold bullion over Gold Miners.

Silver, iShares Silver Trust ETF (SLV) price rose above the highs of the previous 5 weeks on 10/27/11, possibly confirming an end of a downside short-term correction. Longer term, SLV price broke down below the lows of the previous 7 months on 9/26/11, which confirmed a bearish major trend for the long term. SLV fell below its 50-day SMA on 9/19/11, fell below its 200-day SMA on 9/22/11, and remains bearishly below both SMAs. Support 27.41, 26.03, and 24.44. Resistance: 34.51, 40.23, 41.49, 42.30, 42.78, 44.71 and 48.35.

Silver/Gold ETFs Ratio (SLV/GLD) rose above 5-weeek highs on 10/28/11, confirming a short-term bounce. Longer term, the SLV/GLD Ratio broke down below the lows of the previous 11 months on 9/30/11, reconfirming a bearish major trend. SLV/GLD has been mostly weak since peaking on 4/28/11. This means investors prefer Gold over Silver.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price rose above the highs of the previous 5 weeks on 10/27/11, confirming a short-term upside correction. Longer term, JJC broke down below the lows of the previous 14 months on 10/5/11, confirming a bearish major trend. Major trend weakness in Copper suggests serious concerns about the economic outlook.
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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% , PWO , OTC Dynamic PS, PWO
11.14% , NWL , NEWELL RUBBER
1.15% , PIV , Value Line Timeliness MidCap Gr, PIV
11.34% , IPG , INTERPUBLIC GRP
1.69% , SWH , Software H, SWH
1.45% , VRSN , VeriSign Inc
11.57% , X , US STEEL CORP
11.44% , AMD , ADV MICRO DEV
0.40% , JKG , MidCap Blend Core iS M, JKG
2.30% , ASH , ASHLAND
4.38% , EMN , EASTMAN CHEM
1.43% , CEG , CONSTELL ENERGY
3.92% , GT , GOODYEAR TIRE
0.78% , JKK , Growth SmallCap iS M, JKK
0.27% , IWZ , Growth LargeCap Russell 3000, IWZ
4.41% , S , SPRINT NEXTEL
2.33% , MRK , MERCK & CO
1.59% , ADI , ANALOG DEVICES
1.51% , IYH , Healthcare DJ, IYH
4.01% , LXK , LEXMARK INTL STK A
0.26% , IWD , Value 1000 Russell, IWD
0.30% , JKE , Growth LargeCap iS M, JKE
0.34% , DBO , Oil Fund PowerShares, DBO
2.40% , DHR , DANAHER
0.19% , VPL , Pacific VIPERs, VPL
1.09% , PPA , Aerospace & Defense, PPA
3.68% , NEM , NEWMONT MINING
2.37% , IGN , Networking, IGN
1.55% , LH , LAB CRP OF AMER
0.29% , IGM , Technology GS, IGM
1.30% , IGE , Energy & Nat Res iS GS, IGE
1.54% , ECH , Chile MSCI iS, ECH
0.86% , VFC , VF

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-14.34% , WHR , WHIRLPOOL
-0.74% , JKI , Value MidCap iS M, JKI
-4.54% , AON , AON
-6.81% , AIV , APT INV MNGMT
-7.47% , PMCS , PMC SIERRA
-2.68% , ED , CON ED
-1.16% , PKB , Building & Construction, PKB
-0.86% , PMR , Retail, PMR
-1.78% , EWN , Netherlands Index, EWN
-3.93% , DISH , EchoStar Communications
-0.69% , PEJ , Leisure & Entertainment, PEJ
-1.04% , PLL , PALL
-2.58% , BBBY , BED BATH BEYOND
-2.64% , MMC , MARSH & MCLENNAN
-3.34% , HD , HOME DEPOT
-4.38% , SVU , SUPERVALU
-1.70% , DLX , DELUXE
-2.59% , COP , CONOCOPHILLIPS
-4.96% , LEG , LEGGETT & PLATT
-3.47% , PFG , PRINCIPAL FINL
-2.69% , WLP , WELLPOINT HEALTH
-3.41% , CLX , CLOROX
-3.07% , CINF , CINCINNATI FIN
-1.03% , CMS , CMS ENERGY
-0.63% , BDH , Broadband H, BDH
-1.29% , D , DOMINION RSCS
-0.32% , EFA , EAFE Index, EFA
-1.62% , BMY , BRISTOL MYERS
-0.27% , COL , ROCKWELL COLLINS
-0.93% , FII , FED INVESTORS STK B
-1.20% , TUP , TUPPERWARE
-0.14% , IYZ , Telecom DJ US, IYZ
-0.04% , VTV , Value VIPERs, VTV
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
4.10% Silver Trust iS, SLV
2.90% Metals & Mining SPDR, XME
2.72% Financial Services DJ, IYG
2.37% Networking, IGN
2.09% WilderHill Clean Energy PS, PBW
1.63% REIT Wilshire, RWR
1.58% Silver Miners Global X, SIL
1.58% Basic Materials DJ US, IYM
1.54% Chile MSCI iS, ECH
1.53% Growth BARRA Small Cap 600, IJT
1.49% Brazil Index, EWZ
1.30% Energy & Nat Res iS GS, IGE
1.09% Mexico Index, EWW
0.97% Latin Am 40, ILF
0.92% Energy DJ, IYE
0.92% Real Estate US DJ, IYR
0.92% S&P 500 SPDRs LargeCap Blend, SPY
0.90% LargeCap Blend S&P=Weight R, RSP
0.81% Realty Cohen & Steers, ICF
0.70% Materials SPDR, XLB
0.68% Energy SPDR, XLE
0.62% Switzerland Index, EWL
0.60% Energy Global, IXC
0.57% Technology DJ US, IYW
0.54% Hong Kong Index, EWH
0.50% Russia MV, RSX
0.50% Energy VIPERs, VDE
0.49% Growth S&P 500/BARRA, IVW
0.49% Global 100, IOO
0.47% Biotech SPDR, XBI
0.47% Singapore Index, EWS
0.47% Bond, TIPS, TIP
0.47% Value MidCap S&P 400 B, IJJ
0.45% Growth MidCap Russell, IWP
0.44% South Africa Index, EZA
0.43% Bond, 10 Year Treasury, IEF
0.41% DIAMONDS (DJIA), DIA
0.40% MidCap Russell, IWR
0.40% Japan Index, EWJ
0.39% Semiconductor iS IGW, SOXX
0.39% Agriculture DB PS, DBA
0.39% Growth 1000 Russell, IWF
0.39% Bond, Corp, LQD
0.37% LargeCap Blend Russell 3000, IWV
0.35% Canada Index, EWC
0.34% India Earnings WTree, EPI
0.34% Technology SPDR, XLK
0.34% Oil Fund PowerShares, DBO
0.34% Info Tech VIPERs, VGT
0.33% Dividend SPDR, SDY
0.33% Growth VIPERs, VUG
0.31% S&P 500 iS LargeCap Blend, IVV
0.27% Financial DJ US, IYF
0.26% Value 1000 Russell, IWD
0.25% LargeCap 1000 R, IWB
0.24% Emerging 50 BLDRS, ADRE
0.23% Bond Ex-US Treas, BWX
0.22% Value S&P 500 B, IVE
0.20% REIT VIPERs, VNQ
0.19% Pacific VIPERs, VPL
0.17% Financial Preferred, PGF
0.15% QQQ Nasdaq 100 Trust, QQQ
0.15% Growth SmallCap VIPERs, VBK
0.15% Bond, Aggregate, AGG
0.14% Value MidCap Russell, IWS
0.11% Microcap Russell, IWC
0.09% Blend Total Market VIPERs, VTI
0.09% Health Care SPDR, XLV
0.07% Financial SPDR, XLF
0.05% Bond, 1-3 Year Treasury, SHY
0.04% Bond EmrgMkt JPM iS, EMB
0.02% Growth MidCap 400 B, IJK
0.01% LargeCap VIPERs, VV
0.00% Malaysia Index, EWM
0.00% LargeCap Blend S&P 100, OEF
0.00% Industrial SPDR, XLI
-0.01% Bond Treasury Short-Term iS, SHV
-0.01% Bond Muni ATM-Free S&P iS, MUB
-0.04% Value VIPERs, VTV
-0.05% Preferred Stock iS, PFF
-0.05% Dividend Appreciation Vipers, VIG
-0.07% Growth EAFE MSCI, EFG
-0.08% Dividend DJ Select, DVY
-0.11% Commodity Tracking, DBC
-0.14% Telecom DJ US, IYZ
-0.17% Growth SmallCap R 2000, IWO
-0.19% Gold Shares S.T., GLD
-0.21% Value LargeCap Dynamic PS, PWV
-0.21% MidCap S&P 400 iS, IJH
-0.22% Semiconductor SPDR, XSD
-0.25% Consumer Staples SPDR, XLP
-0.25% Bond, High-Yield Junk, JNK
-0.28% Small Cap EAFE MSCI iS, SCZ
-0.28% Water Resources, PHO
-0.29% Frontier Markets Guggenheim , FRN
-0.31% Financials VIPERs, VFH
-0.31% Small Cap VIPERs, VB
-0.32% EAFE Index, EFA
-0.34% Value SmallCap S&P 600 B, IJS
-0.34% United Kingdom Index, EWU
-0.39% SmallCap S&P 600, IJR
-0.39% MidCap S&P 400 SPDRs, MDY
-0.41% Bond, High-Yield Corporate, HYG
-0.42% Capital Markets KWB ST, KCE
-0.45% Dividend International, PID
-0.46% SmallCap Russell 2000, IWM
-0.47% Utilities VIPERs, VPU
-0.49% Pacific ex-Japan, EPP
-0.50% Oil, Crude, U.S. Oil Fund, USO
-0.55% Value SmallCap Russell 2000, IWN
-0.55% Emerging VIPERs, VWO
-0.56% Global ex US ACWI iS, ACWX
-0.59% Value SmallCap VIPERS, VBR
-0.68% Transportation Av DJ, IYT
-0.70% China LargeCap Growth G D H USX PS, PGJ
-0.70% Germany Index, EWG
-0.71% Europe 350 S&P Index, IEV
-0.78% Consumer Discretionary SPDR, XLY
-0.78% India PS, PIN
-0.82% Utilities SPDR, XLU
-0.93% Bond, 20+ Years Treasury, TLT
-0.93% Value EAFE MSCI, EFV
-0.98% Emerging Markets, EEM
-1.00% Australia Index, EWA
-1.14% South Korea Index, EWY
-1.15% EMU Europe Index, EZU
-1.17% France Index, EWQ
-1.20% Dividend High Yield Equity PS, PEY
-1.29% European VIPERs, VGK
-1.32% Spain Index, EWP
-1.36% Sweden Index, EWD
-1.43% China 25 iS, FXI
-1.59% Taiwan Index, EWT
-1.62% Belgium Index, EWK
-1.76% Turkey MSCI iS, TUR
-1.78% Netherlands Index, EWN
-1.97% Italy Index, EWI
-2.03% Thailand MSCI iS, THD
-2.07% Indonesia MV, IDX
-2.36% Homebuilders SPDR, XHB
-2.58% Austria Index, EWO