The following sector ETFs absolute prices broke below 4-week lows on Thursday:
Utilities sector ETF (XLU)
Energy sector ETF (XLE)
Industrial sector ETF (XLI)
Materials sector ETF (XLB)
Dow-Jones Industrial, Transportation, Utility, and Composite Averages all broke below 4-week lows on Thursday.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) turned systematically bearish again when it fell below its 50-day SMA.
The technical condition of the stock market does not support the optimism of the bullish majority of stock investors and traders.
The S&P 500 (SPX: 1,399.48) fell 11.01 points or 0.78% on Thursday. SPX broke below 3-week lows.
NYSE volume rose slightly on Thursday but still was 34% below its 200-day SMA. Volume has been running near the lowest levels of the year since 8/8/12, possibly reflecting diminishing enthusiasm for stocks, as well as summer vacations.
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 turned down last week after failing 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.
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 —
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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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Stock Market Indicators
The Dow Theory 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. Last week, the Industrials closely approached their highs of the year, but the Transports continued to lag well below their highs, thereby demonstrating a bearish divergence. The Transports fell below 50- and 200-day SMAs on 8/27/12, thereby turning systematically bearish again.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) rose above its 50-day SMA on 8/6/12, thereby turning systematically bullish again. QQQ/SPY remains above its 200-day SMA, and its 50-day SMA has been above its 200-day SMA since 8/5/11.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 3 years on 7/23/12, reconfirming its bearish trend. Short term, BKF/SPY turned systematically bearish again on 8/14/12, when it fell below its 50-day SMA. BKF/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/13/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below its lows of the previous 3 years on 7/23/12, reconfirming its bearish trend. EEM/SPY turned systematically bearish again on 8/17/12, when it fell below its 50-day SMA. EEM/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 2/3/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) reconfirmed a bearish major trend when it fell below its lows of the previous 9 years on 7/24/12. EFA/SPY turned systematically bearish again on 8/30/12 when it fell below its 50-day SMA. 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) rose above its highs of the previous 2 years on 7/31/12, thereby reconfirming its preexisting major bullish trend. OEF/SPY remains systematically bullish above its 50-day SMA, 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) fell below its lows of the previous 10 months on 8/1/12, thereby confirming its major downtrend. Systematically, the IWM/SPY ratio remains bearish: below its 50-day SMA, 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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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
1374.91, 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
1337.27, 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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Tangible Assets, Commodities
U.S. dollar ETF (UUP) appears to be “hammering out a bottom”. UUP remains systematically neutral: below its 50-day SMA, above its 200-day SMA, and its 50-day SMA has stayed above its 200-day SMA every day since 10/26/11. Support 22.30, 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: 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 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 fell below its 200-day SMA on 8/30/12. The price 50-day SMA has remained below its 200-day SMA every day since 10/27/11. Support 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 30.24, 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 200-day SMA on 8/30/12 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
2.67% , GPS , GAP
1.43% , MZZ , Short 200% MidCap 400 PS, MZZ
0.74% , DOG , Short 100% Dow 30, DOG
1.10% , FRX , FOREST LABS STK A
1.29% , HRB , H&R BLOCK
0.47% , PIN , India PS, PIN
1.54% , DXD , Short 200% Dow 30 PS, DXD
1.96% , COH , COACH
1.52% , COST , COSTCO WHOLESAL
0.58% , RYAAY , Ryanair Holdings plc
1.43% , WPO , Washington Post
1.81% , CI , CIGNA
0.59% , DISCA , Discovery Communications
1.94% , OMX , OFFICEMAX INC., OMX
1.05% , PSQ , Short 100% QQQ, PSQ
1.61% , SDS , Short 200% S&P 500 PS, SDS
2.10% , QID , Short 200% QQQ PS, QID
0.74% , SH , Short 100% S&P 500, SH
0.90% , KSS , KOHLS
0.92% , HMA , HEALTH MGMT STK A
1.10% , SBUX , STARBUCKS
1.14% , NWL , NEWELL RUBBER
0.48% , KEY , KEYCORP
0.22% , SCHW.K , CHARLES SCHWAB, SCHW.O
0.28% , MCO , MOODYS CORP
0.11% , DBC , Commodity Tracking, DBC
0.17% , DOW , DOW CHEMICAL
0.28% , KBH , KB HOME
0.18% , AMP , Ameriprise Financial Inc.
0.21% , SUN , SUNOCO
0.27% , LTD , LIMITED BRANDS
0.11% , DHI , D.R. HORTON, DHI
1.20% , ABC , AMERISOURCEBERGN
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.74% , IGN , Networking, IGN
-19.50% , CIEN.O , CIENA
-2.35% , XSD , Semiconductor SPDR, XSD
-7.92% , SHLD , SEARS HOLDINGS
-1.41% , DGT , Global Titans, DGT
-1.57% , FEZ , Euro STOXX 50, FEZ
-1.28% , IGM , Technology GS, IGM
-1.46% , ITF , Japan LargeCap Blend TOPIX 150, ITF
-0.66% , PPA , Aerospace & Defense, PPA
-1.38% , PZI , Micro Cap Zachs, PZI
-3.75% , CHKP , Check Point Software Technologies Ltd
-1.29% , IXN , Technology Global, IXN
-3.73% , VMC , VULCAN MATERIALS
-1.84% , EPP , Pacific ex-Japan, EPP
-0.53% , IWW , Value LargeCap Russell 3000, IWW
-1.27% , PSJ , Software, PSJ
-1.75% , VPL , Pacific VIPERs, VPL
-0.87% , JKJ , SmallCap Core iS M, JKJ
-1.84% , EWJ , Japan Index, EWJ
-3.60% , RSH , RADIOSHACK
-1.22% , PGJ , China LargeCap Growth G D H USX PS, PGJ
-1.39% , ACWX , Global ex US ACWI iS, ACWX
-0.89% , RPG , Growth S&P 500, RPG
-1.86% , EWA , Australia Index, EWA
-2.47% , IDX , Indonesia MV, IDX
-0.52% , ECH , Chile MSCI iS, ECH
-1.34% , SCZ , Small Cap EAFE MSCI iS, SCZ
-1.48% , EFA , EAFE Index, EFA
-1.02% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
-1.68% , SVU , SUPERVALU
-0.62% , EWM , Malaysia Index, EWM
-0.83% , PKB , Building & Construction, PKB
-2.04% , MOLX , MOLEX
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
0.74% Bear, Short S&P 500, SH
0.52% Bond, 20+ Years Treasury, TLT
0.47% India PS, PIN
0.19% Bond, 10 Year Treasury, IEF
0.16% Agriculture DB PS, DBA
0.11% Commodity Tracking, DBC
0.06% Bond, Intermediate US Aggregate iS, AGG
0.05% Financial Preferred, PGF
0.03% Bond, Emerg Mkt JPM iS, EMB
0.03% Bond, Long-Term Corp iBoxx iS, LQD
0.03% Bond, Muni S&P ATM-Free iS, MUB
0.03% Bond, High-Yield Junk, JNK
0.01% Bond, 1-3 Year Treasury, SHY
0.01% Bond Treasury Short-Term iS, SHV
0.00% Preferred Stock iS, PFF
0.00% India Earnings WTree, EPI
-0.02% Bond Ex-US Treas, BWX
-0.04% Bond, High Yield Corp iBoxx iS, HYG
-0.04% Gold Shares S.T., GLD
-0.07% Bond, TIPS U.S. Treasury iS, TIP
-0.11% Real Estate US DJ iS, IYR
-0.11% Oil Fund PowerShares, DBO
-0.15% Realty Cohen & Steers, ICF
-0.16% REIT Wilshire, RWR
-0.23% REIT VIPERs, VNQ
-0.26% Frontier Markets Guggenheim , FRN
-0.28% Mexico Index, EWW
-0.33% Health Care SPDR, XLV
-0.34% Oil, Crude, U.S. Oil Fund, USO
-0.38% Dividend SPDR, SDY
-0.39% Consumer Staples SPDR, XLP
-0.40% Taiwan Index, EWT
-0.42% Utilities VIPERs, VPU
-0.47% Financials VIPERs, VFH
-0.47% Dividend U.S. DJ iS, DVY
-0.47% Financial DJ US, IYF
-0.49% Utilities SPDR, XLU
-0.52% Chile MSCI iS, ECH
-0.53% Financial SPDR, XLF
-0.55% Consumer Discretionary SPDR, XLY
-0.56% Value LargeCap Dynamic PS, PWV
-0.59% Value VIPERs, VTV
-0.60% Capital Markets KWB ST, KCE
-0.62% Malaysia Index, EWM
-0.63% Dividend High Yield Equity PS, PEY
-0.65% LargeCap Value Russell 1000 iS, IWD
-0.66% MidCap Value S&P 400 iS, IJJ
-0.66% Telecom DJ US, IYZ
-0.68% MidCap Russell, IWR
-0.69% Financial Services DJ, IYG
-0.70% Dividend Appreciation Vipers, VIG
-0.70% Latin Am 40, ILF
-0.71% Value MidCap Russell, IWS
-0.71% LargeCap Value S&P 500 iS, IVE
-0.72% LargeCap Blend S&P 500 iS, IVV
-0.72% S&P 500 SPDRs LargeCap Blend, SPY
-0.72% Brazil Index, EWZ
-0.73% MidCap S&P 400 SPDRs, MDY
-0.74% LargeCap Blend Russell 1000 iS, IWB
-0.74% LargeCap Blend Russell 3000 iS, IWV
-0.75% Blend Total Market VIPERs, VTI
-0.76% DIAMONDS (DJIA), DIA
-0.77% Homebuilders SPDR, XHB
-0.77% Value SmallCap VIPERS, VBR
-0.77% LargeCap VIPERs, VV
-0.78% MidCap Blend S&P 400 iS, IJH
-0.78% LargeCap Blend S&P=Weight R, RSP
-0.78% LargeCap Blend S&P 100, OEF
-0.78% SmallCap Growth S&P 600 iS, IJT
-0.78% Growth MidCap Russell, IWP
-0.79% LargeCap Growth Russell 1000 iS, IWF
-0.80% Growth VIPERs, VUG
-0.81% LargeCap Growth S&P 500 iS, IVW
-0.82% Emerging 50 BLDRS, ADRE
-0.82% Basic Materials DJ US, IYM
-0.83% Biotech SPDR, XBI
-0.85% Industrial SPDR, XLI
-0.86% Small Cap VIPERs, VB
-0.88% United Kingdom Index, EWU
-0.88% SmallCap Blend S&P 600 iS, IJR
-0.90% Materials SPDR, XLB
-0.92% MidCap Growth S&P 400 iS, IJK
-0.93% SmallCap Value S&P 600 iS, IJS
-0.94% Dividend International, PID
-0.94% Growth SmallCap VIPERs, VBK
-0.95% Water Resources, PHO
-0.95% Dividend ex-U.S. DJ iS, IDV
-0.96% SmallCap Growth Russell 2000 iS, IWO
-0.99% Energy Global, IXC
-0.99% SmallCap Blend Russell 2000 iS, IWM
-1.00% SmallCap Value Russell 2000 iS, IWN
-1.01% QQQ Nasdaq 100 Trust, QQQ
-1.04% Silver Trust iS, SLV
-1.04% Microcap Russell, IWC
-1.05% Energy DJ, IYE
-1.05% Netherlands Index, EWN
-1.05% Switzerland Index, EWL
-1.05% Global 100, IOO
-1.06% Turkey MSCI iS, TUR
-1.06% Energy SPDR, XLE
-1.07% Global LargeCap Blend MSCI iS, ACWI
-1.08% Transportation Av DJ, IYT
-1.09% Canada Index, EWC
-1.11% Technology SPDR, XLK
-1.11% European VIPERs, VGK
-1.16% Energy & Nat Res iS GS, IGE
-1.17% Emerging Markets MSCI iS, EEM
-1.19% Energy VIPERs, VDE
-1.21% Growth EAFE MSCI, EFG
-1.21% Europe 350 S&P Index, IEV
-1.21% France Index, EWQ
-1.22% Emerging VIPERs, VWO
-1.22% China LargeCap Growth G D H USX PS, PGJ
-1.26% Info Tech VIPERs, VGT
-1.27% Technology DJ US, IYW
-1.32% Thailand MSCI iS, THD
-1.34% Belgium Index, EWK
-1.34% SmallCap Blend EAFE MSCI iS, SCZ
-1.39% Global ex U.S. LargeCap Blend, ACWX
-1.45% Singapore Index, EWS
-1.48% Foreign LargeCap EAFE MSCI iS, EFA
-1.49% Value EAFE MSCI, EFV
-1.53% Semiconductor iS IGW, SOXX
-1.61% Sweden Index, EWD
-1.62% EMU Europe Index, EZU
-1.64% China 25 iS, FXI
-1.67% South Korea Index, EWY
-1.70% Hong Kong Index, EWH
-1.75% Pacific VIPERs, VPL
-1.82% Russia MV, RSX
-1.83% Germany Index, EWG
-1.84% Pacific ex-Japan, EPP
-1.84% Japan Index, EWJ
-1.86% Australia Index, EWA
-1.89% Italy Index, EWI
-1.93% South Africa Index, EZA
-1.95% Metals & Mining SPDR, XME
-2.00% Austria Index, EWO
-2.14% Spain Index, EWP
-2.35% Semiconductor SPDR, XSD
-2.47% Indonesia MV, IDX
