The S&P 500 Composite (SPX: 1,387.57) recovered nearly half of its recent loss, which is typical of a counter-trend bounce.
NYSE volume fell 5%, thereby failing to confirm the 2-day recovery attempt on Wednesday and Thursday.
A variety of technical indicators have been demonstrating waning bullish momentum for stocks. A downside correction or shakeout has seemed overdue, according to past norms.
Following unusually large price run ups, such as Q1 2012, stocks become more vulnerable to sudden reversals. Potential Reward relative to potential Risk remains unattractive for stocks at this time.
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) whipsawed back below its 50-day SMA, turning neutral.
U.S. dollar ETF (UUP) whipsawed back below its 50-day SMA, turning neutral.
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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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9 major U.S. stock sectors ranked in order of long-term relative strength:
Available by subscription only (click here).
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Stock Market Indicators
The Dow Theory signaled a downside Secondary Reaction on 4/9/12, as both Industrials and Transports fell below their lows of the previous 3 weeks, and both fell below their 50-day SMAs. 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.
NASDAQ Composite/S&P 500 Relative Strength Ratio has been consolidating gains since peaking on 3/28/12. Longer term, this RS Ratio remains above its 50-day and 200-day SMAs, and the 50-day SMA has remained bullishly above the 200-day SMA every day since 2/24/12. Absolute price fell below the lows of the previous 4 weeks on 4/10/12.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 2 months on 3/29/12, reconfirming its bearish trend. Systematically, BKF/SPY 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 1/13/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below its lows of the previous 2 months on 3/28/12, reconfirming its bearish trend. EEM/SPY remains below its 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained below the 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 8 years on 4/5/12. Systematically, EFA/SPY remains bearish below its 50-day and 200-day SMAs, and the 50-day SMA has remained below the 200-day SMA consistently every day since 1/14/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) rose above its highs of the previous 22 months on 4/10/12, reconfirming its preexisting bullish trend. OEX/SPX remains above its 50-day and 200-day SMAs, and the 50-day SMA has remained bullishly above the 200-day SMA every day since 8/25/11. 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) has been relatively weak for a year, since 4/5/11. IWM/SPY fell further below its lows of the previous 4 months on 4/10/12, reconfirming renewed downside momentum for the medium term. Systematically, IWM/SPY remains technically neutral, below both its 50-day and 200-day SMAs, but with the 50-day SMA still slightly above the 200-day SMA.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) has been relatively weak since 4/5/11. MDY/SPY fell below its lows of the previous 3 months on 4/10/12, reconfirming downside momentum for the medium term. Systematically, MDY/SPY remains technically neutral, below both its 50-day and 200-day SMAs, but with the 50-day SMA slightly above the 200-day SMA.
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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
1422.38, high of 4/2/2012
1391.56, low of 3/29/2012
The S&P 500 Composite Potential Support
1386.87, low of 3/23/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1378.04, high of 2/29/2012
1376.55, Fibonacci 100.0% projection 10/11 range
1374.79, 50-day SMA
1370.58, high of 5/2/11
1357.38, low of 4/11/2012
1340.03, low of 3/6/2012
1337.35, low of 2/10/2012
1300.49, low of 1/30/2012
1277.58, low of 1/13/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1271.55, 200-day SMA
1257.46, low of 12/30/11
1257.58, Fibonacci 61.8% of 2011 range
1255.22, high of 12/22/2011
1248.64, low of 12/29/2011
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 11/3/11
1231.04, high of 12/16/11
1226.64, low of 11/9/2011
1222.68, Fibonacci 50% of 2011 range
1224.57, high of 12/19/11
1215.20, low of 12/16/11
1209.47, low of 12/14/2011
1209.43, low of 11/17/2011
1204.49, Fibonacci 23.6% of 2009-11 range
1202.37, low of 12/19/11
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
1039.70, low of 8/27/10
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) whipsawed back below its 50-day SMA on 4/12/12. Systematically, TLT is now neutral: below 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 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 117.29, 119.14, 120.91, 121.64, 121.76, 124.02 and 125.03.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) rose above its 50-day SMA on 4/9/12. IEF 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 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance 105.20, 105.80, 106.49 and 106.66.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below its lows of the previous 4 months on 4/10/12, reconfirming a bearish trend. JNK/LQD remains systematically 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 6/20/11.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) appears to have turned corrective after peaking on 3/19/12. Systematically, TIP/IEF is bullish again: above its 50-day SMA (although just slightly above now), above its 200-day SMA, and with the 50-day SMA above the 200-day SMA every day since 6/21/11.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) whipsawed back below its 50-day SMA, turning neutral. UUP remains above its 200-day SMA, and the 50-day SMA has stayed above the 200-day SMA every day since 6/21/11. Support 21.85, 21.74, 21.58, 21.07, and 20.84. Resistance 22.23, 22.47, 22.85, 23.52, 25.84, 27.19, 28.97.
CRB Commodity Price Index fell further below its lows of the previous 3 months on 4/10/12. 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 17 months on 4/10/12, for another a bearish trend confirmation. 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 weeks on 4/10/12. USO whipsawed back below its 50-day SMA on 4/3/12, turning systematically neutral. USO remains above its 200-day SMA, and the 50-day SMA has remained above the 200-day SMA consistently every day since 1/3/12. Support 38.31, 36.67, 35.73, 34.54, 32.52, 29.10, 26.28, and 22.74. Resistance 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) broke down below its lows of the previous 12 weeks on 4/4/12. Systematically, GLD remains neutral: below its 50-day and 200-day SMAs, but with the 50-day SMA above the 200-day SMA every day since 2/11/09. Support: 156.58, 156.19, 154.55, 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) fell below the lows of the previous 3 years on 4/11/12, thereby reconfirming a bearish major trend for the long term. Systematically, GDX/GLD remains bearish: below its 50-day and 200-day SMAs, and the 50-day SMA has remained bearishly below the 200-day SMA every day since 2/22/11.
Silver, iShares Silver Trust ETF (SLV) broke down below its lows of the previous 11 weeks on 4/4/12, suggesting renewed downside momentum for the medium term. 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 30.11, 28.63, 27.83, 25.65, and 24.44. Resistance: 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) broke down below its lows of the previous 12 weeks on 4/11/12, confirming renewed downside momentum for the medium term. SLV/GLD remains 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 past 3 months on 4/11/12, confirming renewed downside momentum for the medium term. Systematically, however, JJC remains neutral: below its 50-day and 200-day SMAs, but with the 50-day SMA above the 200-day SMA every day since 3/21/12. 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
3.37% , PSTL , Steel Global PS ETF, PSTL
1.23% , PWC , LargeCap Blend Dynamic PS, PWC
1.56% , NYC , LargeCap Blend NYSE Composite iS, NYC
13.34% , MBI , MBIA
2.12% , RFV , Value MidCap S&P 400, RFV
2.73% , PIC , Insurance, PIC
1.15% , XLG , LargeCap Rydex Rus Top 50, XLG
7.22% , HPQ , HEWLETT PACKARD
2.97% , PXJ , Oil & Gas, PXJ
3.91% , MCK , MCKESSON CORP
4.57% , SIL , Silver Miners Global X, SIL
9.65% , RDC , ROWAN COMPANIES
2.09% , JKJ , SmallCap Core iS M, JKJ
0.80% , EIS , Israel MSCI iS, EIS
3.55% , FXI , China 25 iS, FXI
1.20% , KLD , LargeCap Blend Socially Responsible iS, KLD
4.27% , AIG , AMER INTL GROUP
7.52% , X , US STEEL CORP
2.16% , IYE , Energy DJ, IYE
2.77% , EPI , India Earnings WTree, EPI
1.21% , CTB , COOPER TIRE
2.40% , EZA , South Africa Index, EZA
2.37% , GOOG , Google
1.49% , JKI , Value MidCap iS M, JKI
3.97% , ROK , ROCKWELL AUTOMAT
2.06% , PIN , India PS, PIN
2.21% , EFG , Growth EAFE MSCI, EFG
1.51% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
4.53% , NOV , NATIONAL OILWELL VARC0
2.27% , PXN , Nanotech Lux, PXN
3.28% , IYM , Basic Materials DJ US, IYM
6.62% , CLF , CLIFFS NATURAL RESOURCES, CLF
0.62% , ITF , Japan LargeCap Blend TOPIX 150, ITF
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.79% , MYY , Short 100% MidCap 400, MYY
-1.24% , DGX , QUEST DIAG
-5.03% , DYN , DYNEGY
-1.85% , HGSI , Human Genome Sciences Inc
-1.98% , OMX , OFFICEMAX INC., OMX
-1.53% , FAST , Fastenal Company
-0.28% , MU.O , MICRON TECH
-2.24% , QID , Short 200% QQQ PS, QID
-0.48% , MUB , Bond Muni ATM-Free S&P iS, MUB
-2.70% , SDS , Short 200% S&P 500 PS, SDS
-0.76% , EXC , EXELON CORP
-0.53% , SJM , J. M. Smucker
-0.30% , TUP , TUPPERWARE
-0.56% , MRK , MERCK & CO
-0.19% , TIP , Bond, TIPS, TIP
-0.84% , DPS , Dr Pepper Snapple Group
-2.87% , DXD , Short 200% Dow 30 PS, DXD
-0.62% , CVS , CVS
-0.16% , COST , COSTCO WHOLESAL
-0.13% , AGN , ALLERGAN
-0.07% , GVI , Bond Interm U.S. Gov, GVI
-0.02% , LH , LAB CRP OF AMER
-0.53% , PG , PROCTER & GAMBLE
-0.42% , TLT , Bond, 20+ Years Treasury, TLT
-0.16% , PFE , PFIZER
-0.20% , IEF , Bond, 10 Year Treasury, IEF
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
4.67% Metals & Mining SPDR, XME
3.55% China 25 iS, FXI
3.28% Basic Materials DJ US, IYM
3.22% Sweden Index, EWD
3.00% Turkey MSCI iS, TUR
2.87% Thailand MSCI iS, THD
2.81% Brazil Index, EWZ
2.77% India Earnings WTree, EPI
2.76% Energy & Nat Res iS GS, IGE
2.74% Materials SPDR, XLB
2.67% Australia Index, EWA
2.64% Canada Index, EWC
2.62% Pacific ex-Japan, EPP
2.58% Emerging Markets, EEM
2.54% China LargeCap Growth G D H USX PS, PGJ
2.54% Emerging VIPERs, VWO
2.54% Homebuilders SPDR, XHB
2.53% Austria Index, EWO
2.51% Silver Trust iS, SLV
2.47% Emerging 50 BLDRS, ADRE
2.46% Belgium Index, EWK
2.41% Semiconductor SPDR, XSD
2.40% South Africa Index, EZA
2.29% Italy Index, EWI
2.27% Hong Kong Index, EWH
2.24% Transportation Av DJ, IYT
2.23% Latin Am 40, ILF
2.21% Energy VIPERs, VDE
2.21% Growth EAFE MSCI, EFG
2.18% Energy SPDR, XLE
2.18% Indonesia MV, IDX
2.17% Capital Markets KWB ST, KCE
2.16% Energy DJ, IYE
2.15% United Kingdom Index, EWU
2.14% Industrial SPDR, XLI
2.10% France Index, EWQ
2.09% Netherlands Index, EWN
2.09% European VIPERs, VGK
2.07% Energy Global, IXC
2.07% Global ex US ACWI iS, ACWX
2.06% India PS, PIN
2.04% Switzerland Index, EWL
2.01% Germany Index, EWG
2.00% Financial Services DJ, IYG
1.98% Value MidCap S&P 400 B, IJJ
1.98% Europe 350 S&P Index, IEV
1.97% Small Cap EAFE MSCI iS, SCZ
1.93% Malaysia Index, EWM
1.90% Semiconductor iS IGW, SOXX
1.87% Financial DJ US, IYF
1.87% Financial SPDR, XLF
1.83% Russia MV, RSX
1.82% EAFE Index, EFA
1.79% MidCap S&P 400 iS, IJH
1.79% Water Resources, PHO
1.79% MidCap S&P 400 SPDRs, MDY
1.77% EMU Europe Index, EZU
1.77% Growth MidCap Russell, IWP
1.75% Financials VIPERs, VFH
1.71% Small Cap VIPERs, VB
1.69% Growth SmallCap VIPERs, VBK
1.68% Growth MidCap 400 B, IJK
1.67% Value SmallCap VIPERS, VBR
1.66% Dividend International, PID
1.66% MidCap Russell, IWR
1.63% LargeCap Blend S&P=Weight R, RSP
1.62% Networking, IGN
1.61% Value S&P 500 B, IVE
1.59% Singapore Index, EWS
1.59% Value EAFE MSCI, EFV
1.58% Value SmallCap S&P 600 B, IJS
1.58% Growth SmallCap R 2000, IWO
1.55% Value MidCap Russell, IWS
1.51% Blend Total Market VIPERs, VTI
1.50% South Korea Index, EWY
1.48% Value 1000 Russell, IWD
1.47% Value SmallCap Russell 2000, IWN
1.46% DIAMONDS (DJIA), DIA
1.44% Growth 1000 Russell, IWF
1.44% Growth VIPERs, VUG
1.44% LargeCap 1000 R, IWB
1.43% SmallCap Russell 2000, IWM
1.43% S&P 500 iS LargeCap Blend, IVV
1.42% Real Estate US DJ, IYR
1.42% Info Tech VIPERs, VGT
1.41% LargeCap Blend Russell 3000, IWV
1.40% REIT Wilshire, RWR
1.39% SmallCap S&P 600, IJR
1.39% LargeCap VIPERs, VV
1.38% REIT VIPERs, VNQ
1.38% Realty Cohen & Steers, ICF
1.38% Technology DJ US, IYW
1.37% Frontier Markets Guggenheim , FRN
1.36% Pacific VIPERs, VPL
1.36% Growth BARRA Small Cap 600, IJT
1.35% Taiwan Index, EWT
1.32% Mexico Index, EWW
1.31% Value VIPERs, VTV
1.31% Commodity Tracking, DBC
1.31% S&P 500 SPDRs LargeCap Blend, SPY
1.30% Dividend Appreciation Vipers, VIG
1.27% Consumer Discretionary SPDR, XLY
1.25% LargeCap Blend S&P 100, OEF
1.25% Chile MSCI iS, ECH
1.23% Dividend SPDR, SDY
1.23% Technology SPDR, XLK
1.21% Global 100, IOO
1.18% Growth S&P 500/BARRA, IVW
1.15% WilderHill Clean Energy PS, PBW
1.14% QQQ Nasdaq 100 Trust, QQQ
1.10% Oil, Crude, U.S. Oil Fund, USO
1.09% Microcap Russell, IWC
1.04% Oil Fund PowerShares, DBO
1.02% Gold Shares S.T., GLD
1.01% Agriculture DB PS, DBA
0.98% Dividend High Yield Equity PS, PEY
0.97% Dividend DJ Select, DVY
0.96% Financial Preferred, PGF
0.90% Bond, High-Yield Corporate, HYG
0.87% Telecom DJ US, IYZ
0.86% Preferred Stock iS, PFF
0.79% Value LargeCap Dynamic PS, PWV
0.72% Bond, High-Yield Junk, JNK
0.64% Bond Ex-US Treas, BWX
0.54% Health Care SPDR, XLV
0.48% Bond EmrgMkt JPM iS, EMB
0.46% Japan Index, EWJ
0.43% Utilities VIPERs, VPU
0.31% Utilities SPDR, XLU
0.28% Biotech SPDR, XBI
0.09% Consumer Staples SPDR, XLP
0.07% Spain Index, EWP
0.04% Bond, Corp, LQD
0.01% Bond, 1-3 Year Treasury, SHY
0.01% Bond Treasury Short-Term iS, SHV
-0.10% Bond, Aggregate, AGG
-0.19% Bond, TIPS, TIP
-0.20% Bond, 10 Year Treasury, IEF
-0.42% Bond, 20+ Years Treasury, TLT
-0.48% Bond Muni ATM-Free S&P iS, MUB
-1.42% Bear, Short S&P 500, SH
