Stocks are bouncing, and there is no change in my analysis. Before the open on Thursday, August 11, 2011, I wrote: “The high-volume price drops in recent days might add up to a temporary selling climax that could clear the decks for recovery attempts in days ahead. Because it is now a Dow TheoryPrimary Tide Bear Market, however, playing Minor Ripple rally attempts against the Primary Tide probably will be difficult and risky. In days ahead, I would not be surprised to see two-way volatility as the bulls and bears struggle for dominance in an atmosphere of substantial uncertainty.”
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Stock Market Indicators
NASDAQ Composite/S&P 500 Relative Strength Ratio fell below the lows of the previous 5 weeks and its 200-day SMA on 8/8/11. The Ratio’s 50-day SMA crossed above the 200-day SMA on 8/10/11, which might be encouraging for the long-term trend of Relative Strength. Absolute price broke down below 10-month lows on 8/9/11 and remains bearish.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) remains bearish. The EEM/SPY Ratio broke down below 5-month lows on 8/8/11, remains below its 50- and 200-day SMAs, and the 50-day SMA remains below the 200-day SMA. Absolute price has been weak since 5/2/11 and broke down below 13-month lows on 8/8/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) has been in a major long-term downtrend since peaking on 11/27/07. The EFA/SPY Ratio remains below its 50- and 200-day SMAs, and the 50-day SMA remains below the 200-day SMA. Absolute price has been weak since 5/2/11 and broke down below 11-month lows on 8/8/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) rose above the highs of the previous 12 months on 8/8/11, confirming a relatively modest recovery in comparison to the previous major decline. OEX/SPX fell below 28-year lows on 5/26/11, confirming a bearish major trend. Absolute price of OEX fell below the lows of the previous 11 months on 8/9/11 and remains bearish.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) remains bearish. IWM/SPY fell below 10-month lows on 8/8/11.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) remains bearish. MDY/SPY fell below 11-month lows on 8/8/11.
Advisory Service Sentiment: There were 47.3% Bulls versus 23.7% Bears as of 8/10/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio actually rose to 2.00, up from 1.87 the previous week, indicating surprising bullish complacency in the face of dramatic stock price weakness. The 20-year median is 1.56 and the mean is 1.64.
VIX Fear Index rose to 48.00 on 8/8/11, its highest level in 14 months, since 5/21/10. Options players grew more fearful as the stock price decline accelerated. 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 Dow Theory signaled a Primary Tide Bear Market on 8/2/11, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed below their closing price lows of June, 2011.
The S&P 500 Composite (SPX, 1,172.64) rose 51.88 points or 4.63% on Thursday, August 11, 2011.
S&P 500 Cash Index 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
1406.32, high of 5/29/2008
1381.50, Fibonacci 78.6% of 2007-2009 range
1370.50, high of 5/2/11
1359.44, high of 5/10/11
1356.48, high of 7/7/11
1347.00, high of 7/21/11
1238.81, Fibonacci 78.6% of 1,576.09 high
1235.05, high of 12/7/10
1,234.56, low of 8/3/11
1232.85, low of 12/16/10
1228.74, Fibonacci 61.8% of 2007-2009 range
1227.08, high of 11/5/10
1249.05, low of 3/16/11
1246.73, high of 12/13/10
1238.81, Fibonacci 78.6% of 1,576.09 high
1235.05, high of 12/7/10
1232.85, low of 12/16/10
1228.74, Fibonacci 61.8% of 2007-2009 range
1227.08, high of 11/5/10
S&P 500 Cash Index Potential Support
1091.15, low of 9/7/2010
1039.70, low of 8/27/10
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
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
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
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) rose above the highs of the previous 11 months on 8/9/11, again confirming a significant uptrend. Although minor price consolidations and corrections are to be expected in bullish price trends, the dominant trend remains bullish. Support 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 109.37, 116.92, and 123.15.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below 2-year lows and fell further below its 20-, 50-, and 200-day simple moving averages on 8/10/11, confirming a major bearish trend.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below the lows of the previous 7 weeks on 8/8/11, confirming a short-term downtrend. TIP/IEF has been weak since peaking on 4/8/11 and remains below 3 key SMAs, of 20, 50, and 200 days. This means fixed-income investors have been choosing the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) remains in a major downtrend. UUP had been consolidating sideways since hitting a low of 20.84 on 5/4/11. Support 20.91 and 20.84. Resistance 21.74, 21.86, and 22.21.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) topped out on 3/4/11 and remains bearish.
Crude Oil, United States Oil ETF (USO) fell below the lows of the previous 2 years on 8/9/11, again confirming a significant downtrend. Support 30.31, 26.28, 22.74. Resistance 39.25, 40.74, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) fell below the previous day’s low on 8/11/11 in what appeared to be normal profit taking. GLD rose above all-time highs on 8/10/11. Although minor price consolidations and corrections are to be expected in bullish price trends, the dominant trend remains persistently bullish. In a world of too much debt, weak currencies, and self-serving politicians, investors around the globe seek the safety of gold as the only forever-true money. Support: 159.68, 156.11, 154.10, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: none.
Gold Mining Stocks ETF/ Gold Shares ETF Relative Strength Ratio (GDX/GLD) fell below 29-month lows on 8/8/11, again confirming a bearish major trend for the long term.
Silver, iShares Silver Trust ETF (SLV) fell below 3-week lows on 8/9/11, confirming a short-term price pullback. Longer term, the price action in Silver appears choppy and erratic since the spike top at 48.35 on 4/28/11. Support 35.29, 34.02, and 31.97. Resistance: 44.71 and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) fell below 6-month lows on 8/9/11, suggesting a significant downtrend.
Copper, iPath DJ-UBS Copper TR Sub-Idx ETN (JJC ) fell below the lows of the previous 8 months on 8/10/11, again confirming a significant downtrend. Weakness in Copper suggests doubts about the economic outlook. Support 49.00. Resistance: 56.64, 57.48, 59.06, 60.04, and 61.69.
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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
3.57% , PBJ , Food & Beverage, PBJ
7.19% , KCE , Capital Markets KWB ST, KCE
3.38% , FEU , Value LargeCap Euro STOXX 50 DJ, FEU
3.83% , SWH , Software H, SWH
6.13% , JKK , Growth SmallCap iS M, JKK
5.29% , JKG , MidCap Blend Core iS M, JKG
6.81% , PXE , Energy Exploration & Prod, PXE
3.92% , PPA , Aerospace & Defense, PPA
5.62% , BHH , Internet B2B H, BHH
15.95% , CSCO , CISCO SYSTEMS
4.91% , DGT , Global Titans, DGT
4.17% , PJP , Pharmaceuticals, PJP
5.29% , SCZ , Small Cap EAFE MSCI iS, SCZ
3.39% , PUI , Utilities, PUI
4.99% , RPG , Growth S&P 500, RPG
6.61% , IGN , Networking, IGN
4.69% , ISI , LargeCap Blend S&P 1500 iS, ISI
6.56% , PSI , Semiconductors, PSI
5.30% , JKJ , SmallCap Core iS M, JKJ
2.83% , PIC , Insurance, PIC
6.02% , PXJ , Oil & Gas, PXJ
2.60% , IIH , Internet Infrastructure H, IIH
14.15% , CIEN.O , CIENA
3.29% , ADRU , Europe 100 BLDRS, ADRU
5.58% , JKH , MidCap Growth iS M, JKH
6.05% , PWC , LargeCap Blend Dynamic PS, PWC
4.41% , EIS , Israel MSCI iS, EIS
4.95% , FEZ , Euro STOXX 50, FEZ
6.54% , PBW , WilderHill Clean Energy PS, PBW
7.78% , MCK , MCKESSON CORP
5.21% , ADRD , Developed 100 BLDRS, ADRD
4.53% , PEY , Dividend High Yield Equity PS, PEY
6.32% , PNW , PINNACLE WEST
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.50% , TLH , Bond 10-20 Year US Treas, TLH
-5.42% , MYY , Short 100% MidCap 400, MYY
-1.13% , EMB , Bond EmrgMkt JPM iS, EMB
-1.24% , AGG , Bond, Aggregate, AGG
-2.05% , LQD , Bond, Corp, LQD
-1.27% , SLE , SARA LEE
-10.52% , MZZ , Short 200% MidCap 400 PS, MZZ
-4.33% , PSQ , Short 100% QQQ, PSQ
-2.08% , TIP , Bond, TIPS, TIP
-2.19% , GLD , Gold Shares S.T., GLD
-1.27% , S , SPRINT NEXTEL
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
7.19% Capital Markets KWB ST, KCE
6.98% South Korea Index, EWY
6.92% Sweden Index, EWD
6.76% Indonesia MV, IDX
6.61% Networking, IGN
6.54% WilderHill Clean Energy PS, PBW
6.52% South Africa Index, EZA
6.26% Financial Services DJ, IYG
5.97% Australia Index, EWA
5.91% Italy Index, EWI
5.80% Turkey MSCI iS, TUR
5.76% Emerging VIPERs, VWO
5.73% United Kingdom Index, EWU
5.69% Semiconductor SPDR, XSD
5.67% Realty Cohen & Steers, ICF
5.61% Financial DJ US, IYF
5.58% Financial SPDR, XLF
5.55% European VIPERs, VGK
5.53% Pacific ex-Japan, EPP
5.53% Emerging Markets, EEM
5.50% Latin Am 40, ILF
5.47% Metals & Mining SPDR, XME
5.46% Basic Materials DJ US, IYM
5.46% REIT Wilshire, RWR
5.46% Financials VIPERs, VFH
5.41% China 25 iS, FXI
5.36% Water Resources, PHO
5.35% MidCap S&P 400 iS, IJH
5.31% Value MidCap S&P 400 B, IJJ
5.31% Spain Index, EWP
5.30% Growth MidCap 400 B, IJK
5.29% Small Cap EAFE MSCI iS, SCZ
5.28% MidCap S&P 400 SPDRs, MDY
5.26% Taiwan Index, EWT
5.20% Energy DJ, IYE
5.19% Energy SPDR, XLE
5.18% REIT VIPERs, VNQ
5.16% Mexico Index, EWW
5.13% LargeCap Blend S&P=Weight R, RSP
5.12% Growth BARRA Small Cap 600, IJT
5.12% China LargeCap Growth G D H USX PS, PGJ
5.12% Growth SmallCap R 2000, IWO
5.09% Growth SmallCap VIPERs, VBK
5.08% Russia MV, RSX
5.05% Energy VIPERs, VDE
5.03% Growth MidCap Russell, IWP
5.00% SmallCap Russell 2000, IWM
4.98% Value SmallCap VIPERS, VBR
4.97% SmallCap S&P 600, IJR
4.97% Value 1000 Russell, IWD
4.95% Value MidCap Russell, IWS
4.94% Semiconductor iS IGW, SOXX
4.94% Value SmallCap S&P 600 B, IJS
4.94% Materials SPDR, XLB
4.93% Small Cap VIPERs, VB
4.91% Energy Global, IXC
4.90% Germany Index, EWG
4.89% Value S&P 500 B, IVE
4.89% MidCap Russell, IWR
4.88% Europe 350 S&P Index, IEV
4.84% Austria Index, EWO
4.82% Brazil Index, EWZ
4.79% EAFE Index, EFA
4.78% Oil, Crude, U.S. Oil Fund, USO
4.76% EMU Europe Index, EZU
4.76% Industrial SPDR, XLI
4.72% Value VIPERs, VTV
4.70% Homebuilders SPDR, XHB
4.68% Value SmallCap Russell 2000, IWN
4.66% Real Estate US DJ, IYR
4.63% LargeCap VIPERs, VV
4.60% S&P 500 iS LargeCap Blend, IVV
4.59% LargeCap Blend Russell 3000, IWV
4.58% Blend Total Market VIPERs, VTI
4.57% Health Care SPDR, XLV
4.57% Value LargeCap Dynamic PS, PWV
4.53% Dividend High Yield Equity PS, PEY
4.51% Growth EAFE MSCI, EFG
4.50% Global ex US ACWI iS, ACWX
4.49% Dividend SPDR, SDY
4.49% S&P 500 SPDRs LargeCap Blend, SPY
4.49% LargeCap 1000 R, IWB
4.47% Energy & Nat Res iS GS, IGE
4.47% Emerging 50 BLDRS, ADRE
4.47% Value EAFE MSCI, EFV
4.45% France Index, EWQ
4.43% Consumer Discretionary SPDR, XLY
4.42% Growth VIPERs, VUG
4.42% Thailand MSCI iS, THD
4.40% QQQ Nasdaq 100 Trust, QQQ
4.40% Info Tech VIPERs, VGT
4.37% Dividend DJ Select, DVY
4.31% Dividend International, PID
4.26% Transportation Av DJ, IYT
4.25% Utilities VIPERs, VPU
4.23% India PS, PIN
4.22% Oil Fund PowerShares, DBO
4.22% Utilities SPDR, XLU
4.20% Growth 1000 Russell, IWF
4.19% Technology DJ US, IYW
4.19% Microcap Russell, IWC
4.14% Dividend Appreciation Vipers, VIG
4.10% Chile MSCI iS, ECH
4.09% LargeCap Blend S&P 100, OEF
4.08% Canada Index, EWC
4.01% Pacific VIPERs, VPL
3.96% Growth S&P 500/BARRA, IVW
3.88% Global 100, IOO
3.87% Biotech SPDR, XBI
3.81% Technology SPDR, XLK
3.81% DIAMONDS (DJIA), DIA
3.77% Japan Index, EWJ
3.75% Belgium Index, EWK
3.66% Frontier Markets Guggenheim , FRN
3.56% India Earnings WTree, EPI
3.49% Malaysia Index, EWM
3.44% Hong Kong Index, EWH
3.37% Telecom DJ US, IYZ
3.36% Netherlands Index, EWN
2.96% Consumer Staples SPDR, XLP
2.84% Singapore Index, EWS
2.71% Agriculture DB PS, DBA
2.43% Preferred Stock iS, PFF
2.17% Commodity Tracking, DBC
2.10% Financial Preferred, PGF
1.82% Bond, High-Yield Corporate, HYG
1.79% Silver Miners Global X, SIL
1.72% Bond, High-Yield Junk, JNK
1.14% Switzerland Index, EWL
0.26% Bond Ex-US Treas, BWX
0.01% Bond Treasury Short-Term iS, SHV
-0.02% Bond, 1-3 Year Treasury, SHY
-0.77% Bond Muni ATM-Free S&P iS, MUB
-1.13% Bond EmrgMkt JPM iS, EMB
-1.24% Bond, Aggregate, AGG
-1.47% Bond, 10 Year Treasury, IEF
-1.68% Silver Trust iS, SLV
-2.05% Bond, Corp, LQD
-2.08% Bond, TIPS, TIP
-2.19% Gold Shares S.T., GLD
-5.04% Bond, 20+ Years Treasury, TLT
