S&P 500 Flashing A Clear Bearish Chart Signal

Many breakdowns in diverse markets…

Crude Oil, United States Oil ETF (USO) fell further below its lows of the previous 7 weeks.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the past 2.5 months.

CRB Commodity Price Index fell below its lows of the previous 3 months.

Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below its lows of the previous 3 months.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below its lows of the previous 4 months.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell further below its lows of the previous 2.5 months.

The Dow Theory signaled a downside Secondary Reaction, 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.

The S&P 500 Composite (SPX: 1,382.20) fell below the lows of the previous 4 weeks.

The S&P 500 chart broke down below the rising lower boundary line of a Bearish Rising Wedge, thereby flashing a clear bearish chart signal. Stock prices could quickly erase first quarter gains.

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.

The NYSE Cumulative Daily Advance-Decline Line fell below its 50-day SMA and fell further below its lows of the previous 4 weeks. In recent weeks, this A-D Line demonstrated significant bearish divergences and early warnings: it peaked on 3/13/12 and made lower highs on 3/26/12 and 4/2/12.

RSI(14) based on SPX fell below its midpoint of 50 and below the lows of the previous 3 months. RSI gave previous early warnings by showing bearish divergences–a series of lower highs since peaking at 75.38 on 2/9/12.

MACD based on SPX fell below its lows of the previous 3 months and remains bearish. MACD remains below its signal line, and fell further below its high set on 2/9/12, which appears to have been the momentum peak for the rally.

On-Balance Volume based on SPX fell below the lows of the previous 4 weeks after a previous bearish divergence: it peaked on 3/19/12, made a lower high on 3/26/12, and fell below its 3 previous lows for the first time this year on 4/5/12.

NYSE New Highs Minus New Lows were bearish, with net New Lows, after making a series of lower highs over the past 2 months.

Following an unusual first quarter, odds are stocks will experience the usual ups and downs this year. After large price run ups, stocks become more vulnerable to sudden reversals. Potential Reward relative to potential Risk remains unattractive for stocks at this time.
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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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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
1386.87, low of 3/23/2012

The S&P 500 Composite Potential Support
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
1370.58, high of 5/2/11
1371.33, 50-day SMA
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
1270.13, 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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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
2.34% , TLT , Bond, 20+ Years Treasury, TLT
2.45% , MZZ , Short 200% MidCap 400 PS, MZZ
0.92% , DOG , Short 100% Dow 30, DOG
1.91% , DXD , Short 200% Dow 30 PS, DXD
0.17% , ADRU , Europe 100 BLDRS, ADRU
2.76% , RIMM , RESEARCH IN MOTION LTD
2.19% , SDS , Short 200% S&P 500 PS, SDS
1.91% , EBAY , EBAY
1.25% , MYY , Short 100% MidCap 400, MYY
1.50% , QID , Short 200% QQQ PS, QID
3.70% , SVU , SUPERVALU
0.93% , OMX , OFFICEMAX INC., OMX
0.43% , ITF , Japan LargeCap Blend TOPIX 150, ITF
1.02% , IEF , Bond, 10 Year Treasury, IEF
0.85% , KBH , KB HOME
1.11% , CCL , CARNIVAL STK A
0.49% , BWX , Bond Ex-US Treas, BWX
0.74% , PSQ , Short 100% QQQ, PSQ
1.43% , TLH , Bond 10-20 Year US Treas, TLH
0.46% , TIP , Bond, TIPS, TIP
0.27% , NKE , NIKE STK B
0.15% , VRSN , VeriSign Inc
0.26% , MCD , MCDONALDS
0.20% , GNTX , Gentex Corporation
0.37% , BIDU , Baidu, Inc., BIDU
0.22% , HP , Helmerich & Payne HP
0.24% , GVI , Bond Interm U.S. Gov, GVI
0.58% , ABC , AMERISOURCEBERGN
0.96% , SHW , SHERWIN WILLIAMS
0.07% , SHY , Bond, 1-3 Year Treasury, SHY
0.13% , HPQ , HEWLETT PACKARD
0.03% , APOL , APOLLO GROUP
0.69% , IAU , Gold COMEX iS, IAU

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.55% , MTK , Technology MS sT, MTK
-1.94% , KCE , Capital Markets KWB ST, KCE
-1.19% , PEJ , Leisure & Entertainment, PEJ
-1.97% , PXQ , Networking, PXQ
-1.19% , TMW , Wilshire 5000 ST TM, TMW
-1.49% , PPA , Aerospace & Defense, PPA
-1.21% , ISI , LargeCap Blend S&P 1500 iS, ISI
-7.04% , MTG , MGIC INVESTMENT
-1.24% , JKI , Value MidCap iS M, JKI
-2.90% , ASH , ASHLAND
-2.31% , LNCR , Lincare Holdings Inc
-2.84% , XBI , Biotech SPDR, XBI
-3.42% , CECO , CAREER EDUCATION CORP
-4.68% , TBT , 200% Short US T Bond, TBT
-1.31% , IVE , Value S&P 500 B, IVE
-1.11% , PBJ , Food & Beverage, PBJ
-2.43% , TMO , THERMO ELECTRON
-3.49% , LH , LAB CRP OF AMER
-1.56% , PJP , Pharmaceuticals, PJP
-1.01% , PKB , Building & Construction, PKB
-0.81% , JKE , Growth LargeCap iS M, JKE
-2.77% , HSP , HOSPIRA
-3.92% , MAS , MASCO
-1.74% , IYT , Transportation Av DJ, IYT
-1.15% , SDY , Dividend SPDR, SDY
-1.43% , IYH , Healthcare DJ, IYH
-1.26% , JKL , Value SmallCap iS M, JKL
-5.03% , STJ , ST JUDE MEDICAL
-1.48% , EWI , Italy Index, EWI
-3.52% , BC , BRUNSWICK
-1.54% , IYJ , Industrial LargeCap Blend DJ US, IYJ
-1.10% , EWP , Spain Index, EWP
-3.04% , HOG , HARLEY DAVIDSON
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.34% Bond, 20+ Years Treasury, TLT
1.14% Bear, Short S&P 500, SH
1.02% Bond, 10 Year Treasury, IEF
0.67% Gold Shares S.T., GLD
0.67% Bond Muni ATM-Free S&P iS, MUB
0.65% Bond, Corp, LQD
0.49% Bond Ex-US Treas, BWX
0.46% Bond, TIPS, TIP
0.44% Bond, Aggregate, AGG
0.32% Bond EmrgMkt JPM iS, EMB
0.07% Bond, 1-3 Year Treasury, SHY
0.00% Bond Treasury Short-Term iS, SHV
-0.18% United Kingdom Index, EWU
-0.18% Preferred Stock iS, PFF
-0.19% France Index, EWQ
-0.22% Financial Preferred, PGF
-0.25% Switzerland Index, EWL
-0.25% Agriculture DB PS, DBA
-0.34% Belgium Index, EWK
-0.36% Bond, High-Yield Junk, JNK
-0.39% Small Cap EAFE MSCI iS, SCZ
-0.42% Silver Trust iS, SLV
-0.43% EAFE Index, EFA
-0.45% Europe 350 S&P Index, IEV
-0.45% Commodity Tracking, DBC
-0.50% European VIPERs, VGK
-0.51% Utilities SPDR, XLU
-0.51% Bond, High-Yield Corporate, HYG
-0.53% Dividend International, PID
-0.54% Metals & Mining SPDR, XME
-0.55% Malaysia Index, EWM
-0.55% Netherlands Index, EWN
-0.59% Austria Index, EWO
-0.60% EMU Europe Index, EZU
-0.61% Utilities VIPERs, VPU
-0.61% Japan Index, EWJ
-0.66% Technology DJ US, IYW
-0.66% Latin Am 40, ILF
-0.67% Growth EAFE MSCI, EFG
-0.67% Oil Fund PowerShares, DBO
-0.68% Global ex US ACWI iS, ACWX
-0.70% Technology SPDR, XLK
-0.73% Info Tech VIPERs, VGT
-0.74% Oil, Crude, U.S. Oil Fund, USO
-0.75% Pacific VIPERs, VPL
-0.75% QQQ Nasdaq 100 Trust, QQQ
-0.77% Brazil Index, EWZ
-0.80% Value EAFE MSCI, EFV
-0.81% Homebuilders SPDR, XHB
-0.81% Germany Index, EWG
-0.82% Australia Index, EWA
-0.82% Energy Global, IXC
-0.85% Frontier Markets Guggenheim , FRN
-0.87% Mexico Index, EWW
-0.88% Global 100, IOO
-0.89% Taiwan Index, EWT
-0.90% Canada Index, EWC
-0.91% Sweden Index, EWD
-0.91% Consumer Staples SPDR, XLP
-0.91% Consumer Discretionary SPDR, XLY
-0.91% Dividend DJ Select, DVY
-0.93% Growth S&P 500/BARRA, IVW
-0.94% Realty Cohen & Steers, ICF
-0.94% Thailand MSCI iS, THD
-0.96% Real Estate US DJ, IYR
-0.97% Value LargeCap Dynamic PS, PWV
-0.97% DIAMONDS (DJIA), DIA
-0.99% LargeCap Blend S&P 100, OEF
-1.00% REIT Wilshire, RWR
-1.01% Emerging 50 BLDRS, ADRE
-1.02% Pacific ex-Japan, EPP
-1.03% Hong Kong Index, EWH
-1.03% Indonesia MV, IDX
-1.03% Singapore Index, EWS
-1.03% Growth VIPERs, VUG
-1.04% Telecom DJ US, IYZ
-1.06% Dividend High Yield Equity PS, PEY
-1.07% REIT VIPERs, VNQ
-1.08% Growth 1000 Russell, IWF
-1.10% Spain Index, EWP
-1.11% LargeCap VIPERs, VV
-1.12% Dividend Appreciation Vipers, VIG
-1.12% S&P 500 SPDRs LargeCap Blend, SPY
-1.15% S&P 500 iS LargeCap Blend, IVV
-1.15% LargeCap 1000 R, IWB
-1.15% Dividend SPDR, SDY
-1.17% Blend Total Market VIPERs, VTI
-1.17% LargeCap Blend Russell 3000, IWV
-1.18% Value VIPERs, VTV
-1.20% Energy & Nat Res iS GS, IGE
-1.20% Value MidCap Russell, IWS
-1.20% Growth MidCap 400 B, IJK
-1.22% MidCap S&P 400 SPDRs, MDY
-1.23% Energy VIPERs, VDE
-1.24% Networking, IGN
-1.25% MidCap S&P 400 iS, IJH
-1.25% Health Care SPDR, XLV
-1.26% Energy SPDR, XLE
-1.27% MidCap Russell, IWR
-1.27% Value MidCap S&P 400 B, IJJ
-1.28% Value 1000 Russell, IWD
-1.30% Energy DJ, IYE
-1.31% LargeCap Blend S&P=Weight R, RSP
-1.31% Value S&P 500 B, IVE
-1.33% Semiconductor iS IGW, SOXX
-1.37% South Africa Index, EZA
-1.37% Growth MidCap Russell, IWP
-1.38% Financial DJ US, IYF
-1.39% Financials VIPERs, VFH
-1.39% China LargeCap Growth G D H USX PS, PGJ
-1.40% Basic Materials DJ US, IYM
-1.45% Emerging VIPERs, VWO
-1.45% Materials SPDR, XLB
-1.47% Chile MSCI iS, ECH
-1.47% Value SmallCap VIPERS, VBR
-1.47% Emerging Markets, EEM
-1.48% Italy Index, EWI
-1.50% Value SmallCap Russell 2000, IWN
-1.51% Financial SPDR, XLF
-1.52% Growth BARRA Small Cap 600, IJT
-1.52% Small Cap VIPERs, VB
-1.53% Growth SmallCap VIPERs, VBK
-1.57% Financial Services DJ, IYG
-1.58% SmallCap S&P 600, IJR
-1.62% Industrial SPDR, XLI
-1.64% SmallCap Russell 2000, IWM
-1.69% Water Resources, PHO
-1.73% Growth SmallCap R 2000, IWO
-1.74% Microcap Russell, IWC
-1.74% Transportation Av DJ, IYT
-1.76% China 25 iS, FXI
-1.77% Value SmallCap S&P 600 B, IJS
-1.79% South Korea Index, EWY
-1.81% India Earnings WTree, EPI
-1.93% Turkey MSCI iS, TUR
-1.94% Capital Markets KWB ST, KCE
-2.02% Semiconductor SPDR, XSD
-2.07% India PS, PIN
-2.25% Russia MV, RSX
-2.29% WilderHill Clean Energy PS, PBW
-2.84% Biotech SPDR, XBI