Stock Market: Losing Steam, Vulnerable to a Downside Shakeout.

Gold, SPDR Gold Shares ETF (GLD) confirmed a bullish trend. GLD rose above the highs of the previous 7 weeks.

Silver, iShares Silver Trust ETF (SLV) confirmed a bullish short-term trend. SLV rose above the highs of the previous 10 weeks.

U.S. dollar ETF (UUP) confirmed a downside correction. UUP fell below the lows of the previous 8 weeks.

Last week, the S&P 500 Composite (SPX: 1,316.33) rose 0.07% while the Dow Jones Industrial Average (DJI: 12,660.46) lost 0.47%.

The stock market has been overbought for many days and is overdue for a downside correction.

It is clear that the rally is losing steam. Bearish divergences are evident in short-term momentum indicators.

RSI(14) fell below the readings of the previous 7 trading days and broke down further below a 5-week uptrend line.

The latest sentiment data indicates more optimism and bullish complacency. When the majority of investors is bullish, and therefore already invested in the market, stocks are vulnerable to a downside shakeout. The pendulum of emotion tends to swing too far in one direction, but market mood always reverts to the mean.
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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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Stock Market Indicators

AAII Sentiment: There were 48% Bulls and 19% Bears, according to the AAII weekly survey reported on 1/26/11. That was an uptick in mood from the previous week’s reading, and it was nearly 1.3 standard deviations more optimistic than the 20-year average.

VIX Fear Index broke down below the lows of the previous 5 months on 1/26/12, hitting 16.80 intraday. That is down from recent peaks of 30.91 on 12/8/11, 37.83 on 11/1/11, 46.88 on 10/4/11, and 48.00 on 8/8/11. This drop indicates a shift away from fear and toward confidence, which, according to Humphrey Bancroft Neill’s Art of Contrary Thinking, may be bearish. 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 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
1406.32, high of 5/29/2008
1381.50, Fibonacci 78.6% of 2007-2009 range
1376.55, Fibonacci 100.0% projection 10/11 range
1370.58, high of 5/2/11
1359.44, high of 5/10/11
1356.48, high of 7/7/11
1349.31, Fibonacci 87.5% projection 10/11 range
1347.00, high of 7/21/11
1333.47, high of 1/26/2012

The S&P 500 Composite Potential Support
1306.06, low of 1/24/2012
1277.58, low of 1/13/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1257.20, 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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Tangible Assets, Commodities

U.S. dollar ETF (UUP) confirmed a downside correction. UUP fell below the lows of the previous 8 weeks on 1/27/12 and fell below its 50-day SMA on 1/23/11, signaling a correction. UUP remains above its 200-day SMA, and the 50-day SMA has remained above the 200-day SMA every day since 10/26/11. Support 21.97, 21.92, 21.58, 21.07, and 20.84. Resistance 22.41, 22.46, 22.85, 23.52, 25.84, 27.19, 28.97.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) whipsawed back above its 50-day SMA on 1/23/12. DBA remains bearishly below its 200-day SMA, and the 50-day SMA has remained bearishly below the 200-day SMA every day since 8/8/11.

Crude Oil, United States Oil ETF (USO) has been correcting and consolidating over the past 16 trading days. USO broke out above the highs of the previous 7 months on 1/4/12, thereby confirming a major uptrend. Support 37.49, 35.73, 34.54, 32.52, 29.10, 26.28, and 22.74. Resistance 39.96, 40.74, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) confirmed a bullish trend. GLD rose above the highs of the previous 7 weeks on 1/27/12 and broke out above a 4-month downtrend line on 1/25/12. GLD rose above its 50-day SMA on 1/23/12. GLD remains above its 200-day SMA, and the 50-day SMA has remained bullishly above the 200-day SMA every day since 2/11/09. Support: 167.05, 160.29, 159.68, 158.01, 156.19, 154.55, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 170.80, 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 1/24/12, thereby reconfirming a bearish major trend for the long term. GDX/GLD remains bearishly below its 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained bearishly below the 200-day SMA every day since 2/22/11.

Silver, iShares Silver Trust ETF (SLV) confirmed a bullish short-term trend. SLV rose above the highs of the previous 10 weeks on 1/27/12 and rose above its 50-day SMA on 1/20/12. SLV remains below its falling 200-day SMA, and the 50-day SMA has remained below the 200-day SMA every day since 10/27/11. Support 30.67, 28.63, 27.83, 25.65, and 24.44. Resistance: 34.44, 34.51, 40.23, 41.49, 42.30, 42.78, 44.71 and 48.35.

Silver/Gold ETFs Ratio (SLV/GLD) has been rising since 12/28/11. SLV/GLD rose above the highs of the previous 11 weeks on 1/27/12. SLV/GLD rose above its 50-day SMA on 1/20/12 but remains below its falling 200-day SMA. Longer term, SLV/GLD fell below the lows of the previous 14 months on 12/28/11, and the 50-day SMA has remained below the 200-day SMA every day since 8/30/11.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) rose above the highs of the previous 4 months on 1/26/12, rose above its 50-day SMA on 1/10/12, and closed above its 200-day SMA on 1/27/12. Longer term, JJC’s 50-day SMA has remained bearishly below the 200-day SMA every day since 8/8/11.
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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
6.98% , EMN , EASTMAN CHEM
7.97% , NWL , NEWELL RUBBER
6.98% , MTG , MGIC INVESTMENT
2.94% , QLGC , QLOGIC
4.12% , KLAC , KLA TENCOR
6.02% , BIDU , Baidu, Inc., BIDU
0.81% , EWK , Belgium Index, EWK
0.93% , EPP , Pacific ex-Japan, EPP
1.84% , RIG , TRANSOCEAN
7.89% , HGSI , Human Genome Sciences Inc
5.18% , KWT , Solar Energy MV, KWT
0.92% , PZI , Micro Cap Zachs, PZI
1.07% , JKK , Growth SmallCap iS M, JKK
1.11% , VRSN , VeriSign Inc
0.80% , EWP , Spain Index, EWP
2.97% , DDS , DILLARD STK A
0.84% , EWG , Germany Index, EWG
0.92% , VBK , Growth SmallCap VIPERs, VBK
2.60% , HAL , HALLIBURTON
2.20% , THD , Thailand MSCI iS, THD
0.85% , FRN , Frontier Markets Guggenheim , FRN
0.40% , RPV , Value S&P 500, RPV
2.96% , GS , GOLDMAN SACHS
2.32% , RYAAY , Ryanair Holdings plc
0.58% , LNCR , Lincare Holdings Inc
3.29% , CECO , CAREER EDUCATION CORP
0.59% , YUM , YUM BRANDS
0.15% , IWW , Value LargeCap Russell 3000, IWW
0.40% , RTH , Retail H, RTH
0.43% , EFG , Growth EAFE MSCI, EFG
0.43% , JKE , Growth LargeCap iS M, JKE
1.91% , TUP , TUPPERWARE
0.17% , EZU , EMU Europe Index, EZU

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.72% , PFM , Dividend Achievers PS, PFM
-6.75% , RHI , ROBERT HALF
-4.16% , CB , CHUBB
-5.93% , FII , FED INVESTORS STK B
-5.37% , DV , DeVry, Inc.
-0.77% , IGN , Networking, IGN
-4.53% , F , FORD MOTOR
-2.82% , CLF , CLIFFS NATURAL RESOURCES, CLF
-1.52% , SNI , Scripps Networks Interactive
-2.54% , D , DOMINION RSCS
-2.15% , GNTX , Gentex Corporation
-3.79% , DISH , EchoStar Communications
-0.27% , PID , Dividend International, PID
-2.51% , ACE , ACE
-0.65% , EWU , United Kingdom Index, EWU
-4.76% , LM , LEGG MASON
-1.25% , BF.B , BROWN FORMAN STK B
-2.47% , CVX , CHEVRONTEXACO
-0.52% , FDL , Dividend Leaders, FDL
-3.50% , LO , Lorillard, Inc. LO
-1.74% , LPX , LOUISIANA PAC
-1.74% , XL , XL CAPITAL STK A
-2.00% , TROW , T ROWE PRICE GP
-0.85% , GCI , GANNETT
-1.37% , AMAT , APPLIED MATERIAL
-1.09% , PWER , POWER ONE
-0.65% , VDC , Consumer Staples VIPERs, VDC
-1.81% , MO , ALTRIA, MO
-0.44% , JKF , Value LargeCap iS M, JKF
-1.19% , TEVA , Teva Pharmaceutical Industries Limited
-0.14% , PRF , Value LargeCap Fundamental RAFI 1000, PRF
-1.08% , VPU , Utilities VIPERs, VPU
-1.36% , CSCO , CISCO SYSTEMS
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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% Biotech SPDR, XBI
2.79% Turkey MSCI iS, TUR
2.20% Thailand MSCI iS, THD
2.05% WilderHill Clean Energy PS, PBW
1.83% China LargeCap Growth G D H USX PS, PGJ
1.63% Silver Trust iS, SLV
1.55% Singapore Index, EWS
1.27% Metals & Mining SPDR, XME
1.21% South Africa Index, EZA
1.14% Austria Index, EWO
1.14% Bond Ex-US Treas, BWX
1.07% China 25 iS, FXI
1.02% Gold Shares S.T., GLD
0.93% Pacific ex-Japan, EPP
0.92% Growth SmallCap VIPERs, VBK
0.89% Russia MV, RSX
0.88% Growth SmallCap R 2000, IWO
0.85% Frontier Markets Guggenheim , FRN
0.84% Basic Materials DJ US, IYM
0.84% Germany Index, EWG
0.84% Transportation Av DJ, IYT
0.81% Belgium Index, EWK
0.80% Spain Index, EWP
0.79% Homebuilders SPDR, XHB
0.76% Small Cap VIPERs, VB
0.74% Microcap Russell, IWC
0.73% Emerging VIPERs, VWO
0.73% South Korea Index, EWY
0.71% Value SmallCap VIPERS, VBR
0.68% SmallCap Russell 2000, IWM
0.67% Financial Services DJ, IYG
0.65% Growth BARRA Small Cap 600, IJT
0.62% Growth MidCap 400 B, IJK
0.61% MidCap S&P 400 SPDRs, MDY
0.60% Mexico Index, EWW
0.60% Emerging 50 BLDRS, ADRE
0.59% Sweden Index, EWD
0.58% Small Cap EAFE MSCI iS, SCZ
0.57% MidCap S&P 400 iS, IJH
0.56% Chile MSCI iS, ECH
0.54% Value MidCap S&P 400 B, IJJ
0.53% Japan Index, EWJ
0.52% Emerging Markets, EEM
0.50% Netherlands Index, EWN
0.49% Value SmallCap S&P 600 B, IJS
0.48% Value SmallCap Russell 2000, IWN
0.47% India PS, PIN
0.45% Pacific VIPERs, VPL
0.45% SmallCap S&P 600, IJR
0.43% Growth EAFE MSCI, EFG
0.43% Australia Index, EWA
0.41% Hong Kong Index, EWH
0.41% Global ex US ACWI iS, ACWX
0.41% Growth MidCap Russell, IWP
0.36% Financial SPDR, XLF
0.36% Commodity Tracking, DBC
0.34% Preferred Stock iS, PFF
0.32% Energy & Nat Res iS GS, IGE
0.32% Semiconductor iS IGW, SOXX
0.32% Latin Am 40, ILF
0.31% Bond, 20+ Years Treasury, TLT
0.31% MidCap Russell, IWR
0.30% Bond, 10 Year Treasury, IEF
0.30% QQQ Nasdaq 100 Trust, QQQ
0.30% Switzerland Index, EWL
0.28% Malaysia Index, EWM
0.27% Water Resources, PHO
0.27% Financials VIPERs, VFH
0.25% Canada Index, EWC
0.25% Real Estate US DJ, IYR
0.25% Financial DJ US, IYF
0.24% Brazil Index, EWZ
0.23% REIT Wilshire, RWR
0.22% Semiconductor SPDR, XSD
0.21% Info Tech VIPERs, VGT
0.21% Bond, TIPS, TIP
0.21% India Earnings WTree, EPI
0.20% Indonesia MV, IDX
0.19% Technology DJ US, IYW
0.17% EAFE Index, EFA
0.17% EMU Europe Index, EZU
0.16% Bond, Aggregate, AGG
0.16% Realty Cohen & Steers, ICF
0.15% Bond, Corp, LQD
0.13% Materials SPDR, XLB
0.12% Financial Preferred, PGF
0.11% Value EAFE MSCI, EFV
0.11% Value MidCap Russell, IWS
0.09% European VIPERs, VGK
0.08% Growth VIPERs, VUG
0.07% Blend Total Market VIPERs, VTI
0.07% Growth 1000 Russell, IWF
0.06% LargeCap Blend Russell 3000, IWV
0.06% Health Care SPDR, XLV
0.06% Europe 350 S&P Index, IEV
0.04% LargeCap Blend S&P=Weight R, RSP
0.03% REIT VIPERs, VNQ
0.03% Capital Markets KWB ST, KCE
0.03% Bear, Short S&P 500, SH
0.02% Bond, 1-3 Year Treasury, SHY
0.00% Technology SPDR, XLK
0.00% LargeCap VIPERs, VV
0.00% LargeCap 1000 R, IWB
-0.01% Bond Treasury Short-Term iS, SHV
-0.05% S&P 500 SPDRs LargeCap Blend, SPY
-0.05% Telecom DJ US, IYZ
-0.06% Value 1000 Russell, IWD
-0.06% S&P 500 iS LargeCap Blend, IVV
-0.07% Growth S&P 500/BARRA, IVW
-0.07% Consumer Discretionary SPDR, XLY
-0.08% Industrial SPDR, XLI
-0.09% Energy VIPERs, VDE
-0.09% Value VIPERs, VTV
-0.12% Bond EmrgMkt JPM iS, EMB
-0.13% Value S&P 500 B, IVE
-0.14% France Index, EWQ
-0.16% Taiwan Index, EWT
-0.18% Bond Muni ATM-Free S&P iS, MUB
-0.18% Oil, Crude, U.S. Oil Fund, USO
-0.20% LargeCap Blend S&P 100, OEF
-0.21% Energy SPDR, XLE
-0.22% Energy DJ, IYE
-0.27% Dividend International, PID
-0.28% Oil Fund PowerShares, DBO
-0.28% Global 100, IOO
-0.30% Bond, High-Yield Junk, JNK
-0.32% Dividend High Yield Equity PS, PEY
-0.34% Agriculture DB PS, DBA
-0.36% Bond, High-Yield Corporate, HYG
-0.38% Italy Index, EWI
-0.40% Dividend SPDR, SDY
-0.43% Energy Global, IXC
-0.48% DIAMONDS (DJIA), DIA
-0.51% Dividend Appreciation Vipers, VIG
-0.56% Value LargeCap Dynamic PS, PWV
-0.65% United Kingdom Index, EWU
-0.68% Consumer Staples SPDR, XLP
-0.70% Dividend DJ Select, DVY
-0.77% Networking, IGN
-1.08% Utilities VIPERs, VPU
-1.22% Utilities SPDR, XLU