Highlights based on trading on Wednesday, June 6, 2012:
Gold, SPDR Gold Shares ETF (GLD) rose above its 50-day SMA, turning systematically neutral.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) turned systematically bearish when its 50-day SMA crossed below its 200-day SMA.
The S&P 500 (SPX: 1,315.13) rose 29.63 points or 2.30% on Wednesday. SPX rose above its 200-day SMA but remains systematically neutral below its 50-day SMA.
Yesterday, I wrote: “SPX could be “oversold”, with downside momentum temporarily exhausted for the short term.”
Given Wednesday’s strong upside momentum, some further upside correction appears possible. The extent and duration of any further recovery attempt seems highly uncertain, however, because the 2-day price bounce may not be in harmony with the trend in the next larger time frame, which seems more bearish than bullish since the SPX peak at 1,422.38 on 4/2/12.
NYSE volume rose 25% to confirm the temporary stock price bounce–for a change. Before Wednesday, volume patterns had been weak, with a tendency toward lower volume on up days and higher volume on down days, indicating the dominance of selling pressure over buying pressure.
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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
The Dow Theory confirmed a Primary Tide Bear Market on 6/4/12 when both Industrials and Transports closed below their closing price lows of the previous 5 months. The Dow Theory first 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.
NASDAQ Composite/S&P 500 Relative Strength Ratio fell below its lows of the previous 3 months on 5/18/12 after falling below its 50-day SMA on 4/30/12. Confirming this downtrend, absolute price fell below its lows of the previous 4 months and fell below its 200-day SMA on 6/1/12–this after falling below its 50-day SMA on 5/3/12. Looks like a significant downside correction, at least.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 3 years on 5/24/12, 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 3 years on 5/25/12, 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 5/30/12. 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 50-day SMA on 5/30/12, turning systematically bullish. OEX/SPX remains above its 200-day SMA, and the 50-day SMA remains above the 200-day SMA. 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 5 months on 5/22/12, reconfirming renewed downside momentum. Systematically, IWM/SPY returned to bearish status again on 4/20/12 when the 50-day SMA crossed below the 200-day SMA. Longer term, IWM/SPY has been relatively weak for more than a year, since 4/5/11.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) turned systematically bearish on 6/6/12 when its 50-day SMA crossed below its 200-day SMA. MDY/SPY remains below its 50-day SMA and 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
1415.32, high of 5/1/2012
1388.71, low of 5/3/2012
1360.46, 50-day SMA
1381.50, Fibonacci 78.6% of 2007-2009 range
1340.34, Fibonacci 23.6% R of 2011-12 range
1340.03, low of 3/6/2012
1334.93, high of 5/31/2012
The S&P 500 Composite Potential Support
1291.98, low of 5/18/2012
1289.59, Fibonacci 38.2% R of 2011-12 range
1,286.64, 200-day SMA
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% R 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
1226.64, low of 11/9/2011
1222.68, Fibonacci 50% of 2011 range
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1207.56, Fibonacci 61.8% R of 2011-12 range
1204.49, Fibonacci 23.6% of 2009-11 range
1202.37, low of 12/19/2011
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
1149.16, Fibonacci 78.6% R of 2011-12 range
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) price has pulled back but 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 6/24/11. Support 125.03, 120.60, 117.44, 115.69, 114.82, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance. 130.38.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) price has pulled back but 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 107.43, 105.85, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance 109.37.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below its lows of the previous 7 months on 6/1/12. Systematically, JNK/LQD remains bearish: below its 50-day SMA, below its 200-day SMA, and the 50-day SMA fell below the 200-day SMA on 6/1/12.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below its lows of the previous 5 months on 6/1/12. Systematically, TIP/IEF remains neutral: below its 50-day SMA, below its 200-day SMA, and the 50-day SMA has been above the 200-day SMA every day since 3/14/12.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price has pulled back but remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA. Support 22.39, 22.14, 21.89, 21.74, 21.58, 21.07, and 20.84. Resistance 23.02, 23.52, 25.84, 27.19, 28.97.
CRB Commodity Price Index fell below its lows of the previous 19 months on 6/4/12, for another a bearish trend confirmation. 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 20 months on 6/1/12. 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 months on 6/1/12. USO still looks bearish on the chart. Systematically, USO remains neutral: below its 50-day SMA, below its 200-day SMA, but the 50-day SMA has remained above the 200-day SMA consistently every day since 1/3/12. Support 29.10, 26.28, and 22.74. Resistance 34.76, 35.19, 36.97, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) rose above its 50-day SMA on 6/6/12, turning systematically neutral: Gold is above its 50-day SMA, below its 200-day SMA, and its 50-day SMA is below its 200-day SMA. Support: 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 162.18, 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 6/1/12, turning systematically neutral. GDX/GLD remains below its 200-day SMA, and the 50-day SMA has remained bearishly below the 200-day SMA every day since 2/22/11. Absolute price remains systematically bearish.
Silver, iShares Silver Trust ETF (SLV) fell below its lows of the previous 5 months on 6/1/12. 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 25.65 and 24.44. Resistance: 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 lows of the previous 5 months on 6/4/12, reconfirming a downtrend for the medium term. Systematically, SLV/GLD remains bearish 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 previous 5 months on 6/5/12. JJC turned bearish on 5/31/12 when the 50-day SMA crossed below the 200-day SMA. JJC fell below its 200-day SMA on 5/3/12 and fell below its 50-day SMA on 5/2/12. 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
3.27% , KCE , Capital Markets KWB ST, KCE
3.37% , XSD , Semiconductor SPDR, XSD
4.01% , PIN , India PS, PIN
4.24% , PSI , Semiconductors, PSI
2.63% , IOO , Global 100, IOO
7.61% , BAC , BANK OF AMERICA
3.45% , FEU , Value LargeCap Euro STOXX 50 DJ, FEU
2.39% , JKH , MidCap Growth iS M, JKH
2.77% , AVP , AVON
3.48% , EZU , EMU Europe Index, EZU
7.39% , KBH , KB HOME
2.44% , TUR , Turkey MSCI iS, TUR
6.49% , APOL , APOLLO GROUP
4.59% , RSX , Russia MV, RSX
6.56% , DYN , DYNEGY
1.73% , JKD , LargeCap Blend Core iS M, JKD
4.17% , EPI , India Earnings WTree, EPI
2.41% , PZI , Micro Cap Zachs, PZI
3.18% , PXN , Nanotech Lux, PXN
2.50% , RFV , Value MidCap S&P 400, RFV
3.15% , EWK , Belgium Index, EWK
3.45% , VGK , European VIPERs, VGK
3.63% , PXE , Energy Exploration & Prod, PXE
1.54% , IXJ , Healthcare Global, IXJ
2.27% , VTV , Value VIPERs, VTV
4.06% , EWP , Spain Index, EWP
1.22% , IDU , Utilities DJ, IDU
7.51% , S , SPRINT NEXTEL
2.95% , EWD , Sweden Index, EWD
2.59% , JKJ , SmallCap Core iS M, JKJ
8.40% , MS , MORGAN STANLEY
5.61% , APC , ANADARKO PETRO
3.45% , IXC , Energy Global, IXC
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.12% , MYY , Short 100% MidCap 400, MYY
-1.17% , TLH , Bond 10-20 Year US Treas, TLH
-3.50% , HAL , HALLIBURTON
-2.35% , PSQ , Short 100% QQQ, PSQ
-4.51% , SDS , Short 200% S&P 500 PS, SDS
-2.29% , SH , Short 100% S&P 500, SH
-0.67% , CTL , CENTURYTEL
-4.66% , QID , Short 200% QQQ PS, QID
-2.00% , TLT , Bond, 20+ Years Treasury, TLT
-1.05% , BHI , BAKER HUGHES
-0.47% , TIP , Bond, TIPS, TIP
-4.37% , MZZ , Short 200% MidCap 400 PS, MZZ
-0.52% , GRMN , GARMIN LTD
-0.66% , IEF , Bond, 10 Year Treasury, IEF
-1.74% , COH , COACH
-0.30% , AGG , Bond, Aggregate, AGG
-0.08% , GVI , Bond Interm U.S. Gov, GVI
-0.22% , HGSI , Human Genome Sciences Inc
-0.05% , DGX , QUEST DIAG
-0.29% , LQD , Bond, Corp, LQD
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
5.82% Indonesia MV, IDX
4.59% Russia MV, RSX
4.18% Italy Index, EWI
4.17% India Earnings WTree, EPI
4.06% Spain Index, EWP
4.01% India PS, PIN
3.86% France Index, EWQ
3.48% EMU Europe Index, EZU
3.46% Australia Index, EWA
3.45% Networking, IGN
3.45% European VIPERs, VGK
3.45% Energy Global, IXC
3.37% Semiconductor SPDR, XSD
3.37% Europe 350 S&P Index, IEV
3.36% Germany Index, EWG
3.27% Capital Markets KWB ST, KCE
3.19% Energy DJ, IYE
3.15% Semiconductor iS IGW, SOXX
3.15% Belgium Index, EWK
3.13% Netherlands Index, EWN
3.12% Switzerland Index, EWL
3.10% Energy VIPERs, VDE
3.09% Energy SPDR, XLE
3.08% United Kingdom Index, EWU
3.00% Transportation Av DJ, IYT
2.98% Global ex US ACWI iS, ACWX
2.97% Pacific ex-Japan, EPP
2.95% Sweden Index, EWD
2.94% Small Cap EAFE MSCI iS, SCZ
2.92% Emerging Markets, EEM
2.91% Financial Services DJ, IYG
2.91% Financial SPDR, XLF
2.90% China LargeCap Growth G D H USX PS, PGJ
2.85% Silver Trust iS, SLV
2.84% South Korea Index, EWY
2.81% Emerging VIPERs, VWO
2.80% EAFE Index, EFA
2.76% Energy & Nat Res iS GS, IGE
2.74% Financial DJ US, IYF
2.73% Financials VIPERs, VFH
2.68% Thailand MSCI iS, THD
2.66% Growth EAFE MSCI, EFG
2.66% Industrial SPDR, XLI
2.66% Value SmallCap S&P 600 B, IJS
2.65% China 25 iS, FXI
2.64% Growth SmallCap R 2000, IWO
2.63% Global 100, IOO
2.63% Emerging 50 BLDRS, ADRE
2.62% Growth SmallCap VIPERs, VBK
2.61% Singapore Index, EWS
2.56% Value EAFE MSCI, EFV
2.56% Technology DJ US, IYW
2.54% Value S&P 500 B, IVE
2.54% Austria Index, EWO
2.53% Materials SPDR, XLB
2.51% Info Tech VIPERs, VGT
2.50% Chile MSCI iS, ECH
2.48% Latin Am 40, ILF
2.48% Small Cap VIPERs, VB
2.47% Value MidCap S&P 400 B, IJJ
2.47% SmallCap Russell 2000, IWM
2.47% Value 1000 Russell, IWD
2.44% Basic Materials DJ US, IYM
2.44% Turkey MSCI iS, TUR
2.43% Value SmallCap VIPERS, VBR
2.42% SmallCap S&P 600, IJR
2.42% South Africa Index, EZA
2.41% Brazil Index, EWZ
2.39% LargeCap Blend S&P=Weight R, RSP
2.38% Water Resources, PHO
2.37% Taiwan Index, EWT
2.35% Growth MidCap Russell, IWP
2.35% DIAMONDS (DJIA), DIA
2.35% Microcap Russell, IWC
2.34% S&P 500 iS LargeCap Blend, IVV
2.33% Blend Total Market VIPERs, VTI
2.33% Value SmallCap Russell 2000, IWN
2.32% LargeCap Blend S&P 100, OEF
2.31% Metals & Mining SPDR, XME
2.30% Canada Index, EWC
2.30% Value MidCap Russell, IWS
2.30% LargeCap Blend Russell 3000, IWV
2.29% Realty Cohen & Steers, ICF
2.29% QQQ Nasdaq 100 Trust, QQQ
2.29% LargeCap VIPERs, VV
2.29% Technology SPDR, XLK
2.28% Growth 1000 Russell, IWF
2.27% Value VIPERs, VTV
2.27% MidCap Russell, IWR
2.26% Growth VIPERs, VUG
2.26% LargeCap 1000 R, IWB
2.25% S&P 500 SPDRs LargeCap Blend, SPY
2.24% Dividend International, PID
2.23% Growth BARRA Small Cap 600, IJT
2.23% Hong Kong Index, EWH
2.22% REIT VIPERs, VNQ
2.20% Dividend Appreciation Vipers, VIG
2.17% Consumer Discretionary SPDR, XLY
2.17% MidCap S&P 400 iS, IJH
2.16% Pacific VIPERs, VPL
2.15% MidCap S&P 400 SPDRs, MDY
2.15% WilderHill Clean Energy PS, PBW
2.14% Real Estate US DJ, IYR
2.13% Growth S&P 500/BARRA, IVW
2.11% REIT Wilshire, RWR
2.07% Dividend SPDR, SDY
2.06% Value LargeCap Dynamic PS, PWV
2.01% Malaysia Index, EWM
1.95% Homebuilders SPDR, XHB
1.92% Growth MidCap 400 B, IJK
1.86% Commodity Tracking, DBC
1.77% Telecom DJ US, IYZ
1.77% Dividend High Yield Equity PS, PEY
1.67% Mexico Index, EWW
1.65% Dividend DJ Select, DVY
1.59% Biotech SPDR, XBI
1.58% Japan Index, EWJ
1.56% Health Care SPDR, XLV
1.54% Oil Fund PowerShares, DBO
1.51% Agriculture DB PS, DBA
1.39% Utilities SPDR, XLU
1.35% Consumer Staples SPDR, XLP
1.23% Utilities VIPERs, VPU
1.23% Oil, Crude, U.S. Oil Fund, USO
1.16% Bond EmrgMkt JPM iS, EMB
1.07% Bond, High-Yield Corporate, HYG
0.87% Bond, High-Yield Junk, JNK
0.79% Frontier Markets Guggenheim , FRN
0.71% Bond Ex-US Treas, BWX
0.51% Financial Preferred, PGF
0.47% Preferred Stock iS, PFF
0.04% Gold Shares S.T., GLD
0.00% Bond Treasury Short-Term iS, SHV
-0.04% Bond, 1-3 Year Treasury, SHY
-0.05% Bond Muni ATM-Free S&P iS, MUB
-0.29% Bond, Corp, LQD
-0.30% Bond, Aggregate, AGG
-0.47% Bond, TIPS, TIP
-0.66% Bond, 10 Year Treasury, IEF
-2.00% Bond, 20+ Years Treasury, TLT
-2.29% Bear, Short S&P 500, SH
