Falling volume as stock prices rise may indicate diminishing power behind a price trend, which can suggest a price reversal ahead.
U.S. dollar ETF (UUP) price whipsawed back down below its 50-day SMA on 2/7/14, thereby turning systematically bearish (from neutral).
Consumer Staples stock sector ETF (XLP) Relative Strength Ratio (XLP/SPY) broke down below its lows of the previous 2 years on 2/7/14, thereby reconfirming its major downtrend.
Industrial stock sector ETF (XLI) Relative Strength Ratio (XLI/SPY) whipsawed back up above its 50-day SMA on 2/7/14, thereby turning systematically bullish (from neutral).
Materials stock sector ETF (XLB) Relative Strength Ratio (XLB/SPY) whipsawed back up above its 50-day SMA on 2/7/14, thereby turning systematically bullish (from neutral).
Technology stock sector ETF (XLK) absolute price whipsawed back up above its 50-day SMA on 2/7/14, thereby turning systematically bullish (from neutral).
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) rose to a 22-month high on 2/7/14 and has remained systematically bullish since 11/26/13. Absolute price of QQQ whipsawed back up above its 50-day SMA on 2/7/14, thereby turning systematically bullish (from neutral).
The S&P 500 Composite Index (SPX: 1,797.02, up 1.33%) absolute price gapped higher on the open and worked upward most of the day into a strong close. SPX closed above the open, above the midpoint of the day’s high-low range, and above the closing prices of the previous 10 trading days, suggesting a minor rally attempt.
The S&P 500 absolute price remains systematically neutral: SPX crossed below its 50-day SMA on 1/24/14. It closed below its closing prices of the previous 15 weeks on 2/3/14, suggesting a medium-term downside correction.
NYSE total volume fell 2% to a level 7% above its 200-day SMA. Generally, rising volume confirms the direction (up or down) of a price move, but falling volume may indicate diminishing power behind a price trend, which can suggest a price reversal ahead.
The Number of Daily Net New Highs on the NYSE (New Highs minus New Lows) rose to 77, which is an improvement from the negative numbers recorded over the past 2 weeks. Negative readings meant that there were more New Lows than New Highs, and that indicated a bearish trend. This indicator gave early warning of a downside reversal: the year-to-date high of 439 set on Wednesday 1/15/14 was far below peaks above 800 in 2013, thereby diverging bearishly compared to a new high for the S&P 500 large-capitalization stock price index as of 1/15/14.
Momentum oscillators RSI and MACD fell persistently from 12/31/13 to their lowest levels in 14 months on 2/3/14, thereby indicating bearish momentum and bearish divergence relative to the S&P 500. In addition, both oscillators gave early warning of downside risk by demonstrating weakness relative to the S&P 500 price index itself for many months. Both failed to rise above their highs of 2013 as the S&P 500 price rose to a higher closing price high on 1/15/14.
Momentum divergences, persistently low trading volume on up days, and excessive bullish sentiment remain challenges to a sustainable upside trend. On the other hand, the bullish case appears to rest primarily on continuation of central banks’ highly-accommodative monetary policies and hopes for faster economic recovery.
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Stock Market Indicators
The Dow Theory reconfirmed a Primary Tide Bull Market on 12/31/13 when the Dow-Jones Industrial Average and the Dow-Jones Transportation Average both closed at new closing price highs. The Averages have been diverging since 12/31/13, however, suggesting that all the parts of the stock market may not be in gear and pulling together in the same direction.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) rose to a 22-month high on 2/7/14 and has remained systematically bullish since 11/26/13. Absolute price of QQQ whipsawed back up above its 50-day SMA on 2/7/14, thereby turning systematically bullish (from neutral).
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 6 years on 2/3/14, thereby reconfirming its preexisting long-term downtrend. BKF/SPY turned systematically bearish (from neutral) on 10/31/13 by crossing below its 50-day SMA. The 50-day SMA remains below the 200-day SMA. BKF/SPY has underperformed since it peaked on 10/14/2010. Absolute price of BKF fell below its lows of the previous 7 months on 2/3/14, thereby reconfirming its preexisting downtrend. Price peaked at 42.29 on 2/1/13, fell to a 20-month low at 32.62 on 6/24/13, and remains stuck in that trading range.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below its lows of the previous 6 years on 1/30/14, thereby confirming its preexisting long-term downtrend. EEM/SPY turned systematically bearish (from neutral) on 10/31/13 by crossing below its 50-day SMA. Long term, EEM/SPY has underperformed since the ratio peaked on 10/14/2010. Absolute price of EEM fell below its lows of the previous 7 months on 2/3/14, thereby reconfirming its preexisting downtrend. Price peaked at 45.34 on 1/2/13, fell to a 19-month low of 36.16 on 6/24/13, and remains stuck in that trading range.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below its lowest levels of the previous 5 months on 12/18/13, thereby reconfirming its preexisting major downtrend. For nearly 6 years, from 11/27/07 to 7/9/13, EFA/SPY substantially underperformed, and that secular downtrend may still be in effect.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) turned systematically bearish (from neutral) on 1/7/14 by crossing below its 50-day SMA. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative stability and safety of large size. On the other hand, Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors seek greater potential returns in more volatile, smaller stocks.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) crossed below its 50-day SMA on 2/3/14, thereby turning systematically neutral (from bullish). Absolute price crossed below its 50-day SMA on 1/27/14, thereby turning systematically neutral (from bullish).
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) has remained systematically neutral most of the time since the ratio peaked on 10/3/13. Absolute price crossed below its 50-day SMA on 1/24/14, thereby turning systematically neutral (from bullish).
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price whipsawed back down below its 50-day SMA on 2/7/14, thereby turning systematically bearish (from neutral). UUP has whipsawed between systematically neutral and bearish since 9/12/13, when the 50-day SMA crossed down below the 200-day SMA. Longer term, UUP has been consolidating secular trend losses since bottoming at 20.84 on 5/4/11. Support 21.32, 21.07, and 20.84. Resistance 21.96, 22.34, 22.98, 23.14, 23.52, 25.84, 27.19, and 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price rose above its 50-day SMA on 1/31/14, thereby turning systematically neutral (from bearish). Longer term, the 50-day SMA remains in a weak position below the 200-day SMA. DBA has been in a cyclical bear market for nearly 3 years, from a peak at 35.58 on 3/4/11 to a low of 24.04 on 1/22/14.
Crude Oil, United States Oil ETF (USO) price whipsawed back above its 50-day SMA on 1/28/14, thereby turning systematically neutral (from bearish). Longer term, the 50-day SMA remains in a weak position below the 200-day SMA. Support 34.00, 32.53, 32.12, 30.79, 29.02, 26.28, and 22.74. Resistance 36.07, 37.59, 39.54, 39.64, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) price turned systematically neutral (from bearish) on 1/23/14 when it crossed above its 50-day SMA. Longer term, the 50-day SMA remains in a weak position below the 200-day SMA. Support: 114.46, 113.08, and 102.28. Resistance: 131.44, 137.62, 143.43, 149.44, 153.85, 156.80, 164.40, 166.94, 170.01, 174.07, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) turned systematically neutral (from bearish) on 1/13/14 when it crossed above its 50-day SMA. The 50-day SMA remains in a weak position below the 200-day SMA. Previously, GDX/GLD fell below its lows of the previous 7 years on 12/23/13, thereby reconfirming its preexisting major long-term downtrend. GDX/GLD has stayed systematically bearish most of the time since absolute price peaked at 66.98 on 9/9/11.
Silver, iShares Silver Trust ETF (SLV) price turned systematically neutral (from bearish) on 2/5/14 when it crossed above its 50-day SMA. Longer term, the 50-day SMA remains in a weak position below the 200-day SMA.SLV has traded in a range between 18.26 and 19.69 since November. Support 18.26, 17.75, 16.73, 14.37, 12.27, 11.64, and 8.45. Resistance: 19.84, 22.23, 23.84, 25.34, 27.14, 27.35, 28.50, 28.61, 29.73, 31.41, 32.72, 33.31, 34.08, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) turned systematically bearish (from neutral) on 1/21/14 when it crossed below its 50-day SMA. Longer term, SLV underperformed GLD substantially for 27 months from 4/28/11 to 7/30/13, but the trend has turned uncertain since 7/30/13.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price appears to have entered into a neutral trading range since making a low on 6/24/13. Longer term, JJC price was in a persistent downtrend for more than 27 months from its peak of 61.69 on 2/14/11 to its low of 36.87 on 6/24/13. “Dr. Copper” is widely accepted as one of the better indicators of investor confidence (or lack thereof) in the global industrial economy.
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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 later revealed to be deal stocks 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
2.30% , EPU , Peru MSCI iS, EPU
8.68% , NWSA , News Corporation, NWSA
1.29% , VIA.O , VIACOM INC. (New)
4.23% , MCO , MOODYS CORP
0.85% , IGN , Networking, IGN
5.41% , NFLX , Netflix, NFLX
3.54% , BRCM , BROADCOM STK A
3.11% , LLL , L-3 COMMS HLDGS
1.31% , IWV , LargeCap Blend Russell 3000, IWV
2.39% , PLL , PALL
2.12% , USO , Oil, Crude, U.S. Oil Fund, USO
1.72% , DBO , Oil Fund PowerShares, DBO
2.48% , STJ , ST JUDE MEDICAL
2.94% , CTAS , CINTAS
3.50% , STT , STATE STREET
3.84% , PH , PARKER HANNIFIN
2.65% , SVU , SUPERVALU
2.85% , MAS , MASCO
2.48% , TROW , T ROWE PRICE GP
5.77% , GPS , GAP
2.58% , ETFC , E*TRADE FINANCIAL
1.92% , PWB , Lg Cap Growth PSD, PWB
2.14% , CPWR , COMPUWARE
3.39% , MHFI.K , McGraw Hill Financial, Inc., MHFI.K
2.22% , HON , HONEYWELL INTL
1.47% , IWZ , Growth LargeCap Russell 3000, IWZ
2.50% , SNI , Scripps Networks Interactive
2.15% , PKI , PERKINELMER
1.28% , IWR , MidCap Russell, IWR
2.51% , ADBE , ADOBE SYS
4.77% , AON , AON
1.66% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
1.81% , RPG , Growth S&P 500, RPG
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Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-9.25% , CI , CIGNA
-8.32% , NCR , NCR
-2.82% , WYN , Wyndham Worldwide
-1.89% , MZZ , Short 200% MidCap 400 PS, MZZ
-3.57% , QID , Short 200% QQQ PS, QID
-2.19% , WLP , WELLPOINT HEALTH
-1.30% , LH , LAB CRP OF AMER
-2.66% , SDS , Short 200% S&P 500 PS, SDS
-1.37% , SH , Short 100% S&P 500, SH
-1.82% , PSQ , Short 100% QQQ, PSQ
-1.09% , LOW , LOWES
-1.64% , PHM , PULTE HOMES
-0.27% , PAYX , PAYCHEX
-1.71% , AET , AETNA
-0.22% , HSY , HERSHEY FOODS
-2.13% , DXD , Short 200% Dow 30 PS, DXD
-0.71% , HUM , HUMANA
-0.13% , CMA , COMERICA
-0.03% , DUK , DUKE ENERGY
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
5.65% , Biotech SPDR, XBI
2.81% , China LargeCap Growth G D H USX PS, PGJ
2.12% , Oil, Crude, U.S. Oil Fund, USO
2.07% , WilderHill Clean Energy PS, PBW
1.89% , Spain Index, EWP
1.79% , Semiconductor SPDR, XSD
1.78% , QQQ Nasdaq 100 Trust, QQQ
1.73% , Industrial SPDR, XLI
1.72% , Oil Fund PowerShares, DBO
1.71% , Health Care SPDR, XLV
1.71% , Austria Index, EWO
1.63% , Switzerland Index, EWL
1.60% , Japan Index, EWJ
1.58% , Semiconductor iS IGW, SOXX
1.57% , France Index, EWQ
1.54% , LargeCap Growth S&P 500 iS, IVW
1.51% , SmallCap Growth Russell 2000 iS, IWO
1.51% , Growth VIPERs, VUG
1.46% , Technology DJ US, IYW
1.45% , Capital Markets KWB ST, KCE
1.44% , LargeCap Growth Russell 1000 iS, IWF
1.42% , Water Resources, PHO
1.38% , Materials SPDR, XLB
1.38% , Info Tech VIPERs, VGT
1.37% , Dividend Appreciation Vipers, VIG
1.36% , Technology SPDR, XLK
1.33% , Financial DJ US, IYF
1.33% , EMU Europe Index, EZU
1.32% , Italy Index, EWI
1.31% , LargeCap Blend Russell 3000 iS, IWV
1.31% , LargeCap VIPERs, VV
1.31% , MidCap Growth S&P 400 iS, IJK
1.31% , Growth SmallCap VIPERs, VBK
1.31% , Foreign LargeCap EAFE MSCI iS, EFA
1.31% , LargeCap Blend S&P 500 iS, IVV
1.30% , Value EAFE MSCI, EFV
1.29% , Growth MidCap Russell, IWP
1.29% , Blend Total Market VIPERs, VTI
1.29% , LargeCap Blend Russell 1000 iS, IWB
1.28% , European VIPERs, VGK
1.28% , MidCap Russell, IWR
1.26% , LargeCap Blend S&P 100, OEF
1.24% , Europe 350 S&P Index, IEV
1.24% , S&P 500 SPDRs LargeCap Blend, SPY
1.24% , Indonesia MV, IDX
1.24% , Financial SPDR, XLF
1.23% , LargeCap Blend S&P=Weight R, RSP
1.23% , Value VIPERs, VTV
1.23% , Consumer Discretionary SPDR, XLY
1.23% , Frontier Markets Guggenheim , FRN
1.22% , Global 100, IOO
1.20% , Pacific VIPERs, VPL
1.17% , Basic Materials DJ US, IYM
1.17% , Dividend U.S. DJ iS, DVY
1.17% , Dividend SPDR, SDY
1.16% , Germany Index, EWG
1.16% , Energy & Nat Res iS GS, IGE
1.16% , Global LargeCap Blend MSCI iS, ACWI
1.16% , Microcap Russell, IWC
1.15% , Commodity Tracking, DBC
1.14% , SmallCap Blend EAFE MSCI iS, SCZ
1.13% , Metals & Mining SPDR, XME
1.13% , SmallCap Blend Russell 2000 iS, IWM
1.13% , Global ex U.S. LargeCap Blend, ACWX
1.12% , Growth EAFE MSCI, EFG
1.11% , Value LargeCap Dynamic PS, PWV
1.09% , LargeCap Value Russell 1000 iS, IWD
1.09% , Financial Services DJ, IYG
1.08% , Energy DJ, IYE
1.08% , Energy SPDR, XLE
1.05% , LargeCap Value S&P 500 iS, IVE
1.05% , DIAMONDS (DJIA), DIA
1.05% , Energy VIPERs, VDE
1.03% , Small Cap VIPERs, VB
1.01% , MidCap Blend S&P 400 iS, IJH
1.01% , Dividend ex-U.S. DJ iS, IDV
1.00% , Financials VIPERs, VFH
0.99% , Telecom DJ US, IYZ
0.97% , Dividend High Yield Equity PS, PEY
0.97% , Dividend International, PID
0.95% , Belgium Index, EWK
0.95% , United Kingdom Index, EWU
0.95% , SmallCap Growth S&P 600 iS, IJT
0.94% , Consumer Staples SPDR, XLP
0.93% , Value MidCap Russell, IWS
0.93% , Value SmallCap VIPERS, VBR
0.92% , MidCap S&P 400 SPDRs, MDY
0.90% , MidCap Value S&P 400 iS, IJJ
0.90% , Singapore Index, EWS
0.89% , Energy Global, IXC
0.85% , Networking, IGN
0.84% , Emerging 50 BLDRS, ADRE
0.83% , South Africa Index, EZA
0.82% , Homebuilders SPDR, XHB
0.81% , Sweden Index, EWD
0.81% , REIT Wilshire, RWR
0.77% , Gold Shares S.T., GLD
0.76% , Netherlands Index, EWN
0.76% , REIT VIPERs, VNQ
0.75% , Transportation Av DJ, IYT
0.75% , Canada Index, EWC
0.74% , Taiwan Index, EWT
0.72% , Australia Index, EWA
0.70% , Realty Cohen & Steers, ICF
0.69% , Brazil Index, EWZ
0.69% , SmallCap Blend S&P 600 iS, IJR
0.67% , Real Estate US DJ iS, IYR
0.65% , Utilities VIPERs, VPU
0.65% , SmallCap Value Russell 2000 iS, IWN
0.62% , Bond, Emerging Mkt JPM iS, EMB
0.60% , Pacific ex-Japan, EPP
0.59% , Mexico Index, EWW
0.59% , Latin Am 40, ILF
0.57% , Emerging Markets MSCI iS, EEM
0.54% , Utilities SPDR, XLU
0.52% , Silver Trust iS, SLV
0.51% , South Korea Index, EWY
0.51% , Bond, High Yield Corp iBoxx iS, HYG
0.50% , SmallCap Value S&P 600 iS, IJS
0.48% , Agriculture DB PS, DBA
0.44% , Bond, High-Yield Junk, JNK
0.43% , India Earnings WTree, EPI
0.43% , Russia MV, RSX
0.41% , Chile MSCI iS, ECH
0.39% , Emerging VIPERs, VWO
0.38% , China 25 iS, FXI
0.37% , Hong Kong Index, EWH
0.36% , Bond Ex-US Treas, BWX
0.33% , Malaysia Index, EWM
0.31% , Bond, Long-Term Corp iBoxx iS, LQD
0.29% , Bond, TIPS U.S. Treasury iS, TIP
0.27% , Bond, 10 Year Treasury, IEF
0.23% , Bond, Muni S&P ATM-Free iS, MUB
0.21% , Preferred Stock iS, PFF
0.16% , Bond, Intermediate US Aggregate iS, AGG
0.08% , Bond, 20+ Years Treasury, TLT
0.06% , Financial Preferred, PGF
0.02% , Bond, 1-3 Year Treasury, SHY
-0.01% , Bond Treasury Short-Term iS, SHV
-0.23% , Turkey MSCI iS, TUR
-0.30% , India PS, PIN
-0.88% , Thailand MSCI iS, THD
-1.37% , Bear, Short S&P 500, SH
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The S&P 500 Composite Potential Resistance
1850.84, low of 1/15/2014
1815.52, low of 1/13/2014
1813.55, high of 11/29/2013
1809.35, 50-day SMA
The S&P 500 Composite Potential Support
1737.92, low of 2/5/2014
1729.86, high of 9/19/2013
1711.57, high of 10/15/2013
1711.45, 200-day SMA
1709.67, high of 8/2/2013
1703.85, high of 9/26/2013
1700.18, high of 8/8/2013
1698.78, high of 7/23/2013
1696.81, high of 8/13/2013
1696.55, high of 10/1/2013
1695.93, low of 10/15/2013
1687.18, high of 5/22/2013
1687.11, low of 9/27/2013
1676.03, low of 7/26/2013
1674.99, low of 9/30/2013
1672.40, high of 9/9/2013
1671.84, low of 7/16/2013
1670.36, low of 10/3/2013
1669.51, high of 8/26/2013
1654.19, high of 6/18/2013
1654.18, high of 7/9/2013
1652.61, low of 8/16/2013
1646.47, low of 10/9/2013
1629.05, low of 8/27/2013
1560.33, low of 6/24/2013
1536.03, low of 4/18/2013
1530.94, high of 2/19/2013
1485.01, low of 2/26/2013
1474.51, high of 9/14/2012
1451.64, low on 1/8/2013
1448.00, high of 12/19/2012
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1438.59, high of 12/12/2012
1434.27, high of 11/2/2012
1432.82, low of 12/20/2012
1430.53, low of 9/26/2012
1426.76, low of 12/12/2012
1425.53, low of 10/12/2012
1423.73, high of 12/3/2012
1422.58, low of 12/21/2012
1422.38, high of 4/2/2012
1422.06, low of 10/22/2012
1421.12, high of 10/25/2012
1420.34, high of 12/7/2012
1419.70, high of 11/29/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
1409.16, high of 11/23/2012
1403.28, low of 10/26/12
1401.58, low of 12/28/12
1398.11, low of 12/31/2012
1397.68, low of 11/26/2012
1396.56, low of 9/4/2012
1391.04, low of 8/6/2012
1388.71, low of 5/3/2012
1385.43, low of 11/28/2012
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1357.38, low of 4/10/2012
1343.35, low of 11/16/2012
1340.03, low of 3/6/2012
1335.52, high of 6/11/2012
1334.93, high of 5/31/2012
1329.24, low of 7/24/2012
1329.05, high of 6/7/2012
1328.49, high of 5/22/2012
1325.41, low of 7/12/2012
1306.62, low of 6/12/2012
1291.98, low of 5/18/2012
1266.74, low of 6/4/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1244.80, low of 12/7/2011
1239.73, low of 12/1/2011
1234.81, low of 11/3/2011
1231.04, high of 12/16/2011
1226.64, low of 11/9/2011
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1202.37, low of 12/19/2011
1158.66, low of 11/25/2011
1074.77, low of 10/4/2011
1010.91, low of 7/1/2010
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
