S&P 500 Composite (SPX, 1,295.52) rose 17.16 points or 1.34% on Tuesday 6/21/11. SPX closed above the highs of the previous 9 trading days, suggesting a minor bounce. SPX fell below 3-month lows last Thursday, however, confirming a more significant downtrend. Relatively small counter trend bounces are normal but do not change the clear intermediate-term downtrend.
Volume on the NYSE rose 14% above Monday’s very slow pace but was still 12% below the 200-day SMA. This suggests that the price bounce failed to attract a strong and convincing following.
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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
1.42% , EWK , Belgium Index, EWK
2.52% , SWH , Software H, SWH
2.73% , PWO , OTC Dynamic PS, PWO
2.48% , RFG , Growth MidCap S&P 400, RFG
2.43% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
2.06% , IJT , Growth BARRA Small Cap 600, IJT
1.48% , IYZ , Telecom DJ US, IYZ
2.75% , PSJ , Software, PSJ
1.86% , IWZ , Growth LargeCap Russell 3000, IWZ
1.97% , JKE , Growth LargeCap iS M, JKE
2.17% , IJK , Growth MidCap 400 B, IJK
6.42% , TLAB , TELLABS
1.77% , JKG , MidCap Blend Core iS M, JKG
3.40% , PXQ , Networking, PXQ
2.20% , MI , MARSHAL & ILSLEY
5.11% , FMCN , Focus Media, FMCN
2.11% , IWP , Growth MidCap Russell, IWP
1.65% , PBW , WilderHill Clean Energy PS, PBW
2.06% , VRSN , VeriSign Inc
1.33% , PBJ , Food & Beverage, PBJ
2.39% , EWO , Austria Index, EWO
4.52% , LBTYA , Liberty Global Inc. (LBTYA)
6.11% , CTSH , Cognizant Technology Solutions
2.53% , ROK , ROCKWELL AUTOMAT
2.98% , XRAY , DENTSPLY International Inc
1.00% , JKD , LargeCap Blend Core iS M, JKD
0.20% , UTH , Utilities H, UTH
2.18% , IIH , Internet Infrastructure H, IIH
0.95% , PUI , Utilities, PUI
1.60% , RSP , LargeCap Blend S&P=Weight R, RSP
2.56% , EZA , South Africa Index, EZA
5.25% , SIL , Silver Miners Global X, SIL
1.49% , IVW , Growth S&P 500/BARRA, IVW
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-4.21% , WAG , WALGREEN
-2.19% , PSQ , Short 100% QQQ, PSQ
-3.86% , MZZ , Short 200% MidCap 400 PS, MZZ
-1.45% , GLW , CORNING
-1.44% , SH , Short 100% S&P 500, SH
-1.34% , PG , PROCTER & GAMBLE
-0.84% , IXJ , Healthcare Global, IXJ
-2.67% , SDS , Short 200% S&P 500 PS, SDS
-4.24% , QID , Short 200% QQQ PS, QID
-0.72% , FDL , Dividend Leaders, FDL
-0.72% , BA , BOEING
-0.84% , DOG , Short 100% Dow 30, DOG
-0.28% , SRE , SEMPRA ENERGY
-0.46% , ILF , Latin Am 40, ILF
-0.50% , GILD , Gilead Sciences Inc
-0.08% , WPO , Washington Post
-0.44% , TLT , Bond, 20+ Years Treasury, TLT
-0.31% , AET , AETNA
-0.48% , AMGN , AMGEN
-0.12% , FXI , China 25 iS, FXI
-1.49% , PM , Philip Morris, PM
-0.11% , IOO , Global 100, IOO
-0.13% , IEF , Bond, 10 Year Treasury, IEF
-0.10% , XLP , Consumer Staples SPDR, XLP
-0.35% , SO , SOUTHERN
-0.27% , PGN , PROGRESS ENERGY
-0.12% , STI , SUNTRUST BANKS
-0.11% , ED , CON ED
-0.22% , DPS , Dr Pepper Snapple Group
-0.03% , CPB , CAMPBELL SOUP
-0.09% , SPG , SIMON PROP GRP
-0.07% , PEP , PEPSICO
-0.28% , PSTL , Steel Global PS ETF, PSTL
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9 major U.S. stock sectors ranked in order of long-term relative strength — Now available by subscription:
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) has been trading with a bearish bias since peaking on 10/14/10. The Ratio remains below the 200-day SMA, is below the 50-day SMA, and the 50-day SMA remains below the 200-day SMA. Absolute price broke down below 12-week lows on 6/16/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) has been trading with a bearish bias since peaking on 11/27/07. The Ratio remains below the 200-day SMA, and the 50-day SMA remains below the 200-day SMA. Absolute price broke down below 12-week lows on 6/16/11.
NASDAQ Composite/S&P 500 Relative Strength Ratio entered a downside correction since peaking on 1/18/11. The Ratio fell below 8-month lows on 6/20/11. Absolute price closed below 6-month closing price lows on 6/17/11. The NASDAQ Advance-Decline Line fell to a new 9-month low last week. All confirm a significant downtrend.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell further below 28-year lows on 5/26/11, again reconfirming its preexisting bearish major trend. Absolute price closed below its 12-week lows and its 200-day SMA on 6/15/11.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) broke down further below 4-month lows on 6/13/11 and has been in a downside correction since 4/5/11.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below 13-week lows on 6/13/11. Price also fell below 13-week lows.
Crude Oil nearest futures contract price broke down below the lows of the past 4 months on 6/20/11, confirming a significant downtrend. Recent data from the Commodity Futures Trading Commission showed hedge-fund and other money managers increased net long positions in Oil–which could prove to be bearish when this hot money rushes for the exits. On 5/3/11, when Crude Oil was 111.56, I wrote, “Crude Oil nearest futures contract price fell below the lows of the previous 7 trading days on 5/3/11, suggesting a short-term price pullback.” Support 87.09, 83.85, 83.55, 80.28, 80.06, 79.84, 79.25, 78.86, 73.52, 72.63, 70.76, 70.35, 69.51, 68.59, 67.15, 65.05, and 64.24. Resistance 103.39, 104.60, 105.16, 114.83, 115.27, 120.42, 130.0, and 147.27.
Gold nearest futures contract price recovered over the past 6 trading days. Gold broke down below 2-week lows on 6/13/11, however, confirming a short-term downtrend. On 6/9/11, when Gold was 1542.7, I noted that Gold “appears to have stalled out since 6/6/11. Gold’s 5-week countertrend bounce might be weakening. Reward/Risk does not appear attractive. It seems possible that Gold has finally topped out at 1577.4 after rising 132% from 681 in October, 2008.” Support: 1511.4, 1462.5, 1445.0, 1411.5, 1380.7, 1419.5, 1351.4, 1309.1, 1307.7, 1297.0, 1274.8, 1270.5, 1232.4, 1210.9, 1191.5, and 1155.6. Resistance: 1555.0, 1577.4.
Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) fell further below 27-month lows on 6/17/11. The Ratio has been falling steeply since 4/8/11 and remains bearish. GDX is offering a bearish divergence relative to GLD, and that might be taken as a warning about prospects for GLD, Gold futures, bullion, and coins.
Silver nearest futures contract price broke down below 3-week lows on 6/13/11, reconfirming a downside correction. Silver fell 35% from 49.82 on 4/25/11 to 32.3 on 5/12/11, breaking down below 10-week lows. On 5/2/11, when Silver was 46.084, I wrote, “Silver nearest futures contract price broke sharply below the lows of the previous 2 weeks. The short-term price trend has turned down. If this downtrend continues, it could have implications for inflation expectations.” Support 34.4, 32.3, 31.695, 31.61, 30.265, 29.635, 26.30, 24.98, and 22.84. Resistance: 37.86, 38.845, 39.38, 39.47, 49.82, 49.845 and 50.35.
Silver/Gold Ratio entered a steep downtrend since the peak on 4/28/11. Although the Ratio has stabilized somewhat since making a low on 5/16/11, it probably remains bearish.
Copper nearest futures contract price has been trading choppy/sideways for the past few weeks. Longer term, Copper broke down below previous 5-month lows on 5/12/11, confirming an intermediate-term correction, if not a bear market. Weakness in Copper suggests doubts about the economic outlook. Support 3.9505, 3.8535, 3.846, 3.6065, 3.3930, 3.1775, 2.9285, 2.8555, 2.8445, and 2.72. Resistance: 4.2125, 4.402, 4.533, 4.554, 4.6495, 4.6535, and 4.6575.
U.S. Treasury Bond nearest futures contract price consolidated gains after breaking out above the highs of the previous 7 months on 6/16/11–and thereby reconfirming a significant uptrend. In its favor, nearly everyone has been talking bearish on Bonds this year, so the Bond is rising up off an extreme oversold condition. Support 125.07, 123.23, 123.18, 120.20, 119.15, 117.28, 117.04, 116.26, 115.15, 114.06, 113.04, and 112.15. Resistance 127.19, 128.00 129.14, 129.27, 132.26, 133.00, 135.12, 135.19, 136.31, 137.31, and 142.31.
Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) broke further below 9-month lows on 6/16/11. Absolute price of JNK also broke down below 9-month lows on 6/16/11. Both confirm a bearish trend for JNK.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell below the lows of the previous 6 months on 6/20/11, again reconfirming a significant downtrend. TIP/IEF entered a downtrend after peaking on 4/8/11. This downtrend means that fixed-income investors prefer the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs. Inflation expectations are still waning.
The U.S. dollar nearest futures contract price fell below 3-day lows on 6/21/11, suggesting a minor pullback. USD closed above the highs of the past 3 weeks on 6/16/11, which was a bullish indication for the short-term trend. In addition, the larger trend of the USD has been firming since making the low at 73.325 on 5/2/11. Support 73.88, 73.515, 73.325, 72.86, and 70.80. Resistance 76.54, 76.87, 76.98, 77.675, 78.98, 79.34, 81.635, 81.935, 82.02, 83.64, 84.73, 85.36, 86.71, 88.80, 89.22, 89.71, and 92.53.
Advisory Service Sentiment: There were 37% Bulls versus 26% Bears as of 6/15/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. This is near normal, since the Ratio’s 20-year range is 0.41 to 3.74, the median is 1.56, and the mean is 1.64. Note that Advisory Service Sentiment as of 4/6/11 rose to 3.65, its highest level in the 8 years since the 20-year high of 3.74 set on 6/18/03. The market has been working off that excess by correcting to the downside.
VIX Fear Index rose above 3-month highs to 22.73 on 6/16/11, indicating a relatively modest uptick in fear. For comparison, there was a brief spike up to an intraday peak of 31.28 on 3/16/11. 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 Bull Market on 7/23/09, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 6 months.
As of the close on June 6, 2011, the Dow Theory confirmed a Secondary Reaction (a significant downside correction) for the general stock market, as the Dow Industrials and Transports both closed below 10-week lows. Previously, as of June 1, 2011, the Dow Theory gave a warning of a significant downside correction for the general stock market, as the Dow Industrials and Transports both closed below 5-week lows.
On 5/2/11, when the S&P 500 Composite (SPX) was 1,358.59, I warned, “The majority of major stock price indexes opened higher on gaps but reversed to close with losses on the day. This may signal exhaustion of the short-term uptrend. Sentiment indicators have been suggesting that the stock market may be over loved and overbought. And in view of the sharp reversals in the metal commodities, the so-called “inflation trade”, when speculators buy stocks and sell fixed-income instruments based on expectations of rising price levels for goods and services, may be on thin ice.”
Based on the daily SPX, momentum indicators gave bearish divergence warnings in April; that is, they never made it back to their February peaks when the price indexes rose to higher highs.
S&P 500 Composite (SPX, 1,295.52) rose 17.16 points or 1.34% on Tuesday 6/21/11.
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
1346.82, high of 5/19/11
S&P 500 Cash Index Potential Support
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
1173.00, low of 11/16/10
1171.70, low of 10/27/10
1166.74, low of 10/20/10
1159.71, low of 10/19/10
1,151.41, low of 10/7/10
1,131.87, low of 10/4/10
1122.79, low of 9/23/2010
1114.63, low of 9/15/2010
1110.88, low of 9/10/2010
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
One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
5.25% Silver Miners Global X, SIL
3.64% Metals & Mining SPDR, XME
3.42% China LargeCap Growth G D H USX PS, PGJ
3.40% Networking, IGN
3.17% Sweden Index, EWD
3.09% Basic Materials DJ US, IYM
3.00% Italy Index, EWI
2.88% Semiconductor SPDR, XSD
2.80% Spain Index, EWP
2.66% Thailand MSCI iS, THD
2.65% Germany Index, EWG
2.65% EMU Europe Index, EZU
2.61% France Index, EWQ
2.57% Materials SPDR, XLB
2.56% South Africa Index, EZA
2.54% Growth SmallCap VIPERs, VBK
2.53% Growth SmallCap R 2000, IWO
2.49% Energy & Nat Res iS GS, IGE
2.47% South Korea Index, EWY
2.44% European VIPERs, VGK
2.39% Austria Index, EWO
2.37% Canada Index, EWC
2.35% Semiconductor iS IGW, SOXX
2.30% Microcap Russell, IWC
2.20% Value EAFE MSCI, EFV
2.17% Growth MidCap 400 B, IJK
2.17% EAFE Index, EFA
2.17% SmallCap Russell 2000, IWM
2.16% Small Cap VIPERs, VB
2.15% QQQ Nasdaq 100 Trust, QQQ
2.13% Chile MSCI iS, ECH
2.11% Netherlands Index, EWN
2.11% Water Resources, PHO
2.11% Growth MidCap Russell, IWP
2.08% Info Tech VIPERs, VGT
2.07% Energy VIPERs, VDE
2.06% Growth BARRA Small Cap 600, IJT
2.05% Technology DJ US, IYW
2.05% Small Cap EAFE MSCI iS, SCZ
2.04% Consumer Discretionary SPDR, XLY
2.03% Growth EAFE MSCI, EFG
1.99% Energy SPDR, XLE
1.99% Energy DJ, IYE
1.93% MidCap S&P 400 SPDRs, MDY
1.93% Transportation Av DJ, IYT
1.90% MidCap S&P 400 iS, IJH
1.87% Singapore Index, EWS
1.87% Homebuilders SPDR, XHB
1.85% Global ex US ACWI iS, ACWX
1.84% Emerging Markets, EEM
1.83% United Kingdom Index, EWU
1.81% Value SmallCap Russell 2000, IWN
1.79% Emerging 50 BLDRS, ADRE
1.79% MidCap Russell, IWR
1.78% Australia Index, EWA
1.78% Technology SPDR, XLK
1.78% Indonesia MV, IDX
1.75% SmallCap S&P 600, IJR
1.74% Emerging VIPERs, VWO
1.74% Pacific ex-Japan, EPP
1.72% Growth VIPERs, VUG
1.70% Japan Index, EWJ
1.69% Biotech SPDR, XBI
1.68% Growth 1000 Russell, IWF
1.66% India PS, PIN
1.65% WilderHill Clean Energy PS, PBW
1.61% Value SmallCap VIPERS, VBR
1.60% LargeCap Blend S&P=Weight R, RSP
1.59% Value MidCap S&P 400 B, IJJ
1.58% Pacific VIPERs, VPL
1.57% Value SmallCap S&P 600 B, IJS
1.57% Industrial SPDR, XLI
1.55% Value MidCap Russell, IWS
1.53% Blend Total Market VIPERs, VTI
1.51% Switzerland Index, EWL
1.49% Growth S&P 500/BARRA, IVW
1.48% Taiwan Index, EWT
1.48% Telecom DJ US, IYZ
1.48% LargeCap VIPERs, VV
1.48% LargeCap Blend Russell 3000, IWV
1.48% Dividend International, PID
1.44% Capital Markets KWB ST, KCE
1.43% LargeCap 1000 R, IWB
1.42% Belgium Index, EWK
1.41% Financial SPDR, XLF
1.38% Russia MV, RSX
1.37% S&P 500 SPDRs LargeCap Blend, SPY
1.36% Financial Services DJ, IYG
1.36% Agriculture DB PS, DBA
1.33% S&P 500 iS LargeCap Blend, IVV
1.28% Financials VIPERs, VFH
1.26% Financial DJ US, IYF
1.25% India Earnings WTree, EPI
1.23% Value 1000 Russell, IWD
1.22% LargeCap Blend S&P 100, OEF
1.20% Silver Trust iS, SLV
1.18% Value LargeCap Dynamic PS, PWV
1.17% Hong Kong Index, EWH
1.15% Value S&P 500 B, IVE
1.11% Turkey MSCI iS, TUR
1.11% Value VIPERs, VTV
1.06% Mexico Index, EWW
0.93% Dividend Appreciation Vipers, VIG
0.92% Energy Global, IXC
0.88% Real Estate US DJ, IYR
0.88% Dividend DJ Select, DVY
0.87% DIAMONDS (DJIA), DIA
0.86% Malaysia Index, EWM
0.78% REIT VIPERs, VNQ
0.70% Realty Cohen & Steers, ICF
0.70% REIT Wilshire, RWR
0.70% Dividend SPDR, SDY
0.68% Bond EmrgMkt JPM iS, EMB
0.67% Brazil Index, EWZ
0.67% Bond, High-Yield Corporate, HYG
0.66% Bond, High-Yield Junk, JNK
0.63% Health Care SPDR, XLV
0.62% Financial Preferred, PGF
0.62% Frontier Markets Guggenheim , FRN
0.49% Gold Shares S.T., GLD
0.46% Dividend High Yield Equity PS, PEY
0.40% Bond Ex-US Treas, BWX
0.28% Preferred Stock iS, PFF
0.27% Bond Muni ATM-Free S&P iS, MUB
0.25% Bond, TIPS, TIP
0.19% Oil, Crude, U.S. Oil Fund, USO
0.18% Utilities VIPERs, VPU
0.11% Oil Fund PowerShares, DBO
0.10% Europe 350 S&P Index, IEV
0.09% Bond, Aggregate, AGG
0.07% Commodity Tracking, DBC
0.06% Utilities SPDR, XLU
0.01% Bond, 1-3 Year Treasury, SHY
0.01% Bond Treasury Short-Term iS, SHV
-0.03% Bond, Corp, LQD
-0.10% Consumer Staples SPDR, XLP
-0.11% Global 100, IOO
-0.12% China 25 iS, FXI
-0.13% Bond, 10 Year Treasury, IEF
-0.44% Bond, 20+ Years Treasury, TLT
-0.46% Latin Am 40, ILF
