The S&P 500 Composite (SPX, 1,198.62) rose 33.38 points or 2.86% on Wednesday, September 7, 2011. SPX rose above the previous day’s high, suggesting a minor short-term recovery attempt within a longer-term downtrend.
NYSE trading volume declined, raising doubts about the power of Wednesday’s price advance.
SPX recovered a bit more than a 61.8% Fibonacci fraction of its losses from the intraday extreme high of 1230.71 set on 8/31/11.
Longer-term, SPX fell below 11-month lows on 8/9/11 and remains bearishly below falling 50- and 200-day SMAs.
Minor reversals lure short-term traders into trying to trade a bounce. Minor price corrections against the trend are normal and expected, of course. But playing minor counter trend bounces is risky. The mood can switch from “risk on” to “risk off” overnight, leaving the too-clever trader suddenly holding the bag.
We keep in mind that the dominant trend for the stock market remains persistently bearish. That is the bias. In a bear market, surprises come to the downside.
Typically, there is no safe place to hide in a Dow Theory Primary Tide Bear Market. Even those stocks that have held up relatively well through most of the Bear Market eventually succumb to the relentless tide of selling.
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Includes Top Ten ETFs and Major Trend Relative Strength Rankings.
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Stock Market Indicators
NASDAQ Composite/S&P 500 Relative Strength Ratio whipsawed back above its 50-day SMA on 9/6/11. Absolute price fell further below 50- and 200-day SMAs on 9/6/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) remains bearish. The EEM/SPY Ratio has been in a downtrend since peaking on 10/14/10. EEM/SPY broke down below 6-month lows on 8/25/11, remains below its 50- and 200-day SMAs, and the 50-day SMA remains below the 200-day SMA. Absolute price has been weak since 5/2/11, broke down below 13-month lows on 8/8/11 , and remains below falling 50- and 200-day SMAs.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) remains bearish. The EFA/SPY Ratio broke down below 6-year lows on 9/6/11. Absolute price has been weak since 5/2/11 and broke down below 12-month lows on 9/6/11. Both the EFA/SPY Ratio and the EFA price remain below falling 50- and 200-day SMAs.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below the lows of the previous 5 weeks on 9/7/11, confirming a minor downtrend. Longer term, OEX/SPX fell below 28-year lows on 5/26/11, confirming a bearish major trend.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) remains bearish for the major trend. IWM/SPY fell below 11-month lows on 8/22/11, remains below its 50- and 200-day SMAs, and the 50-day SMA remains below the 200-day SMA. Absolute price has been weak since 5/2/11, broke down below 13-month lows on 8/8/11, and remains below falling 50- and 200-day SMAs.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) remains bearish for the major trend. MDY/SPY fell below 11-month lows on 8/8/11, confirming a bearish major trend. Both the MDY/SPY Ratio and the MDY price remain below 50- and 200-day SMAs.
Advisory Service Sentiment: There were 38.7% Bulls versus 37.6% Bears as of 9/7/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio was 1.03, down from 1.12 the previous week. The 20-year median is 1.56 and the mean is 1.64.
VIX Fear Index rose to 37.00 on 9/6/11, up from 30.16 on 8/31/11. VIX hit 48.00 on 8/8/11, its highest level in 14 months, since 5/21/10. It could be possible for VIX to rise much higher: VIX was 89.53 on 10/24/08 during the financial crisis. Options players tend to grow more fearful as stock prices decline, and the trend of stock prices is down. 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 Bear Market on 8/2/11, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed below their closing price lows of June, 2011.
The S&P 500 Composite (SPX, 1,198.62) rose 33.38 points or 2.86% on Wednesday, September 7, 2011.
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
1370.58, high of 5/2/11
1359.44, high of 5/10/11
1356.48, high of 7/7/11
1347.00, high of 7/21/11
1258.07, low of 6/16/11
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
1234.56, low of 8/3/11
1232.85, low of 12/16/10
1228.74, Fibonacci 61.8% of 2007-2009 range
1230.71, high of 8/31/11
S&P 500 Cash Index Potential Support
1140.13, low of 9/6/2010
1101.54, low of 8/9/2010
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
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Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) rose above the highs of the previous 2 years on 9/6/11, confirming a major uptrend. Although minor price consolidations and corrections are to be expected in bullish price trends, the dominant trend remains bullish. Support 112.58, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 116.92, and 123.15.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) remains bearish. JNK/LQD fell below 2-year lows on 8/10/11.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below 11-month lows on 9/6/11. TIP/IEF has been weak since peaking on 4/8/11 and remains below 3 key SMAs, of 20, 50, and 200 days. This means fixed-income investors have been choosing the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs. Fixed-income investors are not worried about inflation.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) rose above the highs of the previous 7 weeks and rose above its 50-day SMA on 9/6/11. The trend has been choppy/sideways since the low of 20.84 on 5/4/11. Support 21.24 and 20.84. Resistance 21.74, 21.86, and 22.21.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price fell below the lows of the previous 6 trading days on 9/6/11, suggesting a minor downtrend. On 8/9/11, DBA traded below 8-month lows, confirming a long-term downtrend.
Crude Oil, United States Oil ETF (USO) price rose to the upper end of its recent trading range on 9/7/11. Oil fell below the lows of the previous 2 years on 8/9/11, confirming a major downtrend. Support 32.60, 31.45, 30.31, 26.28, 22.74. Resistance 34.89, 35.14, 39.25, 40.74, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) fell below the lows of the previous 5 days on 9/7/11. Gold rose above all-time highs intraday on 9/6/11 but reversed to close lower on the day, possibly suggesting a minor correction. Although minor price consolidations and corrections are to be expected in any trend, the dominant trend remains persistently bullish. In a world of too much debt, weak currencies, and self-serving politicians running amok, investors around the globe seek the safety of gold as the only forever-true money. Support: 165.88, 159.68, 156.11, 154.10, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: 185.85.
Gold Mining Stocks ETF/ Gold Shares ETF Relative Strength Ratio (GDX/GLD) rose above 5-week highs on 9/7/11, confirming a minor rally attempt for the short term. GDX/GLD fell below 29-month lows on 8/8/11, confirming a bearish major trend for the long term. Absolute price of GDX is bullish, just not as bullish as GLD; investors prefer Gold over Gold Miners.
Silver, iShares Silver Trust ETF (SLV) price fell below the lows of the previous 5 days on 9/76/11, possibly suggesting a minor price pullback. Silver rose above 3-month highs on 8/22/11, confirming a medium-term price uptrend. Support 38.05, 36.04, 35.29, 34.02, and 31.97. Resistance: 42.78, 44.71 and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) has been mostly weak since peaking on 4/28/11. This means investors prefer Gold over Silver.
Copper, iPath DJ-UBS Copper TR Sub-Idx ETN (JJC ) fell further below 50- and 200-day SMAs on 9/6 /11 and fell below the lows of the previous 8 months on 8/10/11. Weakness in Copper suggests doubts about the economic outlook, while strength in Copper suggests confidence. Support 51.30, 50.59, and 49.00. Resistance: 54.94, 56.64, 57.48, 59.06, 60.04, and 61.69.
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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
25.76% , MTG , MGIC INVESTMENT
5.27% , PIC , Insurance, PIC
4.10% , XSD , Semiconductor SPDR, XSD
14.47% , ODP , OFFICE DEPOT
4.35% , NY , Value LargeCap NYSE 100 iS, NY
3.31% , PWC , LargeCap Blend Dynamic PS, PWC
8.12% , NVDA , NVIDIA
5.11% , PKB , Building & Construction, PKB
2.57% , PBJ , Food & Beverage, PBJ
4.25% , SOXX , Semiconductor iS IGW, SOXX
3.34% , IGE , Energy & Nat Res iS GS, IGE
2.65% , PIV , Value Line Timeliness MidCap Gr, PIV
3.02% , ERTS , ELECTRONIC ARTS
6.71% , LNCR , Lincare Holdings Inc
3.31% , VIS , Industrials VIPERs, VIS
2.74% , IWZ , Growth LargeCap Russell 3000, IWZ
4.82% , KCE , Capital Markets KWB ST, KCE
4.35% , STLD , Steel Dynamics, STLD
6.39% , CTSH , Cognizant Technology Solutions
3.85% , JKK , Growth SmallCap iS M, JKK
3.24% , SWH , Software H, SWH
4.69% , ZMH , ZIMMER HLDGS
6.50% , KBH , KB HOME
3.57% , FDV , Value 40 Large Low P/E FT DB, FDV
3.12% , HSP , HOSPIRA
1.16% , PSTL , Steel Global PS ETF, PSTL
12.34% , RF , REGIONS FINAN
2.57% , SWK , Stanley Black & Decker
8.94% , OMX , OFFICEMAX INC., OMX
6.73% , UIS , UNISYS
5.94% , PLD , PROLOGIS TRUST
8.23% , CBE , COOPER INDS STK A
4.82% , NWL , NEWELL RUBBER
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-3.55% , DRI , DARDEN REST
-2.02% , URBN , Urban Outfitters Inc.
-1.33% , PEP , PEPSICO
-3.22% , IAU , Gold COMEX iS, IAU
-0.08% , MUB , Bond Muni ATM-Free S&P iS, MUB
-2.19% , EK , EASTMAN KODAK
-0.09% , NEE , NextEra Energy Resources LLC
-3.18% , GLD , Gold Shares S.T., GLD
-0.19% , D , DOMINION RSCS
-0.32% , HANS , Hansen Natural, HANS
-0.26% , DLTR , Dollar Tree Stores Inc
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
4.97% Financial Services DJ, IYG
4.82% Capital Markets KWB ST, KCE
4.79% Financial SPDR, XLF
4.78% Networking, IGN
4.55% Financials VIPERs, VFH
4.52% Financial DJ US, IYF
4.49% Metals & Mining SPDR, XME
4.25% Semiconductor iS IGW, SOXX
4.12% Sweden Index, EWD
4.10% Semiconductor SPDR, XSD
4.03% Value SmallCap VIPERS, VBR
4.02% South Korea Index, EWY
4.01% Value SmallCap S&P 600 B, IJS
4.01% Germany Index, EWG
3.98% Small Cap VIPERs, VB
3.95% Biotech SPDR, XBI
3.94% Value SmallCap Russell 2000, IWN
3.88% Realty Cohen & Steers, ICF
3.88% Australia Index, EWA
3.87% Growth SmallCap VIPERs, VBK
3.87% Energy VIPERs, VDE
3.86% Italy Index, EWI
3.86% SmallCap S&P 600, IJR
3.84% Growth SmallCap R 2000, IWO
3.79% Value MidCap S&P 400 B, IJJ
3.78% SmallCap Russell 2000, IWM
3.77% REIT VIPERs, VNQ
3.75% Energy DJ, IYE
3.66% Energy SPDR, XLE
3.66% South Africa Index, EZA
3.65% REIT Wilshire, RWR
3.63% MidCap S&P 400 SPDRs, MDY
3.59% EMU Europe Index, EZU
3.58% Value MidCap Russell, IWS
3.58% France Index, EWQ
3.56% Growth BARRA Small Cap 600, IJT
3.55% MidCap S&P 400 iS, IJH
3.54% Growth MidCap 400 B, IJK
3.50% Pacific ex-Japan, EPP
3.50% Microcap Russell, IWC
3.46% Homebuilders SPDR, XHB
3.42% WilderHill Clean Energy PS, PBW
3.40% Indonesia MV, IDX
3.38% Energy Global, IXC
3.37% Growth MidCap Russell, IWP
3.36% Real Estate US DJ, IYR
3.35% LargeCap Blend S&P=Weight R, RSP
3.34% Energy & Nat Res iS GS, IGE
3.33% MidCap Russell, IWR
3.27% Oil, Crude, U.S. Oil Fund, USO
3.21% Transportation Av DJ, IYT
3.21% Value S&P 500 B, IVE
3.19% European VIPERs, VGK
3.18% Value 1000 Russell, IWD
3.11% Basic Materials DJ US, IYM
3.11% Industrial SPDR, XLI
3.07% Global ex US ACWI iS, ACWX
3.06% Europe 350 S&P Index, IEV
3.03% Value VIPERs, VTV
3.00% LargeCap Blend Russell 3000, IWV
2.98% Blend Total Market VIPERs, VTI
2.98% EAFE Index, EFA
2.97% Value EAFE MSCI, EFV
2.97% Emerging Markets, EEM
2.96% Water Resources, PHO
2.93% Emerging VIPERs, VWO
2.90% LargeCap 1000 R, IWB
2.88% LargeCap VIPERs, VV
2.88% Info Tech VIPERs, VGT
2.87% Materials SPDR, XLB
2.83% Emerging 50 BLDRS, ADRE
2.82% S&P 500 SPDRs LargeCap Blend, SPY
2.82% United Kingdom Index, EWU
2.81% Growth EAFE MSCI, EFG
2.80% S&P 500 iS LargeCap Blend, IVV
2.80% Small Cap EAFE MSCI iS, SCZ
2.79% Global 100, IOO
2.76% Growth 1000 Russell, IWF
2.75% Technology DJ US, IYW
2.75% Value LargeCap Dynamic PS, PWV
2.74% Growth VIPERs, VUG
2.63% LargeCap Blend S&P 100, OEF
2.61% Singapore Index, EWS
2.61% Russia MV, RSX
2.59% Technology SPDR, XLK
2.59% Consumer Discretionary SPDR, XLY
2.58% Chile MSCI iS, ECH
2.57% Dividend SPDR, SDY
2.56% Pacific VIPERs, VPL
2.54% Oil Fund PowerShares, DBO
2.53% QQQ Nasdaq 100 Trust, QQQ
2.52% India Earnings WTree, EPI
2.51% Brazil Index, EWZ
2.51% Growth S&P 500/BARRA, IVW
2.50% Dividend Appreciation Vipers, VIG
2.45% DIAMONDS (DJIA), DIA
2.42% Netherlands Index, EWN
2.42% Taiwan Index, EWT
2.40% Health Care SPDR, XLV
2.38% India PS, PIN
2.34% China LargeCap Growth G D H USX PS, PGJ
2.33% Dividend High Yield Equity PS, PEY
2.32% Latin Am 40, ILF
2.29% Dividend DJ Select, DVY
2.21% Mexico Index, EWW
2.20% Dividend International, PID
2.14% Thailand MSCI iS, THD
2.06% Austria Index, EWO
1.98% Switzerland Index, EWL
1.97% Canada Index, EWC
1.96% Telecom DJ US, IYZ
1.93% Spain Index, EWP
1.92% Japan Index, EWJ
1.83% China 25 iS, FXI
1.82% Belgium Index, EWK
1.79% Consumer Staples SPDR, XLP
1.57% Hong Kong Index, EWH
1.32% Silver Miners Global X, SIL
1.21% Malaysia Index, EWM
1.14% Utilities VIPERs, VPU
1.12% Utilities SPDR, XLU
1.08% Frontier Markets Guggenheim , FRN
1.02% Preferred Stock iS, PFF
0.91% Commodity Tracking, DBC
0.91% Financial Preferred, PGF
0.90% Bond, High-Yield Junk, JNK
0.66% Bond Ex-US Treas, BWX
0.49% Bond, High-Yield Corporate, HYG
0.37% Bond EmrgMkt JPM iS, EMB
0.36% Agriculture DB PS, DBA
0.31% Turkey MSCI iS, TUR
0.19% Bond, Corp, LQD
-0.02% Bond, 1-3 Year Treasury, SHY
-0.03% Bond Treasury Short-Term iS, SHV
-0.08% Bond Muni ATM-Free S&P iS, MUB
-0.24% Bond, Aggregate, AGG
-0.27% Bond, TIPS, TIP
-0.54% Bond, 10 Year Treasury, IEF
-1.27% Silver Trust iS, SLV
-1.91% Bond, 20+ Years Treasury, TLT
-3.18% Gold Shares S.T., GLD
