S&P 500 Composite (SPX, 1,312.94) fell 1.62 points or 0.12% on Thursday to its lowest closing price in 6 weeks, since 4/19/11. SPX again closed below a 21-trading days down trend line, below a 8-month up trend line, and below the 20-day and 50-day simple moving averages. Indicators of trend and momentum also confirmed a bearish trend.
Consumer Discretionary SPDR stock sector ETF (XLY) absolute price broke down below the May low of 39.43, and that could signal a more serious downside correction.
Crude Oil, Gold, Silver, and Copper turned down, suggesting possible exhaustion of counter trend bounces.
There is a strategy that gained in recent weeks, while most other strategies lost; see:
The Colby Global Markets Report (click here).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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
14.58% , DV , DeVry, Inc.
11.16% , APOL , APOLLO GROUP
5.35% , TBH , Telebras HOLDRS, TBH
5.38% , CECO , CAREER EDUCATION CORP
5.04% , WPO , Washington Post
3.95% , GNW , GENWORTH FINANCIAL
1.09% , EWO , Austria Index, EWO
1.91% , EWP , Spain Index, EWP
1.32% , EWI , Italy Index, EWI
0.99% , FEZ , Euro STOXX 50, FEZ
2.69% , NBR , NABORS
0.22% , ADRA , Asia 50 BLDRS, ADRA
3.63% , TBT , 200% Short US T Bond, TBT
1.28% , HOG , HARLEY DAVIDSON
2.11% , EBAY , EBAY
0.81% , CMS , CMS ENERGY
2.28% , HAL , HALLIBURTON
0.44% , FRN , Frontier Markets Guggenheim , FRN
0.94% , HHH , Internet H, HHH
0.81% , EWN , Netherlands Index, EWN
0.43% , MTK , Technology MS sT, MTK
0.20% , MYY , Short 100% MidCap 400, MYY
1.88% , DOW , DOW CHEMICAL
2.94% , KSU , Kansas City Southern, KSU
0.34% , DOG , Short 100% Dow 30, DOG
2.15% , UNH , UNITEDHEALTH GRP
0.97% , MWV , MEADWESTVACO
0.94% , QLGC , QLOGIC
1.28% , CTSH , Cognizant Technology Solutions
1.67% , ETN , EATON
1.36% , EWZ , Brazil Index, EWZ
1.49% , DBA , Agriculture DB PS, DBA
0.11% , PXN , Nanotech Lux, PXN
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.45% , PWO , OTC Dynamic PS, PWO
-4.28% , PLD , PROLOGIS TRUST
-1.65% , PIC , Insurance, PIC
-3.73% , TAP , ADOLPH COORS STK B, TAP
-5.11% , JNY , JONES APPAREL
-0.69% , NYC , LargeCap Blend NYSE Composite iS, NYC
-0.98% , IYK , Consumer Non-Cyclical, IYK
-4.13% , GPS , GAP
-4.58% , SVU , SUPERVALU
-3.47% , LO , Lorillard, Inc. LO
-4.08% , OMX , OFFICEMAX INC., OMX
-2.17% , LTD , LIMITED BRANDS
-0.56% , NY , Value LargeCap NYSE 100 iS, NY
-0.83% , KLD , LargeCap Blend Socially Responsible iS, KLD
-1.75% , PMR , Retail, PMR
-2.89% , KSS , KOHLS
-2.15% , ZEUS , Olympic Steel, ZEUS
-2.19% , NWL , NEWELL RUBBER
-0.39% , PWP , Value MidCap Dynamic PS, PWP
-0.39% , FDV , Value 40 Large Low P/E FT DB, FDV
-1.28% , SIL , Silver Miners Global X, SIL
-1.31% , GS , GOLDMAN SACHS
-1.96% , GIS , GENERAL MILLS
-0.76% , PIV , Value Line Timeliness MidCap Gr, PIV
-0.45% , TMW , Wilshire 5000 ST TM, TMW
-3.19% , FDO , FAMILY DLR STRS
-1.07% , HSP , HOSPIRA
-0.92% , LEG , LEGGETT & PLATT
-1.51% , COST , COSTCO WHOLESAL
-1.82% , NYT , NY TIMES STK A
-0.38% , DGT , Global Titans, DGT
-1.71% , ESRX , EXPRESS SCRIPTS
-0.29% , IJJ , Value MidCap S&P 400 B, IJJ
9 major U.S. stock sectors ranked in order of long-term relative strength:
Now available by subscription:
The Colby Global Markets Report (click here).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below 11-week lows on 5/23/11 and remains bearish. The Ratio gave a bearish signal on 5/3/11 by crossing below its 50-day SMA. The Ratio remains below the 200-day SMA, and the 50-day SMA remains below the 200-day SMA.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below 8-week lows on 5/23/11. The Ratio gave a bearish signal on 5/11/11 by crossing below its 50-day SMA. The Ratio remains below the 200-day SMA, and the 50-day SMA remains below the 200-day SMA.
NASDAQ Composite/S&P 500 Relative Strength Ratio appears to have entered a downside correction since peaking on 1/18/11 and remains neutral. Absolute price appears to have entered a downside correction since peaking on 5/2/11.
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.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) broke down below 2-month lows on 5/24/11 and has been in a downside correction since 4/5/11.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) has been correcting and consolidating major gains since 4/5/11 and remains neutral. The Ratio rose above all-time highs on 4/5/11.
Crude Oil nearest futures contract price has turned choppy/sideways since the low of 94.63 on 5/6/11. The latest data from the Commodity Futures Trading Commission shows 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 94.63, 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 104.60, 105.16, 114.83, 115.27, 120.42, 130.0, and 147.27.
Gold nearest futures contract price fell below the lows of the previous 2 trading days on 6/2/11, possibly indicating a short-term downtrend. Support: 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: 1577.4.
Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) has been falling steeply since 4/8/11 and remains bearish.
Silver nearest futures contract price fell below the lows of the previous 5 trading days on 6/2/11, possibly indicating a short-term downtrend. Silver challenged last week’s high of 38.845 on 5/31/11 but failed to penetrate it, possibly suggesting exhaustion of the short-term uptrend. Since falling to a low of 32.3 on 5/12/11, Silver may have experienced nothing more than a temporary countertrend bounce and normal partial retracement of losses in a larger downside correction. The problem is that Silver broke support levels and uptrend lines in May, so the larger trend may be bearish. Silver fell below 11-week lows on 5/12/11. 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 36.265, 32.3, 31.695, 31.61, 30.265, 29.635, 26.30, 24.98, and 22.84. Resistance: 38.845, 39.38, 39.47, 49.845 and 50.35.
Silver/Gold Ratio entered a steep downtrend since the peak on 4/28/11. Although the Ratio has recovered modestly since 5/16/11, it may remain bearish.
Copper nearest futures contract price fell below the lows of the previous 4 trading days on 6/2/11, possibly indicating a short-term downtrend. Longer term, Copper broke down below previous 4-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, 3.6065, 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 rose above the highs of the previous 6 months on 6/1/11, again reconfirming a significant uptrend. The Bond built a 5-month, intermediate-term bullish base since the low of 12/15/10. 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 125.11. 124.30, 123.18, 120.20, 119.15, 117.28, 117.04, 116.26, 115.15, 114.06, 113.04, and 112.15. Resistance 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 down below 6-month lows on 6/1/11. Absolute price of JNK peaked at 41.32 on 11/4/10.
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 6/1/11, again reconfirming a medium-term 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 dying.
The U.S. dollar nearest futures contract price fell below the lows of the previous 4-weeks on 6/2/11, confirming a downside price correction. Support 72.86 and 70.80. Resistance 76.54, 76.87, 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 57.3% Bulls versus 15.7% Bears as of 4/6/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio soared to 3.65, up from 2.23 the previous week. The Ratio rose its highest level in the 8 years since the 20-year high of 3.74 set on 6/18/03. Following that 2003 peak, the stock market turned sideways/choppy for 2 months and sentiment reverted toward the mean. The Ratio’s 20-year range is 0.41 to 3.74, the median is 1.56, and the mean is 1.63. According to Humphrey B. Neill, The Art of Contrary Thinking, when everybody thinks alike, everyone is likely to be wrong.
VIX Fear Index fell below its 3-year range on 4/20/11, hitting 14.30 intraday, and again confirming a preexisting trend toward bullish complacency. This follows a brief spike up to an intraday peak of 31.28 on 3/16/11. Fear was short-lived. 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. Looking ahead, joint closes below the 5/17/11 closing price lows could have serious bearish implications for the multi-month Secondary Trend. Here are the critical closing price levels to watch out for: 12,479.60 for the Dow-Jones Industrials and 5,335.37 for the Dow-Jones Transports.
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. These bearish divergence warnings are still in effect.
S&P 500 Composite (SPX, 1,312.94) fell 1.62 points or 0.12% on Thursday to its lowest closing price in 6 weeks, since 4/19/11. SPX again closed below a 21-trading days down trend line, below a 8-month up trend line, and below the 20-day and 50-day simple moving averages. Indicators of trend and momentum also confirmed a bearish trend.
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
1359.44.50, high of 5/10/11
S&P 500 Cash Index Potential Support
1294.70, low of 4/18/11
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
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
0.98% Bond, 20+ Years Treasury, TLT
0.57% Bond, 10 Year Treasury, IEF
0.18% Gold Shares S.T., GLD
0.14% Bond, Aggregate, AGG
0.12% Bond, Corp, LQD
-0.01% Bond Treasury Short-Term iS, SHV
-0.01% Bond, 1-3 Year Treasury, SHY
-0.13% Taiwan Index, EWT
-0.19% Financial Preferred, PGF
-0.23% Bond, TIPS, TIP
-0.37% Bond Muni ATM-Free S&P iS, MUB
-0.42% Bond Ex-US Treas, BWX
-0.44% Bond EmrgMkt JPM iS, EMB
-0.59% India Earnings WTree, EPI
-0.82% Preferred Stock iS, PFF
-0.88% Chile MSCI iS, ECH
-0.92% India PS, PIN
-1.02% Consumer Staples SPDR, XLP
-1.03% Utilities SPDR, XLU
-1.06% Utilities VIPERs, VPU
-1.13% Hong Kong Index, EWH
-1.14% Turkey MSCI iS, TUR
-1.16% Switzerland Index, EWL
-1.19% Bond, High-Yield Corporate, HYG
-1.21% Indonesia MV, IDX
-1.26% Commodity Tracking, DBC
-1.27% Japan Index, EWJ
-1.34% Agriculture DB PS, DBA
-1.35% Frontier Markets Guggenheim , FRN
-1.36% Telecom DJ US, IYZ
-1.38% Health Care SPDR, XLV
-1.39% Bond, High-Yield Junk, JNK
-1.45% Emerging VIPERs, VWO
-1.47% Emerging 50 BLDRS, ADRE
-1.53% Malaysia Index, EWM
-1.62% South Korea Index, EWY
-1.63% Dividend International, PID
-1.75% Pacific VIPERs, VPL
-1.79% Dividend DJ Select, DVY
-1.79% Emerging Markets, EEM
-1.85% Austria Index, EWO
-1.91% Dividend SPDR, SDY
-1.94% China LargeCap Growth G D H USX PS, PGJ
-1.94% Small Cap EAFE MSCI iS, SCZ
-1.95% South Africa Index, EZA
-1.96% China 25 iS, FXI
-1.97% Value LargeCap Dynamic PS, PWV
-1.97% Singapore Index, EWS
-2.00% Dividend High Yield Equity PS, PEY
-2.01% Belgium Index, EWK
-2.04% Global 100, IOO
-2.05% Dividend Appreciation Vipers, VIG
-2.08% Technology SPDR, XLK
-2.08% Latin Am 40, ILF
-2.09% Brazil Index, EWZ
-2.09% Growth 1000 Russell, IWF
-2.10% Growth S&P 500/BARRA, IVW
-2.15% LargeCap Blend S&P 100, OEF
-2.16% Growth VIPERs, VUG
-2.16% Growth EAFE MSCI, EFG
-2.16% Global ex US ACWI iS, ACWX
-2.18% QQQ Nasdaq 100 Trust, QQQ
-2.20% S&P 500 iS LargeCap Blend, IVV
-2.21% LargeCap 1000 R, IWB
-2.22% Info Tech VIPERs, VGT
-2.23% LargeCap VIPERs, VV
-2.23% DIAMONDS (DJIA), DIA
-2.25% S&P 500 SPDRs LargeCap Blend, SPY
-2.27% Blend Total Market VIPERs, VTI
-2.27% Value VIPERs, VTV
-2.28% Consumer Discretionary SPDR, XLY
-2.28% Technology DJ US, IYW
-2.28% Growth MidCap 400 B, IJK
-2.29% Netherlands Index, EWN
-2.30% Pacific ex-Japan, EPP
-2.31% MidCap Russell, IWR
-2.32% Australia Index, EWA
-2.32% Sweden Index, EWD
-2.33% LargeCap Blend Russell 3000, IWV
-2.36% Energy VIPERs, VDE
-2.36% LargeCap Blend S&P=Weight R, RSP
-2.36% Energy DJ, IYE
-2.37% EAFE Index, EFA
-2.39% Energy SPDR, XLE
-2.39% Value MidCap Russell, IWS
-2.40% Value S&P 500 B, IVE
-2.41% Value 1000 Russell, IWD
-2.42% Russia MV, RSX
-2.42% Oil, Crude, U.S. Oil Fund, USO
-2.43% Growth MidCap Russell, IWP
-2.46% Value EAFE MSCI, EFV
-2.48% MidCap S&P 400 iS, IJH
-2.49% Mexico Index, EWW
-2.51% Biotech SPDR, XBI
-2.52% Energy Global, IXC
-2.58% Oil Fund PowerShares, DBO
-2.58% Value MidCap S&P 400 B, IJJ
-2.59% Homebuilders SPDR, XHB
-2.60% European VIPERs, VGK
-2.63% Energy & Nat Res iS GS, IGE
-2.68% Italy Index, EWI
-2.73% United Kingdom Index, EWU
-2.74% France Index, EWQ
-2.78% Europe 350 S&P Index, IEV
-2.80% Germany Index, EWG
-2.81% Value SmallCap VIPERS, VBR
-2.82% Real Estate US DJ, IYR
-2.83% Canada Index, EWC
-2.84% REIT Wilshire, RWR
-2.86% EMU Europe Index, EZU
-2.87% REIT VIPERs, VNQ
-2.88% MidCap S&P 400 SPDRs, MDY
-2.88% Realty Cohen & Steers, ICF
-2.91% Semiconductor iS IGW, SOXX
-2.95% Small Cap VIPERs, VB
-2.95% Thailand MSCI iS, THD
-2.95% Value SmallCap S&P 600 B, IJS
-2.96% Growth BARRA Small Cap 600, IJT
-2.99% Silver Miners Global X, SIL
-2.99% SmallCap S&P 600, IJR
-3.01% Basic Materials DJ US, IYM
-3.01% Spain Index, EWP
-3.03% Value SmallCap Russell 2000, IWN
-3.07% Growth SmallCap VIPERs, VBK
-3.10% Microcap Russell, IWC
-3.12% Materials SPDR, XLB
-3.13% Water Resources, PHO
-3.20% Financial DJ US, IYF
-3.22% SmallCap Russell 2000, IWM
-3.25% WilderHill Clean Energy PS, PBW
-3.25% Growth SmallCap R 2000, IWO
-3.25% Financials VIPERs, VFH
-3.27% Industrial SPDR, XLI
-3.27% Semiconductor SPDR, XSD
-3.33% Transportation Av DJ, IYT
-3.38% Financial SPDR, XLF
-3.54% Metals & Mining SPDR, XME
-3.58% Networking, IGN
-3.71% Financial Services DJ, IYG
-4.17% Capital Markets KWB ST, KCE
-4.92% Silver Trust iS, SLV
