S&P 500 Composite (SPX, 1,287.14) fell 8.38 points or 0.65% on Wednesday 6/22/11. SPX remains in a significant intermediate-term downtrend.
Volume on the NYSE fell 6% below Tuesday’s pace and was 17% below the 200-day SMA. Low volume continues to suggest weak demand for stocks.
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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
4.65% , LLL , L-3 COMMS HLDGS
7.01% , KMX , CarMax
0.20% , UTH , Utilities H, UTH
1.89% , XRAY , DENTSPLY International Inc
1.28% , DBO , Oil Fund PowerShares, DBO
1.74% , EK , EASTMAN KODAK
2.59% , FDX , FEDEX
1.43% , TNB , THOMAS & BETTS
3.54% , RFMD , RF Micro Devices Inc
1.46% , LEN , Lennar Corp. (LEN)
3.18% , JBL , JABIL CIRCUIT
2.02% , BSX , BOSTON SCIENT
1.41% , DHI , D.R. HORTON, DHI
0.73% , PWO , OTC Dynamic PS, PWO
1.11% , KBH , KB HOME
0.39% , FLEX , Flextronics International Ltd
1.48% , NEM , NEWMONT MINING
1.50% , SBUX , STARBUCKS
1.30% , AN , AUTONATION
0.76% , SRCL , Stericycle, SRCL
0.94% , SNI , Scripps Networks Interactive
1.97% , CAG , CONAGRA FOODS
0.88% , JCI , JOHNSON CONTROLS
0.40% , PHM , PULTE HOMES
1.29% , KWT , Solar Energy MV, KWT
0.61% , AXP , AMERICAN EXPRESS
0.36% , EXPD , Expeditors International WA
0.40% , GWW , WW GRAINGER
0.32% , APOL , APOLLO GROUP
0.26% , IAU , Gold COMEX iS, IAU
0.51% , APD , AIR PRODS & CHEM
2.27% , CIEN.O , CIENA
0.65% , UPS , UNITED PARCEL STK B
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.84% , BDH , Broadband H, BDH
-2.31% , ACWX , Global ex US ACWI iS, ACWX
-0.15% , PPA , Aerospace & Defense, PPA
-6.25% , ADBE , ADOBE SYS
-3.52% , EFV , Value EAFE MSCI, EFV
-0.58% , IYY , LargeCap Blend Total Market DJ, IYY
-0.71% , ADRA , Asia 50 BLDRS, ADRA
-1.22% , IOO , Global 100, IOO
-0.61% , PWV , Value LargeCap Dynamic PS, PWV
-2.24% , CBE , COOPER INDS STK A
-3.03% , NKE , NIKE STK B
-1.72% , SCZ , Small Cap EAFE MSCI iS, SCZ
-1.43% , RF , REGIONS FINAN
-0.73% , IGM , Technology GS, IGM
-1.30% , FEZ , Euro STOXX 50, FEZ
-4.11% , LAMR , Lamar Advertising Company
-1.21% , RAI , Reynolds American
-0.34% , VOX , Telecom Services VIPERs, VOX
-1.85% , ZEUS , Olympic Steel, ZEUS
-1.46% , RYAAY , Ryanair Holdings plc
-0.52% , JKJ , SmallCap Core iS M, JKJ
-3.86% , EWI , Italy Index, EWI
-2.06% , PM , Philip Morris, PM
-0.94% , PXN , Nanotech Lux, PXN
-2.42% , EFG , Growth EAFE MSCI, EFG
-0.48% , PWB , Lg Cap Growth PSD, PWB
-0.33% , PKB , Building & Construction, PKB
-0.37% , VPL , Pacific VIPERs, VPL
-0.46% , IWW , Value LargeCap Russell 3000, IWW
-3.40% , SHLD , SEARS HOLDINGS
-0.58% , JKI , Value MidCap iS M, JKI
-0.48% , FDL , Dividend Leaders, FDL
-2.12% , CSC , COMPUTER SCIENCE
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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).
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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 is below the 50-day SMA, 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 consolidated losses after breaking down below the lows of the past 4 months on 6/20/11, and 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 7 trading days to its highest price level in 7 weeks. Technically, Gold is in a short-term uptrend and a medium-term neutral trend. It may still be possible that Gold topped out at 1577.4 on 5/2/11 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: 1559.3 and 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 recovered somewhat after 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 37.6% Bulls versus 28.0% Bears as of 6/22/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio fell to 1.34, which is moderately below normal, with a 20-year range of 0.41 to 3.74, a median of 1.56, and a mean of 1.64. Note that Advisory Service Sentiment as of 4/6/11 peaked at 3.65, its highest level in 8 years. 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, 1,287.14) fell 8.38 points or 0.65% on Wednesday 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
1.28% Oil Fund PowerShares, DBO
0.84% Oil, Crude, U.S. Oil Fund, USO
0.46% WilderHill Clean Energy PS, PBW
0.45% Commodity Tracking, DBC
0.32% Silver Miners Global X, SIL
0.24% Metals & Mining SPDR, XME
0.15% Gold Shares S.T., GLD
0.14% Bond, Corp, LQD
0.10% Indonesia MV, IDX
0.08% Preferred Stock iS, PFF
0.06% Bond EmrgMkt JPM iS, EMB
0.06% Bond, 20+ Years Treasury, TLT
0.06% Financial Preferred, PGF
0.00% Bond Treasury Short-Term iS, SHV
-0.02% Bond, 1-3 Year Treasury, SHY
-0.03% Silver Trust iS, SLV
-0.04% Latin Am 40, ILF
-0.04% Bond, 10 Year Treasury, IEF
-0.07% Bond, Aggregate, AGG
-0.10% Bond Muni ATM-Free S&P iS, MUB
-0.16% Water Resources, PHO
-0.16% Energy & Nat Res iS GS, IGE
-0.19% Bond Ex-US Treas, BWX
-0.21% Real Estate US DJ, IYR
-0.23% Bond, TIPS, TIP
-0.23% Transportation Av DJ, IYT
-0.24% REIT Wilshire, RWR
-0.26% Basic Materials DJ US, IYM
-0.27% Realty Cohen & Steers, ICF
-0.29% Energy SPDR, XLE
-0.30% REIT VIPERs, VNQ
-0.33% Energy VIPERs, VDE
-0.35% Value MidCap S&P 400 B, IJJ
-0.37% Pacific VIPERs, VPL
-0.37% Semiconductor SPDR, XSD
-0.38% Energy DJ, IYE
-0.39% Semiconductor iS IGW, SOXX
-0.40% Value MidCap Russell, IWS
-0.41% Materials SPDR, XLB
-0.43% MidCap S&P 400 SPDRs, MDY
-0.44% Dividend International, PID
-0.45% MidCap S&P 400 iS, IJH
-0.46% Dividend High Yield Equity PS, PEY
-0.46% Value 1000 Russell, IWD
-0.47% MidCap Russell, IWR
-0.48% Frontier Markets Guggenheim , FRN
-0.49% Growth SmallCap VIPERs, VBK
-0.50% Growth MidCap Russell, IWP
-0.50% Growth MidCap 400 B, IJK
-0.50% Financials VIPERs, VFH
-0.52% Value SmallCap VIPERS, VBR
-0.52% Dividend SPDR, SDY
-0.53% Telecom DJ US, IYZ
-0.53% Emerging 50 BLDRS, ADRE
-0.54% Financial DJ US, IYF
-0.55% Blend Total Market VIPERs, VTI
-0.55% Industrial SPDR, XLI
-0.55% Small Cap VIPERs, VB
-0.55% LargeCap Blend Russell 3000, IWV
-0.56% LargeCap Blend S&P=Weight R, RSP
-0.57% LargeCap 1000 R, IWB
-0.57% Value S&P 500 B, IVE
-0.58% Dividend Appreciation Vipers, VIG
-0.59% LargeCap VIPERs, VV
-0.59% Growth S&P 500/BARRA, IVW
-0.59% Biotech SPDR, XBI
-0.59% Value VIPERs, VTV
-0.59% Health Care SPDR, XLV
-0.60% Dividend DJ Select, DVY
-0.60% Financial SPDR, XLF
-0.60% S&P 500 SPDRs LargeCap Blend, SPY
-0.61% S&P 500 iS LargeCap Blend, IVV
-0.61% Value LargeCap Dynamic PS, PWV
-0.61% Networking, IGN
-0.61% Mexico Index, EWW
-0.62% Financial Services DJ, IYG
-0.62% Growth VIPERs, VUG
-0.62% LargeCap Blend S&P 100, OEF
-0.62% Growth 1000 Russell, IWF
-0.64% Consumer Staples SPDR, XLP
-0.64% DIAMONDS (DJIA), DIA
-0.65% Utilities VIPERs, VPU
-0.65% Value SmallCap S&P 600 B, IJS
-0.66% Utilities SPDR, XLU
-0.67% Homebuilders SPDR, XHB
-0.67% SmallCap S&P 600, IJR
-0.69% Info Tech VIPERs, VGT
-0.70% Technology DJ US, IYW
-0.71% Energy Global, IXC
-0.72% Growth BARRA Small Cap 600, IJT
-0.72% Technology SPDR, XLK
-0.72% Bond, High-Yield Corporate, HYG
-0.72% QQQ Nasdaq 100 Trust, QQQ
-0.73% Value SmallCap Russell 2000, IWN
-0.77% Consumer Discretionary SPDR, XLY
-0.77% SmallCap Russell 2000, IWM
-0.78% Emerging VIPERs, VWO
-0.83% Bond, High-Yield Junk, JNK
-0.86% Growth SmallCap R 2000, IWO
-0.87% Canada Index, EWC
-0.96% Taiwan Index, EWT
-0.98% Japan Index, EWJ
-0.99% Capital Markets KWB ST, KCE
-1.00% South Korea Index, EWY
-1.01% China LargeCap Growth G D H USX PS, PGJ
-1.10% Russia MV, RSX
-1.12% Microcap Russell, IWC
-1.22% Global 100, IOO
-1.26% Europe 350 S&P Index, IEV
-1.37% Brazil Index, EWZ
-1.37% European VIPERs, VGK
-1.46% Chile MSCI iS, ECH
-1.68% Agriculture DB PS, DBA
-1.71% Malaysia Index, EWM
-1.72% Small Cap EAFE MSCI iS, SCZ
-1.77% India Earnings WTree, EPI
-1.82% Hong Kong Index, EWH
-1.85% India PS, PIN
-1.89% China 25 iS, FXI
-1.98% Emerging Markets, EEM
-2.31% Global ex US ACWI iS, ACWX
-2.42% Growth EAFE MSCI, EFG
-2.49% Australia Index, EWA
-2.50% Pacific ex-Japan, EPP
-2.57% Singapore Index, EWS
-2.65% France Index, EWQ
-2.86% EAFE Index, EFA
-2.97% Switzerland Index, EWL
-3.01% Thailand MSCI iS, THD
-3.04% Austria Index, EWO
-3.08% United Kingdom Index, EWU
-3.16% Belgium Index, EWK
-3.18% Spain Index, EWP
-3.27% EMU Europe Index, EZU
-3.44% Germany Index, EWG
-3.52% Value EAFE MSCI, EFV
-3.59% Netherlands Index, EWN
-3.69% Turkey MSCI iS, TUR
-3.86% Italy Index, EWI
-4.07% South Africa Index, EZA
-5.48% Sweden Index, EWD
