Stock price indexes tested 4-year highs last week, but they failed the test. The S&P 500 rose above previous highs intraday on Tuesday but reversed and could not close at a new high. SPX ended the week with a loss of 0.50%, for its first weekly loss after 6 consecutive plus weeks.
The S&P 500 (SPX: 1,411.13) rose 9.05 points or 0.65% on Friday, recovering most of Thursday’s loss, which was the largest daily loss in 4 weeks, since 7/24/12.
Momentum oscillators have turned downward, after many of them demonstrated bearish divergences. RSI(14,9), Stochastic(14,3,3), and MACD(12,26,9) are all below their signal lines, based on the SPX and the standard indicator default settings.
The number of stocks making new highs in August has been but a fraction of July’s peak numbers, thereby indicating bearish divergence.
NYSE volume fell 13% on Friday and was 32% below its 200-day SMA. Volume has been running near the lowest levels of the year since 8/8/12, possibly reflecting diminishing enthusiasm for stocks, as well as summer vacations.
On-Balance Volume for the SPX remains in a downtrend with bearish divergence.
NYSE Cumulative Volume of Advancing Stocks minus Volume of Declining Stocks remains weak relative to price: it recovered only a little more than 61.8% of its March-June loss while the S&P 500 recovered 100%. Clearly, volume has not been confirming the price up move.
It takes volume to push prices up. After the shorts have been forced to cover and the longs have had their fill of buying, in the absence of a fresh source of demand, stocks fall of their own weight.
While the S&P 500 Composite Price Index recovered nearly all of its April-June loss, both the percentage of these same 500 stocks that are above their 200-day SMAs and the percentage in bullish Point-and-Figure Chart uptrends have recovered much less of their losses. Moreover, both are systematically neutral relative to their own 50- and 200-day SMAs. Both indicators turned down last week after failing to confirm the strength in the S&P 500. Both are diverging bearishly.
With the stock price indexes far above their 4-year lows and still very close to the top end of their 4-year price range, downside risk may exceed upside potential for the stock market. Choosing safety over risk appears to be the most reasonable approach for conservative traders and investors.
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Hedge funds and equity mutual funds both lost money last year, 2011, and some are down again this year as well.
Meanwhile, one money manager made gains for 5 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).
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Stock Market Indicators
The Dow Theory signaled a Primary Tide Bear Market on 5/17/12 when both Industrials and Transports closed below their closing price lows of the previous 4 months, including the critical lows of March and April, 2012. The Averages gave an early warning by diverging after 2/3/12, as the Transports turned corrective and failed to confirm higher highs by the Industrials. Again on 5/1/12, the Industrials rose to a higher closing price high while the Transports failed to rise to a higher closing price high, thereby indicating a non-confirmation and bearish divergence. Last week, the Industrials closely approached their highs of the year, but the Transports continued to lag well below their highs, thereby demonstrating a bearish divergence.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) MDY/SPY whipsawed back below its 50-day SMA again on 8/24/12, thereby turning systematically bearish again. MDY/SPY remains below its 200-day SMA, and its 50-day SMA has been below its 200-day SMA since 6/6/12.
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The S&P 500 Composite 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
1426.68, high of 8/21/2012
1422.38, high of 4/2/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
The S&P 500 Composite Potential Support
1398.04, low of 8/24/2012
1391.04, low of 8/6/2012
1389.07, Fibonacci 78.6% of April-June 2012 range
1388.71, low of 5/3/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1370.58, high of 5/2/2011
1370.34, 50-day SMA
1363.49, high of 6/19/2012
1362.93, Fibonacci 61.8% of April-June 2012 range
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
1344.56, Fibonacci 50% of April-June 2012 range
1340.34, Fibonacci 23.6% of 2011-12 range
1340.03, low of 3/6/2012
1335.52, high of 6/11/2012
1334.93, high of 5/31/2012
1334.05, 200-day SMA
1329.24, low of 7/24/2012
1329.05, high of 6/7/2012
1328.49, high of 5/22/2012
1326.19, Fibonacci 38.2% of April-June 2012 range
1325.41, low of 7/12/2012
1306.62, low of 6/12/2012
1303.47, Fibonacci 23.6% of April-June 2012 range
1291.98, low of 5/18/2012
1289.59, Fibonacci 38.2% of 2011-12 range
1266.74, low of 6/4/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1257.58, Fibonacci 61.8% of 2011 range
1248.58, Fibonacci 50.0% of 2011-12 range
1244.80, low of 12/7/2011
1239.73, low of 12/1/2011
1238.81, Fibonacci 78.6% of 1,576.09 high
1234.81, low of 11/3/2011
1231.04, high of 12/16/2011
1228.74, Fibonacci 61.8% of 2007-2009 range
1226.64, low of 11/9/2011
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1207.56, Fibonacci 61.8% of 2011-12 range
1202.37, low of 12/19/2011
1158.66, low of 11/25/2011
1121.44, Fibonacci 50% of 2007-2009 range
1074.77, low of 10/4/2011
1149.16, Fibonacci 78.6% R of 2011-12 range
1014.14, Fibonacci 38.2% of 2007-2009 range
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
881.38, Fibonacci 23.6% of 2007-2009 range
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) appears to be “hammering out a bottom”. UUP remains systematically neutral: below its 50-day SMA, above its 200-day SMA, and its 50-day SMA has stayed above its 200-day SMA every day since 10/26/11. Support 22.30, 22.14, 21.89, 21.74, 21.58, 21.07, and 20.84. Resistance 23.14, 23.52, 25.84, 27.19, 28.97.
CRB Commodity Price Index remains systematically neutral: above its 50-day SMA, above its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 8/18/11.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) whipsawed back down into a triangle consolidation pattern on 8/23/12 following a failed breakout on 8/21/12. DBA remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and its 50-day SMA rose above its 200-day SMA on 8/13/12. High food prices could bring trouble for the general economy because more consumer spending for food means less consumer spending available for other goods and services.
Crude Oil, United States Oil ETF (USO) turned systematically neutral on 7/16/12, when price rose above its 50-day SMA. USO remains below its 200-day SMA, and its 50-day remains far below its 200-day SMA. Support 34.34, 32.45, 31.40, 29.02, 26.28, and 22.74. Resistance 36.97, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) rose above its 200-day SMA on 8/22/12 but remains systematically neutral. GLD remains above its 50-day SMA, but its 50-day SMA has stayed below its 200-day SMA every day since 4/17/12. Support: 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 163.20, 164.89, 166.57, 174.00, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) rose above its 50-day SMA on 8/16/12, thereby turning systematically neutral. GDX/GLD remains below its 200-day SMA, and its 50-day SMA has remained bearishly below its 200-day SMA every day since 2/22/11.
Silver, iShares Silver Trust ETF (SLV) price rose above its 50-day SMA on 8/3/12, thereby turning systematically neutral. SLV also rose above its 200-day SMA on 8/24/12, but its 50-day SMA has remained below its 200-day SMA every day since 10/27/11. Support 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 30.52, 31.64, 32.34, 33.44, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) turned systematically neutral when it rose above its 50-day SMA on 8/16/12. SLV/GLD remains below its 200-day SMA, and the 50-day SMA has remained below the 200-day SMA every day since 8/30/11.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price whipsawed back above its 50-day SMA on 8/21/12, thereby turning systematically neutral again for the short term. Longer term, JJC fell to its lowest level in 8 months on 8/2/12, thereby confirming its major bearish trend. JJC price remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 5/31/12. In addition, JJC remains far below its 2011 high at 61.69 and has underperformed the stock market since 12/31/10. Given that “Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, this relative weakness may be suggesting rising doubts about prospects going forward.
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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
5.96% , WPI , WATSON PHARM
3.44% , LLY , ELI LILLY
10.85% , SVU , SUPERVALU
0.76% , IXJ , Healthcare Global, IXJ
0.42% , FPX , IPOs, First Tr IPOX-100, FPX
4.13% , NTAP , NETWK APPLIANCE
0.56% , JKF , Value LargeCap iS M, JKF
3.74% , VMC , VULCAN MATERIALS
2.17% , FAST , Fastenal Company
2.69% , EMC , EMC
1.85% , GIS , GENERAL MILLS
2.02% , SHW , SHERWIN WILLIAMS
3.24% , GNW , GENWORTH FINANCIAL
0.49% , NYC , LargeCap Blend NYSE Composite iS, NYC
1.21% , PKB , Building & Construction, PKB
0.56% , PFM , Dividend Achievers PS, PFM
2.23% , COF , CAPITAL ONE FNCL
2.21% , GILD , Gilead Sciences Inc
2.58% , BC , BRUNSWICK
0.68% , JKD , LargeCap Blend Core iS M, JKD
0.50% , XSD , Semiconductor SPDR, XSD
1.52% , LH , LAB CRP OF AMER
2.22% , LTD , LIMITED BRANDS
2.04% , KSS , KOHLS
1.13% , PXN , Nanotech Lux, PXN
0.53% , IWV , LargeCap Blend Russell 3000, IWV
1.36% , ITW , ILLINOIS TOOL
0.86% , XLV , Health Care SPDR, XLV
1.75% , TROW , T ROWE PRICE GP
1.52% , DISCA , Discovery Communications
0.35% , JNK , Bond, High-Yield Junk, JNK
1.09% , RAI , Reynolds American
2.96% , LPX , LOUISIANA PAC
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-15.63% , ADSK , AUTODESK
-3.70% , ADBE , ADOBE SYS
-0.83% , KWT , Solar Energy MV, KWT
-3.40% , RSH , RADIOSHACK
-1.85% , PMTC.O , PARAMETRIC
-2.11% , DV , DeVry, Inc.
-1.97% , CIEN.O , CIENA
-0.83% , DOG , Short 100% Dow 30, DOG
-1.53% , ERIC.O , LM Ericsson Telephone Company
-0.45% , DBC , Commodity Tracking, DBC
-0.47% , PBW , WilderHill Clean Energy PS, PBW
-0.10% , BWX , Bond Ex-US Treas, BWX
-1.48% , AET , AETNA
-0.56% , FXI , China 25 iS, FXI
-1.57% , HOLX , Hologic, Inc., HOLX
-0.99% , YUM , YUM BRANDS
-1.54% , DXD , Short 200% Dow 30 PS, DXD
-1.40% , CR , CRANE
-1.18% , SPLS , STAPLES
-0.50% , MPEL , Melco Crown Entertainment, MPEL
-0.29% , CECO , CAREER EDUCATION CORP
-0.56% , DBO , Oil Fund PowerShares, DBO
-1.12% , NUE , NUCOR
-0.38% , NOV , NATIONAL OILWELL VARC0
-0.21% , HON , HONEYWELL INTL
-0.47% , EWU , United Kingdom Index, EWU
-0.22% , PH , PARKER HANNIFIN
-0.40% , MAR , MARRIOTT INTL STK A
-0.53% , FDO , FAMILY DLR STRS
-0.65% , SH , Short 100% S&P 500, SH
-0.29% , FE , FIRSTENERGY
-0.17% , EZU , EMU Europe Index, EZU
-0.16% , VAW , Materials VIPERs, VAW
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.12% Homebuilders SPDR, XHB
1.10% Biotech SPDR, XBI
1.05% Telecom DJ US, IYZ
1.01% Russia MV, RSX
0.88% Consumer Staples SPDR, XLP
0.86% Health Care SPDR, XLV
0.82% Consumer Discretionary SPDR, XLY
0.77% DIAMONDS (DJIA), DIA
0.71% LargeCap Blend S&P 100, OEF
0.69% LargeCap Growth Russell 1000 iS, IWF
0.68% Mexico Index, EWW
0.67% Spain Index, EWP
0.66% Energy DJ, IYE
0.64% LargeCap Blend S&P 500 iS, IVV
0.63% Technology SPDR, XLK
0.62% QQQ Nasdaq 100 Trust, QQQ
0.62% Energy VIPERs, VDE
0.62% LargeCap Growth S&P 500 iS, IVW
0.61% Dividend Appreciation Vipers, VIG
0.61% LargeCap VIPERs, VV
0.60% S&P 500 SPDRs LargeCap Blend, SPY
0.59% Value VIPERs, VTV
0.59% Energy SPDR, XLE
0.59% LargeCap Blend Russell 1000 iS, IWB
0.58% Growth VIPERs, VUG
0.57% Blend Total Market VIPERs, VTI
0.57% Financials VIPERs, VFH
0.57% Value LargeCap Dynamic PS, PWV
0.56% Dividend U.S. DJ iS, DVY
0.54% Capital Markets KWB ST, KCE
0.53% Financial SPDR, XLF
0.53% Dividend High Yield Equity PS, PEY
0.53% LargeCap Blend Russell 3000 iS, IWV
0.53% LargeCap Blend S&P=Weight R, RSP
0.52% Energy Global, IXC
0.51% Financial Services DJ, IYG
0.50% Semiconductor SPDR, XSD
0.50% LargeCap Value S&P 500 iS, IVE
0.50% Semiconductor iS IGW, SOXX
0.49% Growth MidCap Russell, IWP
0.49% Dividend SPDR, SDY
0.49% MidCap Russell, IWR
0.48% Financial DJ US, IYF
0.47% Silver Trust iS, SLV
0.47% Canada Index, EWC
0.47% Energy & Nat Res iS GS, IGE
0.47% Utilities SPDR, XLU
0.47% Industrial SPDR, XLI
0.45% Realty Cohen & Steers, ICF
0.45% Utilities VIPERs, VPU
0.45% Bond, High Yield Corp iBoxx iS, HYG
0.44% LargeCap Value Russell 1000 iS, IWD
0.44% Value MidCap Russell, IWS
0.42% Technology DJ US, IYW
0.40% Info Tech VIPERs, VGT
0.40% Taiwan Index, EWT
0.39% Real Estate US DJ iS, IYR
0.38% REIT Wilshire, RWR
0.38% Singapore Index, EWS
0.37% Global LargeCap Blend MSCI iS, ACWI
0.36% Microcap Russell, IWC
0.35% Bond, High-Yield Junk, JNK
0.35% India PS, PIN
0.34% Global 100, IOO
0.34% Malaysia Index, EWM
0.33% REIT VIPERs, VNQ
0.29% SmallCap Growth Russell 2000 iS, IWO
0.29% MidCap Blend S&P 400 iS, IJH
0.27% SmallCap Blend Russell 2000 iS, IWM
0.26% MidCap Value S&P 400 iS, IJJ
0.26% MidCap S&P 400 SPDRs, MDY
0.26% Value SmallCap VIPERS, VBR
0.26% Small Cap VIPERs, VB
0.25% Belgium Index, EWK
0.25% Thailand MSCI iS, THD
0.25% Growth SmallCap VIPERs, VBK
0.24% SmallCap Growth S&P 600 iS, IJT
0.24% SmallCap Blend S&P 600 iS, IJR
0.22% MidCap Growth S&P 400 iS, IJK
0.21% Growth EAFE MSCI, EFG
0.20% Agriculture DB PS, DBA
0.18% SmallCap Value S&P 600 iS, IJS
0.18% Sweden Index, EWD
0.18% Hong Kong Index, EWH
0.17% SmallCap Value Russell 2000 iS, IWN
0.17% Brazil Index, EWZ
0.16% South Korea Index, EWY
0.15% Networking, IGN
0.15% Dividend International, PID
0.14% Turkey MSCI iS, TUR
0.14% Pacific ex-Japan, EPP
0.11% China LargeCap Growth G D H USX PS, PGJ
0.11% Bond, Long-Term Corp iBoxx iS, LQD
0.11% Water Resources, PHO
0.10% Bond, Muni S&P ATM-Free iS, MUB
0.10% Pacific VIPERs, VPL
0.08% Bond, Emerg Mkt JPM iS, EMB
0.07% Latin Am 40, ILF
0.06% Emerging VIPERs, VWO
0.05% Preferred Stock iS, PFF
0.05% Gold Shares S.T., GLD
0.03% Emerging Markets MSCI iS, EEM
0.02% Value EAFE MSCI, EFV
0.00% Financial Preferred, PGF
0.00% Bond, 1-3 Year Treasury, SHY
0.00% Bond Treasury Short-Term iS, SHV
-0.01% Transportation Av DJ, IYT
-0.02% Bond, TIPS U.S. Treasury iS, TIP
-0.03% India Earnings WTree, EPI
-0.03% Dividend ex-U.S. DJ iS, IDV
-0.05% Bond, 10 Year Treasury, IEF
-0.05% Frontier Markets Guggenheim , FRN
-0.07% Bond, Intermediate US Aggregate iS, AGG
-0.08% Switzerland Index, EWL
-0.10% Bond, 20+ Years Treasury, TLT
-0.10% Bond Ex-US Treas, BWX
-0.10% Global ex U.S. LargeCap Blend, ACWX
-0.11% Japan Index, EWJ
-0.13% Australia Index, EWA
-0.14% Basic Materials DJ US, IYM
-0.15% Foreign LargeCap EAFE MSCI iS, EFA
-0.16% European VIPERs, VGK
-0.16% Emerging 50 BLDRS, ADRE
-0.17% Netherlands Index, EWN
-0.17% EMU Europe Index, EZU
-0.19% SmallCap Blend EAFE MSCI iS, SCZ
-0.19% Materials SPDR, XLB
-0.22% Oil, Crude, U.S. Oil Fund, USO
-0.28% Germany Index, EWG
-0.29% South Africa Index, EZA
-0.37% Europe 350 S&P Index, IEV
-0.38% Indonesia MV, IDX
-0.45% Commodity Tracking, DBC
-0.47% WilderHill Clean Energy PS, PBW
-0.47% United Kingdom Index, EWU
-0.48% France Index, EWQ
-0.52% Metals & Mining SPDR, XME
-0.56% Oil Fund PowerShares, DBO
-0.56% China 25 iS, FXI
-0.56% Chile MSCI iS, ECH
-0.65% Bear, Short S&P 500, SH
