S&P 500 Composite (SPX, 1,278.36) rose 6.86 points or 0.54% on Monday 6/20/11. All of the gain occurred in the morning, and stocks stalled out after noon. Small counter trend fluctuations do not change the clear intermediate-term downtrend. SPX fell below 3-month lows last Thursday, confirming a significant downtrend.
Volume on the NYSE fell 29% below Friday’s pace and 23% below the 200-day SMA to one of the lowest levels of the year 2011. This suggests that the price rise failed to attract a strong following.
NASDAQ Composite/S&P 500 Relative Strength Ratio fell below 8-month lows on 6/20/11.
Crude Oil nearest futures contract price broke down below the lows of the past 4 months on 6/20/11, confirming a significant downtrend.
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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
0.86% , PIV , Value Line Timeliness MidCap Gr, PIV
0.29% , FEU , Value LargeCap Euro STOXX 50 DJ, FEU
0.73% , KLD , LargeCap Blend Socially Responsible iS, KLD
0.83% , IXJ , Healthcare Global, IXJ
1.12% , HHH , Internet H, HHH
0.82% , IYC , Consumer Cyclical DJ, IYC
0.83% , PWV , Value LargeCap Dynamic PS, PWV
1.17% , PJP , Pharmaceuticals, PJP
0.16% , FPX , IPOs, First Tr IPOX-100, FPX
4.69% , ASH , ASHLAND
1.29% , PMR , Retail, PMR
0.63% , IWS , Value MidCap Russell, IWS
1.77% , LIZ , LIZ CLAIRBORNE
1.93% , BBH , Biotech H, BBH
1.84% , JNS , JANUS CAPITAL
0.90% , IYK , Consumer Non-Cyclical, IYK
0.73% , VDC , Consumer Staples VIPERs, VDC
0.88% , BHH , Internet B2B H, BHH
0.81% , ISIL , INTERSIL CORP
3.27% , IP , INTL PAPER
2.01% , YHOO , YAHOO
0.56% , FDV , Value 40 Large Low P/E FT DB, FDV
4.05% , BIIB , BIOGEN IDEC
0.76% , SDY , Dividend SPDR, SDY
1.53% , GR , GOODRICH CORP
0.77% , RPG , Growth S&P 500, RPG
1.58% , WM , WASTE MANAGEMENT
0.68% , XBI , Biotech SPDR, XBI
2.73% , CVG , CONVERGYS
0.73% , IXP , Telecommunications Global, IXP
0.27% , JKL , Value SmallCap iS M, JKL
1.30% , CCL , CARNIVAL STK A
2.67% , JWN , NORDSTROM
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.12% , PIN , India PS, PIN
-1.30% , KWT , Solar Energy MV, KWT
-1.20% , PXN , Nanotech Lux, PXN
-0.76% , EIS , Israel MSCI iS, EIS
-1.23% , TER , TERADYNE
-0.79% , MYY , Short 100% MidCap 400, MYY
-0.65% , DOG , Short 100% Dow 30, DOG
-1.60% , ESRX , EXPRESS SCRIPTS
-0.23% , EWQ , France Index, EWQ
-1.83% , NBR , NABORS
-1.96% , PNC , PNC FINL SVC
-0.36% , IEV , Europe 350 S&P Index, IEV
-1.13% , CECO , CAREER EDUCATION CORP
-0.58% , RKH , Bank Regional H, RKH
-0.59% , ERIC.O , LM Ericsson Telephone Company
-0.32% , PSI , Semiconductors, PSI
-0.16% , IAH , Internet Architecture H, IAH
-0.16% , GVI , Bond Interm U.S. Gov, GVI
-0.15% , VPL , Pacific VIPERs, VPL
-1.57% , AMD , ADV MICRO DEV
-0.47% , YUM , YUM BRANDS
-0.56% , ITW , ILLINOIS TOOL
-0.07% , DGT , Global Titans, DGT
-0.02% , IXN , Technology Global, IXN
-0.24% , HGSI , Human Genome Sciences Inc
-2.29% , RIG , TRANSOCEAN
-0.08% , EFG , Growth EAFE MSCI, EFG
-0.53% , BK , BANK OF NEW YORK
-1.54% , AAPL , APPLE COMPUTER
-0.73% , SCZ , Small Cap EAFE MSCI iS, SCZ
-0.58% , EFX , EQUIFAX
-0.35% , SEE , SEALED AIR
-0.07% , TLH , Bond 10-20 Year US Treas, TLH
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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, 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.
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 5 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 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 stabilized on 6/20/11. 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. These bearish divergence warnings are still in effect.
S&P 500 Composite (SPX, 1,278.36) rose 6.86 points or 0.54% on Monday 6/20/11.
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
1294.70, low of 4/18/11
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
1.43% Homebuilders SPDR, XHB
1.21% REIT VIPERs, VNQ
1.20% REIT Wilshire, RWR
1.16% Realty Cohen & Steers, ICF
1.10% Metals & Mining SPDR, XME
1.06% Real Estate US DJ, IYR
1.01% SmallCap S&P 600, IJR
1.01% Health Care SPDR, XLV
0.97% Growth BARRA Small Cap 600, IJT
0.97% Value SmallCap S&P 600 B, IJS
0.97% Value SmallCap Russell 2000, IWN
0.95% Growth MidCap 400 B, IJK
0.95% Growth SmallCap R 2000, IWO
0.94% Silver Miners Global X, SIL
0.94% Value SmallCap VIPERS, VBR
0.92% SmallCap Russell 2000, IWM
0.91% Growth SmallCap VIPERs, VBK
0.88% Basic Materials DJ US, IYM
0.87% Industrial SPDR, XLI
0.87% Small Cap VIPERs, VB
0.85% MidCap S&P 400 iS, IJH
0.85% Materials SPDR, XLB
0.83% Value LargeCap Dynamic PS, PWV
0.82% Consumer Discretionary SPDR, XLY
0.81% MidCap S&P 400 SPDRs, MDY
0.78% Transportation Av DJ, IYT
0.76% Dividend SPDR, SDY
0.75% Consumer Staples SPDR, XLP
0.75% Value MidCap S&P 400 B, IJJ
0.75% Dividend Appreciation Vipers, VIG
0.75% Dividend DJ Select, DVY
0.74% Growth MidCap Russell, IWP
0.70% Bond, High-Yield Corporate, HYG
0.70% Dividend High Yield Equity PS, PEY
0.69% MidCap Russell, IWR
0.68% LargeCap Blend S&P=Weight R, RSP
0.68% Biotech SPDR, XBI
0.67% DIAMONDS (DJIA), DIA
0.63% Value MidCap Russell, IWS
0.61% Latin Am 40, ILF
0.60% Growth 1000 Russell, IWF
0.58% Growth VIPERs, VUG
0.58% Utilities SPDR, XLU
0.57% Growth S&P 500/BARRA, IVW
0.55% Microcap Russell, IWC
0.55% LargeCap VIPERs, VV
0.55% S&P 500 iS LargeCap Blend, IVV
0.53% Utilities VIPERs, VPU
0.52% LargeCap 1000 R, IWB
0.52% QQQ Nasdaq 100 Trust, QQQ
0.51% S&P 500 SPDRs LargeCap Blend, SPY
0.51% South Africa Index, EZA
0.51% Brazil Index, EWZ
0.50% LargeCap Blend Russell 3000, IWV
0.50% Telecom DJ US, IYZ
0.50% Value S&P 500 B, IVE
0.49% Mexico Index, EWW
0.47% Blend Total Market VIPERs, VTI
0.45% Singapore Index, EWS
0.42% LargeCap Blend S&P 100, OEF
0.42% Value VIPERs, VTV
0.40% Agriculture DB PS, DBA
0.40% Silver Trust iS, SLV
0.40% Technology SPDR, XLK
0.39% Dividend International, PID
0.38% Value 1000 Russell, IWD
0.37% Info Tech VIPERs, VGT
0.31% Frontier Markets Guggenheim , FRN
0.30% Germany Index, EWG
0.30% Switzerland Index, EWL
0.30% Canada Index, EWC
0.28% Bond, High-Yield Junk, JNK
0.28% Technology DJ US, IYW
0.27% Energy SPDR, XLE
0.27% Energy DJ, IYE
0.25% Oil, Crude, U.S. Oil Fund, USO
0.21% Oil Fund PowerShares, DBO
0.21% China LargeCap Growth G D H USX PS, PGJ
0.20% Energy VIPERs, VDE
0.19% Global 100, IOO
0.17% United Kingdom Index, EWU
0.16% Financials VIPERs, VFH
0.14% Capital Markets KWB ST, KCE
0.13% Semiconductor iS IGW, SOXX
0.12% Energy Global, IXC
0.12% Bond, 20+ Years Treasury, TLT
0.11% Water Resources, PHO
0.10% Japan Index, EWJ
0.09% Emerging 50 BLDRS, ADRE
0.09% Preferred Stock iS, PFF
0.07% Chile MSCI iS, ECH
0.06% Gold Shares S.T., GLD
0.05% Financial DJ US, IYF
0.03% Bond Muni ATM-Free S&P iS, MUB
0.02% Energy & Nat Res iS GS, IGE
0.02% Bond, Corp, LQD
0.02% Bond Ex-US Treas, BWX
0.01% Bond Treasury Short-Term iS, SHV
0.00% Networking, IGN
0.00% Bond, 1-3 Year Treasury, SHY
-0.04% Bond EmrgMkt JPM iS, EMB
-0.07% Global ex US ACWI iS, ACWX
-0.07% Financial SPDR, XLF
-0.08% Semiconductor SPDR, XSD
-0.08% Growth EAFE MSCI, EFG
-0.12% WilderHill Clean Energy PS, PBW
-0.12% EAFE Index, EFA
-0.13% Bond, Aggregate, AGG
-0.15% Pacific VIPERs, VPL
-0.15% Emerging Markets, EEM
-0.15% Bond, 10 Year Treasury, IEF
-0.17% Financial Preferred, PGF
-0.17% Value EAFE MSCI, EFV
-0.23% France Index, EWQ
-0.26% Financial Services DJ, IYG
-0.27% Bond, TIPS, TIP
-0.28% Emerging VIPERs, VWO
-0.31% China 25 iS, FXI
-0.32% EMU Europe Index, EZU
-0.33% Indonesia MV, IDX
-0.33% Malaysia Index, EWM
-0.35% European VIPERs, VGK
-0.35% Belgium Index, EWK
-0.36% Europe 350 S&P Index, IEV
-0.40% Thailand MSCI iS, THD
-0.42% Netherlands Index, EWN
-0.55% Commodity Tracking, DBC
-0.58% South Korea Index, EWY
-0.63% Pacific ex-Japan, EPP
-0.66% Russia MV, RSX
-0.67% Taiwan Index, EWT
-0.71% Australia Index, EWA
-0.73% Small Cap EAFE MSCI iS, SCZ
-0.77% Spain Index, EWP
-0.80% Italy Index, EWI
-0.83% Sweden Index, EWD
-0.85% Turkey MSCI iS, TUR
-0.90% Austria Index, EWO
-1.26% Hong Kong Index, EWH
-1.93% India Earnings WTree, EPI
-2.12% India PS, PIN
