iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) rose to its highest level in 8 months on 8/11/14, thereby reconfirming its preexisting uptrend.
Technology stock sector ETF (XLK) absolute price rose above its 50-day SMA on 8/11/14, thereby turning systematically bullish (from neutral).
The S&P 500 Composite Index (SPX: 1,936.91, up 0.28%) absolute price opened higher on an upside gap. SPX worked higher for nearly two hours, rising above the intraday highs of the previous 6 trading days, before reversing and surrendering most of the early gains. SPX closed below the (true) open, below the midpoint of the day’s high-low range, but above the closing prices of the previous 4 trading days.
NYSE total volume fell 3% to a level 15% below its 200-day SMA. Generally, rising volume confirms the direction (up or down) of a price move, but falling volume may indicate diminishing power behind a price trend, which can suggest a price reversal ahead. Volume can provide insights that are not available from the majority of indicators, which are based on price.
The Friday-Monday price rebound on declining volume reveals traders’ relative reluctance to risk going long stocks. Over the past few weeks, during the stock price downtrend, volume again was heavier on days when prices fell and lighter on days when prices rose. In the past, that has been a sign that the downmove probably will continue.
Momentum is a leading indicator of price change, and failing price momentum is often followed by a down move for price. Short-term momentum oscillators RSI and MACD based on the SPX broke down to their lowest levels in more than 6 months on 8/7/14 , thereby confirming their preexisting downtrends. Both turned down on 7/7/14, after failing to match their highs of 6/10/14–despite higher highs for the S&P 500 Index on which these oscillators are based. Furthermore, these same momentum oscillators consistently have remained below their highs of 2012 and 2013, despite much higher highs in the S&P 500 itself in 2014. Therefore, both oscillators have continued to demonstrate bearish divergence compared to the price of the underlying index, the S&P 500.
The Number of Daily Net New Highs on the NYSE (New Highs minus New Lows), now at +94, has been running below its peaks above +800 recorded in 2012 and 2013, when the S&P 500 was lower than it is now. So, this indicator still is diverging bearishly relative to last year’s levels.
Stock market sentiment indicators have been at excessive, multiyear high levels of bullishness (which is bearish), bearish momentum divergences have been accumulating, and there is a tendency for low trading volume on up days and rising trading volume on down days (generally, not always), suggesting distribution. These are challenges to a sustainable upside trend that the stock market has been ignoring for months.
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Stock Market Indicators
The Dow Theory entered a Secondary Reaction to the downside, as the Dow-Jones Industrial Average and the Dow-Jones Transportation Average made lower highs and lower lows for more than 3 weeks. Such a downside correction can last several months. Although not part of the Dow Theory, all 3 Dow-Jones Averages (Industrial, Transportation, and Utility) crossed below their 50-day SMAs on 7/31/14, thereby demonstrating price weakness by separate objective method.
NASDAQ 100 ETF/S&P 500 ETF Relative Strength Ratio (QQQ/SPY) rose above its highs of the previous 13 years on 8/7/14 and remains systematically bullish. The absolute price of QQQ rose to a 13-year closing price high on 7/23/14 and held its 50-day SMA during the recent minor pullback. The price 50-day SMA crossed above the 200-day SMA on 1/28/13, thereby turning systematically bullish (from neutral).
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) rose to its highest level in 8 months on 8/11/14, thereby reconfirming its preexisting uptrend. This RS ratio’s rising 50-day SMA crossed above the falling 200-day SMA on 8/1/14, thereby turning systematically bullish (from neutral).
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) has been systematically neutral most of the time since making a low on 3/13/14. Absolute price is systematically neutral.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) broke down below its lows of the previous 2 years on 8/8/14. EFA/SPY has remained systematically bearish most of the time over the past 6 years.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) rose above its highs of the previous 6 months on 7/29/14 but remains systematically neutral, with 50-day SMA still below the 200-day SMA. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative stability and safety of large size. On the other hand, Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors seek greater potential returns in more volatile, smaller stocks.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below its lows of the previous 20 months on 7/28/14, thereby reconfirming its preexisting bearish trend. IWM/SPY 50-day SMA crossed below the 200-day SMA on 4/29/14, thereby turning systematically bearish (from neutral). Absolute price has turned weak since it peaked at 120.97 on 7/1/14.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below its lows of the previous 19 months on 7/29/14, thereby reconfirming its preexisting bearish trend. MDY/SPY 50-day SMA crossed below the 200-day SMA on 5/9/14, thereby turning systematically bearish (from neutral). Absolute price has turned weak since it peaked at 264 on 7/1/14.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) absolute price rose above its highs of the previous 4 months on 8/5/14. UUP is currently systematically neutral, but the 50-day SMA is rising up toward the 200-day SMA, such that a bullish crossover may be possible in weeks ahead if price rises further. Support 21.07 and 20.84. Resistance 21.96, 22.34, 22.98, 23.14, 23.52, 25.84, 27.19, and 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) absolute price broke down below its lows of the previous 5 months on 7/11/14. DBA crossed below its 50-day SMA on 5/9/14, thereby turning systematically neutral (from bullish).
Crude Oil, United States Oil ETF (USO) absolute price fell to its lowest price level in 4 months on 8/7/14, thereby reconfirming its preexisting medium-term downside correction. Price remains systematically neutral. Long term, USO has been in a neutral/sideways trend since bottoming at 22.74 on 2/19/09. Support 35.62, 34.97, 34.00, 32.68, 32.12, 30.79, 29.02, 26.28, and 22.74. Resistance 36.58, 38.30, 39.54, 39.64, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) absolute price appears to be base building since hitting a bottom at 114.46 on 12/31/13. GLD appears to be in neutral trading range, with the GLD price crisscrossing its 50-day and 200-day SMAs for several months. Long term, GLD has been in a neutral/sideways trend since bottoming at 114.46 on 12/31/13. Support: 119.42, 114.46, 113.08, and 102.28. Resistance: 129.21, 133.69, 137.62, 143.43, 149.44, 153.85, 156.80, 164.40, 166.94, 170.01, 174.07, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) rose above its highs of the previous 11 months on 7/28/14 and remains systematically bullish. Absolute price rose above its highs of the previous 4 months on 7/9/14 and remains systematically bullish.
Silver, iShares Silver Trust ETF (SLV) absolute price fell below its lows of the previous 6 weeks and fell below its 50-day and 200-day SMAs on 8/4/14, thereby turning systematically bearish (from neutral). Long term, SLV has been in a neutral/sideways trend since bottoming at 17.75 on 4/27/13. Support 17.75, 16.73, 14.37, 12.27, 11.64, and 8.45. Resistance: 20.64, 21.30, 22.23, 23.84, 25.34, 27.14, 27.35, 28.50, 28.61, 29.73, 31.41, 32.72, 33.31, 34.08, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) fell below its lows of the previous 8 weeks on 8/7/14, again confirming a downside correction. The 50-200 SMA remains negative, with 50Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price fell below its lows of the previous 6 weeks on 8/6/14, thereby suggesting a medium-term downtrend. Long term, JJC has been in a downtrend since topping at 61.69 on 2/14/11. “Dr. Copper” is widely accepted as one of the better indicators of investor confidence (or lack thereof) in the global industrial economy.
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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
0.79% , VDC , Consumer Staples VIPERs, VDC
0.75% , IGV , Software, IGV
2.56% , PGJ , China LargeCap Growth G D H USX PS, PGJ
1.29% , PMCS , PMC SIERRA
0.67% , IYW , Technology DJ US, IYW
2.14% , LXK , LEXMARK INTL STK A
0.42% , PWB , Lg Cap Growth PSD, PWB
0.71% , XLP , Consumer Staples SPDR, XLP
0.94% , IJS , Value SmallCap S&P 600 B, IJS
1.52% , CAG , CONAGRA FOODS
2.35% , JCP , JC PENNEY
0.47% , IYZ , Telecom DJ US, IYZ
1.14% , EWD , Sweden Index, EWD
2.57% , WYN , Wyndham Worldwide
3.83% , CLF , CLIFFS NATURAL RESOURCES, CLF
0.71% , RFG , Growth MidCap S&P 400, RFG
1.82% , EWW , Mexico Index, EWW
0.91% , SOXX , Semiconductor iS IGW, SOXX
1.35% , XME , Metals & Mining SPDR, XME
0.45% , VCR , Consumer D. VIPERs, VCR
0.39% , PFM , Dividend Achievers PS, PFM
0.56% , PHO , Water Resources, PHO
1.45% , RL , Polo Ralph Lauren
0.91% , IJT , Growth BARRA Small Cap 600, IJT
0.18% , VFH , Financials VIPERs, VFH
1.03% , CR , CRANE
1.62% , CVG , CONVERGYS
0.67% , VGT , Info Tech VIPERs, VGT
1.83% , KSU , Kansas City Southern, KSU
0.93% , CTAS , CINTAS
0.78% , IWN , Value SmallCap Russell 2000, IWN
0.39% , VPL , Pacific VIPERs, VPL
0.52% , ACWX , Global ex US ACWI iS, ACWX
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Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-3.23% , TUR , Turkey MSCI iS, TUR
-0.66% , TMK , TORCHMARK
-1.21% , KEY , KEYCORP
-1.12% , JWN , NORDSTROM
-1.29% , AES , AES
-0.36% , XEL , XCEL ENERGY
-0.18% , CL , COLGATE
-0.01% , SHV , Bond Treasury Short-Term iS, SHV
-0.45% , VMC , VULCAN MATERIALS
-0.42% , HBAN , HUNTINGTON
-0.45% , DV , DeVry, Inc.
-1.50% , DDS , DILLARD STK A
-0.16% , BK , BANK OF NEW YORK
-0.09% , XL , XL CAPITAL STK A
-0.10% , XLB , Materials SPDR, XLB
-0.05% , GVI , Bond Interm U.S. Gov, GVI
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.56% , China LargeCap Growth G D H USX PS, PGJ
2.43% , Indonesia MV, IDX
2.24% , South Africa Index, EZA
2.15% , Brazil Index, EWZ
2.10% , Latin Am 40, ILF
2.04% , WilderHill Clean Energy PS, PBW
1.82% , Mexico Index, EWW
1.73% , Biotech SPDR, XBI
1.55% , Emerging 50 BLDRS, ADRE
1.44% , Emerging VIPERs, VWO
1.43% , Russia MV, RSX
1.39% , Semiconductor SPDR, XSD
1.36% , China 25 iS, FXI
1.35% , Metals & Mining SPDR, XME
1.29% , Chile MSCI iS, ECH
1.28% , Emerging Markets MSCI iS, EEM
1.24% , India Earnings WTree, EPI
1.14% , Sweden Index, EWD
1.10% , SmallCap Growth Russell 2000 iS, IWO
1.01% , Microcap Russell, IWC
0.99% , Agriculture DB PS, DBA
0.95% , Thailand MSCI iS, THD
0.95% , SmallCap Blend Russell 2000 iS, IWM
0.95% , Netherlands Index, EWN
0.95% , Canada Index, EWC
0.94% , SmallCap Value S&P 600 iS, IJS
0.94% , Japan Index, EWJ
0.91% , Semiconductor iS IGW, SOXX
0.91% , SmallCap Growth S&P 600 iS, IJT
0.89% , Growth SmallCap VIPERs, VBK
0.87% , Singapore Index, EWS
0.85% , SmallCap Blend S&P 600 iS, IJR
0.83% , Networking, IGN
0.83% , Hong Kong Index, EWH
0.79% , Transportation Av DJ, IYT
0.78% , SmallCap Value Russell 2000 iS, IWN
0.78% , SmallCap Blend EAFE MSCI iS, SCZ
0.76% , Taiwan Index, EWT
0.75% , India PS, PIN
0.74% , Small Cap VIPERs, VB
0.71% , Consumer Staples SPDR, XLP
0.69% , Dividend International, PID
0.67% , Info Tech VIPERs, VGT
0.67% , Technology DJ US, IYW
0.67% , Belgium Index, EWK
0.66% , REIT Wilshire, RWR
0.63% , REIT VIPERs, VNQ
0.60% , Value SmallCap VIPERS, VBR
0.60% , Germany Index, EWG
0.59% , QQQ Nasdaq 100 Trust, QQQ
0.57% , Malaysia Index, EWM
0.57% , MidCap Growth S&P 400 iS, IJK
0.56% , Realty Cohen & Steers, ICF
0.56% , Water Resources, PHO
0.55% , Real Estate US DJ iS, IYR
0.54% , Growth MidCap Russell, IWP
0.52% , Global ex U.S. LargeCap Blend, ACWX
0.51% , LargeCap Growth Russell 1000 iS, IWF
0.51% , Capital Markets KWB ST, KCE
0.51% , Growth EAFE MSCI, EFG
0.50% , United Kingdom Index, EWU
0.49% , Bond, High-Yield Junk, JNK
0.49% , Technology SPDR, XLK
0.47% , Bond, High Yield Corp iBoxx iS, HYG
0.47% , Telecom DJ US, IYZ
0.46% , Growth VIPERs, VUG
0.45% , Consumer Discretionary SPDR, XLY
0.44% , MidCap S&P 400 SPDRs, MDY
0.44% , MidCap Blend S&P 400 iS, IJH
0.43% , MidCap Russell, IWR
0.40% , Industrial SPDR, XLI
0.40% , Austria Index, EWO
0.39% , Pacific VIPERs, VPL
0.38% , Foreign LargeCap EAFE MSCI iS, EFA
0.38% , LargeCap Blend Russell 3000 iS, IWV
0.38% , LargeCap Growth S&P 500 iS, IVW
0.37% , LargeCap Blend Russell 1000 iS, IWB
0.36% , Dividend SPDR, SDY
0.36% , Blend Total Market VIPERs, VTI
0.36% , Dividend Appreciation Vipers, VIG
0.36% , Global LargeCap Blend MSCI iS, ACWI
0.32% , Energy Global, IXC
0.32% , Dividend High Yield Equity PS, PEY
0.32% , South Korea Index, EWY
0.32% , Pacific ex-Japan, EPP
0.32% , Value MidCap Russell, IWS
0.31% , LargeCap Blend S&P 100, OEF
0.31% , LargeCap Blend S&P 500 iS, IVV
0.29% , LargeCap Blend S&P=Weight R, RSP
0.29% , S&P 500 SPDRs LargeCap Blend, SPY
0.29% , MidCap Value S&P 400 iS, IJJ
0.28% , LargeCap VIPERs, VV
0.28% , Oil, Crude, U.S. Oil Fund, USO
0.27% , Dividend ex-U.S. DJ iS, IDV
0.26% , Homebuilders SPDR, XHB
0.25% , Value EAFE MSCI, EFV
0.22% , LargeCap Value Russell 1000 iS, IWD
0.22% , Financial DJ US, IYF
0.21% , Silver Trust iS, SLV
0.21% , Energy & Nat Res iS GS, IGE
0.20% , Bond, Emerging Mkt JPM iS, EMB
0.20% , LargeCap Value S&P 500 iS, IVE
0.20% , Value VIPERs, VTV
0.20% , Europe 350 S&P Index, IEV
0.20% , European VIPERs, VGK
0.18% , Global 100, IOO
0.18% , Financials VIPERs, VFH
0.17% , Financial Preferred, PGF
0.16% , Commodity Tracking, DBC
0.14% , Oil Fund PowerShares, DBO
0.14% , Dividend U.S. DJ iS, DVY
0.13% , DIAMONDS (DJIA), DIA
0.13% , Preferred Stock iS, PFF
0.13% , Energy VIPERs, VDE
0.12% , Switzerland Index, EWL
0.10% , Basic Materials DJ US, IYM
0.09% , Financial SPDR, XLF
0.05% , EMU Europe Index, EZU
0.05% , Financial Services DJ, IYG
0.04% , Bond, Long-Term Corp iBoxx iS, LQD
0.04% , Energy DJ, IYE
0.03% , Value LargeCap Dynamic PS, PWV
0.01% , Energy SPDR, XLE
0.01% , Bond, Intermediate US Aggregate iS, AGG
0.01% , Bond, TIPS U.S. Treasury iS, TIP
0.00% , Bond, 1-3 Year Treasury, SHY
0.00% , Bond Ex-US Treas, BWX
0.00% , Australia Index, EWA
-0.01% , Bond, 20+ Years Treasury, TLT
-0.01% , Bond Treasury Short-Term iS, SHV
-0.05% , Bond, 10 Year Treasury, IEF
-0.05% , Health Care SPDR, XLV
-0.06% , Bond, Muni S&P ATM-Free iS, MUB
-0.10% , Materials SPDR, XLB
-0.15% , France Index, EWQ
-0.18% , Gold Shares S.T., GLD
-0.26% , Italy Index, EWI
-0.29% , Utilities VIPERs, VPU
-0.30% , Bear, Short S&P 500, SH
-0.35% , Frontier Markets Guggenheim , FRN
-0.36% , Utilities SPDR, XLU
-0.58% , Spain Index, EWP
-3.23% , Turkey MSCI iS, TUR
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The S&P 500 Composite Potential Resistance
1991.39, high of 7/24/2014
1955.59, 50-day SMA
1952.86, low of 7/10/2014
The S&P 500 Composite Potential Support
1904.78, low of 8/7/2014
1902.17, high of 5/13/2014
1897.28, high of 4/4/2014
1863.71, 200-day SMA
1859.79, low of 5/7/2014
1850.61, low of 4/28/2014
1813.55, high of 11/29/2013
1737.92, low of 2/5/2014
1729.86, high of 9/19/2013
1711.57, high of 10/15/2013
1709.67, high of 8/2/2013
1703.85, high of 9/26/2013
1700.18, high of 8/8/2013
1698.78, high of 7/23/2013
1696.81, high of 8/13/2013
1696.55, high of 10/1/2013
1695.93, low of 10/15/2013
1687.18, high of 5/22/2013
1687.11, low of 9/27/2013
1676.03, low of 7/26/2013
1674.99, low of 9/30/2013
1672.40, high of 9/9/2013
1671.84, low of 7/16/2013
1670.36, low of 10/3/2013
1669.51, high of 8/26/2013
1654.19, high of 6/18/2013
1654.18, high of 7/9/2013
1652.61, low of 8/16/2013
1646.47, low of 10/9/2013
1629.05, low of 8/27/2013
1560.33, low of 6/24/2013
1536.03, low of 4/18/2013
1530.94, high of 2/19/2013
1485.01, low of 2/26/2013
1474.51, high of 9/14/2012
1451.64, low on 1/8/2013
1448.00, high of 12/19/2012
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1438.59, high of 12/12/2012
1434.27, high of 11/2/2012
1432.82, low of 12/20/2012
1430.53, low of 9/26/2012
1426.76, low of 12/12/2012
1425.53, low of 10/12/2012
1423.73, high of 12/3/2012
1422.58, low of 12/21/2012
1422.38, high of 4/2/2012
1422.06, low of 10/22/2012
1421.12, high of 10/25/2012
1420.34, high of 12/7/2012
1419.70, high of 11/29/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
1409.16, high of 11/23/2012
1403.28, low of 10/26/12
1401.58, low of 12/28/12
1398.11, low of 12/31/2012
1397.68, low of 11/26/2012
1396.56, low of 9/4/2012
1391.04, low of 8/6/2012
1388.71, low of 5/3/2012
1385.43, low of 11/28/2012
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1357.38, low of 4/10/2012
1343.35, low of 11/16/2012
1340.03, low of 3/6/2012
1335.52, high of 6/11/2012
1334.93, high of 5/31/2012
1329.24, low of 7/24/2012
1329.05, high of 6/7/2012
1328.49, high of 5/22/2012
1325.41, low of 7/12/2012
1306.62, low of 6/12/2012
1291.98, low of 5/18/2012
1266.74, low of 6/4/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1244.80, low of 12/7/2011
1239.73, low of 12/1/2011
1234.81, low of 11/3/2011
1231.04, high of 12/16/2011
1226.64, low of 11/9/2011
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1202.37, low of 12/19/2011
1158.66, low of 11/25/2011
1074.77, low of 10/4/2011
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
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
