Crude Oil, United States Oil ETF (USO) rose above its highs of the previous 3 months on 8/17/12. Crude Oil, United States Oil ETF (USO) rose above its highs of the previous 3 months on 8/17/12. Israeli media reports suggested that Israel could attack Iranian nuclear facilities ahead of U.S. presidential elections in November.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) turned systematically bearish again on 8/17/12, when it fell below its 50-day SMA.
The S&P 500 (SPX: 1,418.16) rose 2.65 points or 0.19% on Friday to its highest level since 4/3/12.
SPX has recovered nearly all of its April-June drop and is challenging the highs of the year.
The Dow-Jones Industrials are close to their highs of the year, but the Transports continue to lag well below their highs, thereby demonstrating a bearish divergence.
Stock price indexes appear “overbought” or “extended” at 2% to 3% above 20-day EMAs.
Momentum oscillators turned upward, but the shorter, faster ones still failed to rise above their June-July highs to confirm the S&P 500 rise above its June-July highs.
The number of stocks making new highs is a fraction of July’s peak numbers.
NYSE volume fell 7% on Friday and was is 23% 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. 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.
With the stock price indexes far above their 4-year lows and 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.
For extensive coverage of major global markets with illustrative charts, take a free trial for my weekly report —
click here.
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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. Currently, the Industrials are very close to their highs of the year, but the Transports continue to lag well below their highs, thereby demonstrating a bearish divergence.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) rose above its 50-day SMA on 8/6/12, thereby turning systematically bullish again. QQQ/SPY remains above its 200-day SMA, and its 50-day SMA has been above its 200-day SMA since 8/5/11.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 3 years on 7/23/12, reconfirming its bearish trend. Short term, BKF/SPY turned systematically bearish again on 8/14/12, when it fell below its 50-day SMA. BKF/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/13/11.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below its lows of the previous 3 years on 7/23/12, reconfirming its bearish trend. EEM/SPY turned systematically bearish again on 8/17/12, when it fell below its 50-day SMA. EEM/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 2/3/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) reconfirmed a bearish major trend when it fell below its lows of the previous 9 years on 7/24/12. EFA/SPY turned systematically neutral 8/3/12 when it rose above its 50-day SMA. EFA/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/14/11.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) rose above its highs of the previous 2 years on 7/31/12, thereby reconfirming its preexisting major bullish trend. OEF/SPY remains systematically bullish above its 50-day SMA, above its 200-day SMA, and the 50-day SMA has been above the 200-day SMA consistently every day since 8/24/11. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative safety of large size. On the other side of the coin, Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors prefer riskier and more volatile stocks.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below its lows of the previous 10 months on 8/1/12, thereby confirming its major downtrend. Systematically, the IWM/SPY ratio remains bearish: below its 50-day SMA, below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA consistently every day since 4/20/12.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below its lows of the previous 10 months on 8/1/12, thereby confirming its major downtrend. Short term, MDY/SPY rose above its 50-day SMA on 8/17/12, thereby turning systematically neutral. 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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Sentiment for Contrary Thinking
AAII Sentiment shows that individual investors are bullish. As of 8/16/12, there were 36.84% Bulls and 28.07% Bears.
Investors Intelligence Sentiment shows that stock market newsletter advisors are bullish. As of 8/15/12, there were 43.6% Bulls and 26.6% Bears.
VIX Fear Index fell to 13.30 intraday on 8/17/12, its lowest level in more than 5 years, since 6/20/07. VIX fell from an intraday peak of 27.73 on 6/4/12. This large drop suggests a shift from worried concern to bullish complacency. 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 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
1422.38, high of 4/2/2012
1418.71, high of 8/17/2012
The S&P 500 Composite Potential Support
1415.32, high of 5/1/2012
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
1363.49, high of 6/19/2012
1362.93, Fibonacci 61.8% of April-June 2012 range
1361.23, 50-day SMA
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
1330.20, 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) fell below its 50-day SMA on 8/3/12, turning systematically neutral. UUP remains above its 200-day SMA, and its 50-day SMA has stayed above its 200-day SMA every day since 10/26/11. Support 22.38, 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) looks to be consolidating short term, since peaking at 30.44 on 7/30/12. DBA is 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) rose above its highs of the previous 3 months on 8/17/12. 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 50-day SMA on 8/3/12, thereby turning systematically neutral. GLD remains below its 200-day SMA, and its 50-day SMA has stayed below its 200-day SMA every day since 4/17/12. Support: 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 159.20, 162.18, 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 again. 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 whipsawed back above its 50-day SMA on 8/3/12, thereby turning systematically neutral again for the short term. SLV remains below its 200-day SMA, and its 50-day SMA has remained below the 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: 27.48, 27.60, 27.98, 28.26, 29.02, 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) fell below its lows of the previous 20 months on 6/28/12, reconfirming its major downtrend. Short term, SLV/GLD turned systematically neutral again when it rose above its 50-day SMA on 8/17/12. 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 8/17/12, 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
5.05% , SJM , J. M. Smucker
5.10% , JNY , JONES APPAREL
4.97% , ODP , OFFICE DEPOT
4.85% , RL , Polo Ralph Lauren
4.80% , GPS , GAP
2.86% , CROX , CROCS Inc., CROX
0.79% , BMS , BEMIS
3.96% , RSH , RADIOSHACK
2.44% , ZION , ZIONS
0.49% , EZU , EMU Europe Index, EZU
1.73% , TIF , TIFFANY
0.16% , ADRD , Developed 100 BLDRS, ADRD
2.16% , VIAB.O , VIACOM STK B
0.37% , PIC , Insurance, PIC
1.85% , AAPL , APPLE COMPUTER
1.64% , EMN , EASTMAN CHEM
1.46% , VMC , VULCAN MATERIALS
2.38% , R , RYDER SYSTEM
0.23% , RFV , Value MidCap S&P 400, RFV
2.45% , ERIC.O , LM Ericsson Telephone Company
1.36% , GPC , GENUINE PARTS
3.71% , RFMD , RF Micro Devices Inc
2.26% , WOR , WORTHINGTON INDS
0.75% , PKB , Building & Construction, PKB
1.60% , CAT , CATERPILLAR
1.36% , URBN , Urban Outfitters Inc.
1.17% , CB , CHUBB
1.49% , OMC , OMNICOM
1.59% , HP , Helmerich & Payne HP
0.32% , SCZ , Small Cap EAFE MSCI iS, SCZ
0.88% , BAC , BANK OF AMERICA
2.03% , UTX , UNITED TECH
1.23% , BC , BRUNSWICK
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-14.17% , MRVL , MARVELL TECHNOLOGY
-2.54% , MCK , MCKESSON CORP
-2.65% , EZA , South Africa Index, EZA
-1.19% , BIIB , BIOGEN IDEC
-1.37% , MRK , MERCK & CO
-1.09% , LBTYA , Liberty Global Inc. (LBTYA)
-0.83% , EWS , Singapore Index, EWS
-0.70% , EWT , Taiwan Index, EWT
-0.11% , IOO , Global 100, IOO
-1.40% , HES , AMERADA HESS
-0.77% , PMTC.O , PARAMETRIC
-0.46% , RYAAY , Ryanair Holdings plc
-1.43% , SWY , SAFEWAY
-1.10% , BMY , BRISTOL MYERS
-0.77% , ABT , ABBOTT LABS
-1.00% , WLP , WELLPOINT HEALTH
-0.96% , PFE , PFIZER
-0.49% , XRAY , DENTSPLY International Inc
-1.06% , NWSA , News Corporation, NWSA
-0.77% , LLY , ELI LILLY
-0.39% , IYH , Healthcare DJ, IYH
-0.96% , NFLX , Netflix, NFLX
-0.77% , SIAL , SIGMA ALDRICH
-0.66% , MSI , Motorola Solutions, MSI
-0.52% , INTU , INTUIT
-0.46% , RSX , Russia MV, RSX
-0.46% , HSY , HERSHEY FOODS
-0.98% , INTC , INTEL
-0.30% , USB , US BANCORP
-0.89% , APC , ANADARKO PETRO
-0.21% , FDL , Dividend Leaders, FDL
-0.55% , DISCA , Discovery Communications
-0.52% , XLV , Health Care SPDR, XLV
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.54% Sweden Index, EWD
1.47% Homebuilders SPDR, XHB
1.40% Spain Index, EWP
1.37% Austria Index, EWO
1.24% Chile MSCI iS, ECH
1.10% Oil, Crude, U.S. Oil Fund, USO
0.96% Italy Index, EWI
0.95% SmallCap Value S&P 600 iS, IJS
0.90% Microcap Russell, IWC
0.83% Growth SmallCap VIPERs, VBK
0.82% SmallCap Growth Russell 2000 iS, IWO
0.82% SmallCap Growth S&P 600 iS, IJT
0.81% SmallCap Value Russell 2000 iS, IWN
0.76% Japan Index, EWJ
0.74% Oil Fund PowerShares, DBO
0.74% SmallCap Blend S&P 600 iS, IJR
0.74% Technology DJ US, IYW
0.70% SmallCap Blend Russell 2000 iS, IWM
0.63% Info Tech VIPERs, VGT
0.63% Small Cap VIPERs, VB
0.62% Value SmallCap VIPERS, VBR
0.60% Networking, IGN
0.57% Telecom DJ US, IYZ
0.57% Frontier Markets Guggenheim , FRN
0.57% Germany Index, EWG
0.56% Technology SPDR, XLK
0.54% Agriculture DB PS, DBA
0.52% Water Resources, PHO
0.49% MidCap Growth S&P 400 iS, IJK
0.49% MidCap Value S&P 400 iS, IJJ
0.49% Bond, 20+ Years Treasury, TLT
0.49% Industrial SPDR, XLI
0.49% EMU Europe Index, EZU
0.47% Hong Kong Index, EWH
0.47% WilderHill Clean Energy PS, PBW
0.45% MidCap Blend S&P 400 iS, IJH
0.44% Netherlands Index, EWN
0.44% Growth MidCap Russell, IWP
0.44% QQQ Nasdaq 100 Trust, QQQ
0.43% MidCap S&P 400 SPDRs, MDY
0.42% Transportation Av DJ, IYT
0.41% Metals & Mining SPDR, XME
0.39% Pacific VIPERs, VPL
0.38% Consumer Discretionary SPDR, XLY
0.35% Dividend Appreciation Vipers, VIG
0.35% Financials VIPERs, VFH
0.33% Financial SPDR, XLF
0.33% Dividend SPDR, SDY
0.32% SmallCap Blend EAFE MSCI iS, SCZ
0.31% Dividend High Yield Equity PS, PEY
0.31% Value MidCap Russell, IWS
0.31% MidCap Russell, IWR
0.31% Growth VIPERs, VUG
0.30% LargeCap Growth Russell 1000 iS, IWF
0.27% Value EAFE MSCI, EFV
0.26% Financial Preferred, PGF
0.25% Capital Markets KWB ST, KCE
0.25% Belgium Index, EWK
0.25% Financial DJ US, IYF
0.24% Financial Services DJ, IYG
0.22% Canada Index, EWC
0.21% Dividend U.S. DJ iS, DVY
0.20% Growth EAFE MSCI, EFG
0.19% LargeCap Blend S&P=Weight R, RSP
0.19% Blend Total Market VIPERs, VTI
0.19% LargeCap VIPERs, VV
0.18% LargeCap Blend Russell 1000 iS, IWB
0.18% Preferred Stock iS, PFF
0.17% LargeCap Blend Russell 3000 iS, IWV
0.16% LargeCap Blend S&P 500 iS, IVV
0.16% LargeCap Growth S&P 500 iS, IVW
0.14% Commodity Tracking, DBC
0.14% Biotech SPDR, XBI
0.14% LargeCap Blend S&P 100, OEF
0.14% Bond, Long-Term Corp iBoxx iS, LQD
0.13% Bond, TIPS U.S. Treasury iS, TIP
0.13% Foreign LargeCap EAFE MSCI iS, EFA
0.13% S&P 500 SPDRs LargeCap Blend, SPY
0.12% Bond, 10 Year Treasury, IEF
0.12% Bond, Intermediate US Aggregate iS, AGG
0.11% REIT Wilshire, RWR
0.10% Gold Shares S.T., GLD
0.09% European VIPERs, VGK
0.09% Bond, Muni S&P ATM-Free iS, MUB
0.08% Europe 350 S&P Index, IEV
0.08% Consumer Staples SPDR, XLP
0.08% Mexico Index, EWW
0.08% LargeCap Value S&P 500 iS, IVE
0.07% Dividend International, PID
0.05% Bond, High-Yield Junk, JNK
0.04% Turkey MSCI iS, TUR
0.03% Value VIPERs, VTV
0.03% REIT VIPERs, VNQ
0.03% Global ex U.S. LargeCap Blend, ACWX
0.02% Global LargeCap Blend MSCI iS, ACWI
0.01% Bond, 1-3 Year Treasury, SHY
0.00% Value LargeCap Dynamic PS, PWV
0.00% Switzerland Index, EWL
0.00% LargeCap Value Russell 1000 iS, IWD
0.00% Bond, High Yield Corp iBoxx iS, HYG
0.00% Bond Treasury Short-Term iS, SHV
-0.01% Realty Cohen & Steers, ICF
-0.03% Bond, Emerg Mkt JPM iS, EMB
-0.03% Basic Materials DJ US, IYM
-0.04% Energy SPDR, XLE
-0.05% Real Estate US DJ iS, IYR
-0.06% Dividend ex-U.S. DJ iS, IDV
-0.06% Semiconductor SPDR, XSD
-0.08% Energy & Nat Res iS GS, IGE
-0.08% Bond Ex-US Treas, BWX
-0.11% DIAMONDS (DJIA), DIA
-0.11% Energy DJ, IYE
-0.11% Global 100, IOO
-0.12% United Kingdom Index, EWU
-0.13% Energy Global, IXC
-0.14% Materials SPDR, XLB
-0.14% Latin Am 40, ILF
-0.14% Bear, Short S&P 500, SH
-0.14% France Index, EWQ
-0.15% Utilities VIPERs, VPU
-0.21% Indonesia MV, IDX
-0.21% Energy VIPERs, VDE
-0.23% Pacific ex-Japan, EPP
-0.23% Emerging 50 BLDRS, ADRE
-0.23% India Earnings WTree, EPI
-0.23% Brazil Index, EWZ
-0.27% Utilities SPDR, XLU
-0.29% Australia Index, EWA
-0.34% Malaysia Index, EWM
-0.35% China 25 iS, FXI
-0.41% India PS, PIN
-0.46% Russia MV, RSX
-0.49% Emerging Markets MSCI iS, EEM
-0.51% Silver Trust iS, SLV
-0.52% Health Care SPDR, XLV
-0.54% China LargeCap Growth G D H USX PS, PGJ
-0.55% Emerging VIPERs, VWO
-0.70% Taiwan Index, EWT
-0.72% Semiconductor iS IGW, SOXX
-0.83% Singapore Index, EWS
-0.93% South Korea Index, EWY
