On Friday, the S&P 500 Composite Index (SPX: 1,606.28) finished lower by 0.43%, after testing but failing to overcome resistance at its 50-day SMA, now at 1621.72.
The Cumulative Daily Advance-Decline Line on the NYSE recovered partially last week but remains below its 50-day SMA.
NYSE Volume rose 44% from Thursday’s level as the S&P 500 price fell. As old hands always say, “Volume goes with the trend,” or confirms the trend, so rising volume on a price decline is bearish. The Cumulative Up-Down Volume Line on the NYSE turned down on Friday and remained below its 50-day SMA the entire week.
On Tuesday, Wednesday and Thursday, the S&P 500 recovered more than a Fibonacci Ratio 38.2% but less than 50% of its recent decline from 5/22/13 to 6/24/13, based on intraday extreme prices. That would be a normal retracement for a weakish counter trend bounce on declining volume.
On Monday, 6/24/13, the S&P 500 fell to its lowest closing price in 8 weeks, since 4/22/13. It fell 5.76% from 5/21/13 to 6/24/13, based on closing prices–the largest down wave since last September-November. It also was the longest in time, lasting 24 trading days. The magnitude and duration of the price decline is probably telling us that this time is different from all previous minor price corrections since last November.
The bullish majority had been taking encouragement from the SPX and other major stock price indexes holding support at or near their widely-followed 50-day SMAs. Now that support has been violated, SPX could fall further to test its 200-day SMA, now at 1510.44 and rising a fraction of a point every day.
A wide variety of technical oscillators previously had given early warning after losing upside momentum and showing persistent bearish divergences over periods of weeks and months. Now, it seems quite apparent that there has been considerable technical damage to the previously bullish stock market trend. This damage probably signals a significant downside correction, or possibly worse. In any case, caution seems warranted.
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Stock Market Indicators
The Dow Theory confirmed a Secondary Reaction on 6/20-6/21/13, when the Dow-Jones Transportation Average and the Dow-Jones Industrial Average both closed below their price lows of the previous 7 weeks. Previously, on 5/28/13, the Dow Theory warned of a non-confirmation bearish divergence when the Industrial Average rose to a higher high without confirmation by the Transportation Average, which made a lower high. A Secondary Reaction is often significant in extent and duration, possibly retracing a substantial fraction of the previous move over a period lasting several months.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) is currently systematically neutral. QQQ/SPY has stabilized somewhat since 4/18/13. For a year before that, from 4/10/12 to 4/18/13, QQQ underperformed SPY. That downtrend could resume.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below the lows of the previous 4 years on 6/20/13, again reconfirming its major downtrend. BKF/SPY turned systematically bearish on 3/27/13, when the 50-day SMA crossed below the 200-day SMA. BKF/SPY fell below its 50-day SMA on 2/4/13 and fell below its 200-day SMA on 2/19/13. Price peaked at 42.29 on 2/1/13 and fell to a 20-month low on 6/24/13.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below the lows of the previous 4 years on 6/20/13, reconfirming its preexisting major downtrend. EEM/SPY turned systematically bearish on 3/20/13, when the 50-day SMA fell below the 200-day SMA. Price peaked at 45.34 on 1/2/13 and fell to a 19-month low on 6/24/13, confirming its bearish major trend.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below the lows of the previous 10 months on 6/27/13. The EFA/SPY 50-day SMA fell below the 200-day SMA on 5/24/13, thereby turning systematically bearish (from neutral).
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) is currently systematically bearish. OEF/SPY has been in a down trend since 9/24/12. 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) is currently systematically bullish. IWM/SPY has been rising since 5/1/13. Absolute price has sagged moderately lower since stalling out on 5/22/13.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) is currently systematically neutral. MDY/SPY fell below its lows of the previous 6 months on 6/21/13–an obvious sign of weakness. MDY/SPY has been trending lower since peaking on 3/20/13. Absolute price has stalled out since peaking on 5/22/13 and fell below its 50-day SMA on 6/20/13, thereby turning systematically neutral (from bullish).
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Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) price turned up from a deeply oversold level and has plenty of room to rise to the mean. TLT fell below its 50-day SMA on 5/10/13, thereby turning systematically bearish (from neutral). Long term, the 33-year trend is still indicating rising bond prices, however. An oversold bounce seems due after an unusually persistent selling wave since the first day of May. Support 107.76, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance: 114.77, 118.94, 121.32, 124.26, 126.08, 127.19, 127.72, 130.69, and 132.22.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) price turned systematically neutral (from bullish) on 5/17/13, when it whipsawed back down below the 50-day SMA. Support 101.25, 99.79, and 97.66. Resistance: 107.62, 108.24, 109.17, 109.20, 109.32, and 109.89.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) whipsawed back above its 50-day SMA on 5/3/13, thereby turning systematically bullish (from neutral). JNK/LQD has been neutral for most of the past 3 years.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) turned systematically bearish (from neutral) on 5/6/13, when the 50-day SMA crossed below the 200-day SMA. Absolute price of TIP peaked at 123.44 on 12/6/12 and turned systematically bearish on 5/3/13.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price whipsawed back above its 50-day SMA on 6/26/13, thereby turning systematically bullish (from neutral). Longer term, UUP has been consolidating secular trend losses since bottoming at 20.84 on 5/4/11. Support 21.82, 21.53, 21.07, and 20.84. Resistance 22.96, 22.69, 23.14, 23.52, 25.84, 27.19, and 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price remains systematically bearish. Price has been trending down since peaking on 3/4/11.
Crude Oil, United States Oil ETF (USO) price has been consolidating losses in a choppy, sideways trend for 4 years, whipsawing around both the 50-day SMA and 200-day SMA. Support 32.53, 32.12, 30.79, 29.02, 26.28, and 22.74. Resistance 35.53, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) price trend remains systematically bearish. Price fell below its lows of the previous 2 years on 6/28/13, thereby reconfirming its preexisting major bearish trend. GLD has been down trending since peaking at 185.85 on 9/6/11. Support: 113.08 and 102.28. Resistance: 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) has stayed systematically bearish most of the time since 12/27/12, when the 50-day SMA crossed below the 200-day SMA. Longer term, GDX/GLD has remained mostly bearish for more than 6 years, since 9/5/06.
Silver, iShares Silver Trust ETF (SLV) price trend remains systematically bearish. Price fell below its lows of the previous 2 years on 6/27/13, again reconfirming its preexisting major bearish trend. The trend has been bearish since price peaked at 48.35 on 4/28/11. Support 16.73, 14.37, 12.27, 11.64, and 8.45. Resistance: 22.65, 23.70, 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 2 years on 6/26/13, again reconfirming its major downtrend. SLV/GLD remains systematically bearish. SLV has underperformed GLD since SLV price peaked at 48.35 on 4/28/11.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the previous 2 years on 6/24/13, again reconfirming its major downtrend. The JJC price trend has been bearish since price peaked 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, so price weakness in Copper implies a weak economic outlook.
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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
2.04% , CR , CRANE
2.46% , PCG , PG&E
3.60% , CMCSA , COMCAST HOLDINGS STK A
2.55% , APOL , APOLLO GROUP
8.08% , NEM , NEWMONT MINING
5.98% , HSP , HOSPIRA
2.20% , RFMD , RF Micro Devices Inc
0.67% , PGJ , China LargeCap Growth G D H USX PS, PGJ
2.92% , IAU , Gold COMEX iS, IAU
0.55% , PMCS , PMC SIERRA
3.06% , BIIB , BIOGEN IDEC
3.51% , EA.O , ELECTRONIC ARTS
1.65% , NYT , NY TIMES STK A
8.72% , SIL , Silver Miners Global X, SIL
6.04% , SLV , Silver Trust iS, SLV
1.98% , MNST , Monster Beverage, MNST
1.92% , PPL , PPL
2.18% , NKE , NIKE STK B
2.31% , HOG , HARLEY DAVIDSON
0.53% , HSIC , Henry Schein Inc
2.17% , DRI , DARDEN REST
1.08% , CHD , Church & Dwight
1.26% , COH , COACH
1.32% , NEE , NextEra Energy Resources LLC
0.93% , IP , INTL PAPER
0.90% , ETN , EATON
1.01% , DLTR , Dollar Tree Stores Inc
0.64% , BMS , BEMIS
1.91% , XME , Metals & Mining SPDR, XME
1.57% , HD , HOME DEPOT
0.67% , PGR , PROGRESSIVE OHIO
0.57% , S , SPRINT NEXTEL
0.93% , GPC , GENUINE PARTS
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Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-27.76% , BBRY , BlackBerry (BBRY)
-2.23% , TLAB , TELLABS
-2.54% , IGN , Networking, IGN
-3.01% , ODP , OFFICE DEPOT
-3.48% , BMY , BRISTOL MYERS
-1.16% , JNS , JANUS CAPITAL
-2.79% , EMN , EASTMAN CHEM
-0.44% , EWK , Belgium Index, EWK
-1.27% , CMS , CMS ENERGY
-2.32% , IBM , IBM
-1.04% , IXJ , Healthcare Global, IXJ
-2.81% , ADSK , AUTODESK
-1.36% , ABT , ABBOTT LABS
-1.33% , NIHD , NII Holdings, Inc.
-3.65% , CECO , CAREER EDUCATION CORP
-1.76% , PPG , PPG INDUSTRIES
-0.94% , AON , AON
-0.74% , CINF , CINCINNATI FIN
-1.25% , XEL , XCEL ENERGY
-2.37% , FAST , Fastenal Company
-1.29% , BF.B , BROWN FORMAN STK B
-0.64% , EWG , Germany Index, EWG
-1.39% , DBA , Agriculture DB PS, DBA
-2.76% , OMX , OFFICEMAX INC., OMX
-2.09% , BEN , FRANKLIN RSC
-0.82% , SRE , SEMPRA ENERGY
-2.18% , LPX , LOUISIANA PAC
-1.25% , TXT , TEXTRON
-2.05% , DE , DEERE & CO
-2.33% , BK , BANK OF NEW YORK
-1.09% , CAH , CARDINAL HEALTH
-2.04% , CSC , COMPUTER SCIENCE
-1.54% , ASH , ASHLAND
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
6.04% , Silver Trust iS, SLV
2.87% , Mexico Index, EWW
2.73% , Gold Shares S.T., GLD
2.72% , South Africa Index, EZA
1.91% , Metals & Mining SPDR, XME
1.29% , Taiwan Index, EWT
0.98% , India PS, PIN
0.93% , India Earnings WTree, EPI
0.82% , Frontier Markets Guggenheim , FRN
0.81% , Japan Index, EWJ
0.78% , Bear, Short S&P 500, SH
0.76% , South Korea Index, EWY
0.68% , Bond, 20+ Years Treasury, TLT
0.67% , China LargeCap Growth G D H USX PS, PGJ
0.64% , Emerging 50 BLDRS, ADRE
0.58% , Emerging VIPERs, VWO
0.57% , Emerging Markets MSCI iS, EEM
0.56% , WilderHill Clean Energy PS, PBW
0.56% , Russia MV, RSX
0.45% , Chile MSCI iS, ECH
0.44% , Utilities VIPERs, VPU
0.39% , Singapore Index, EWS
0.39% , Malaysia Index, EWM
0.36% , Consumer Discretionary SPDR, XLY
0.35% , Semiconductor iS IGW, SOXX
0.34% , Bond, TIPS U.S. Treasury iS, TIP
0.28% , Semiconductor SPDR, XSD
0.27% , Bond, Emerging Mkt JPM iS, EMB
0.24% , Utilities SPDR, XLU
0.22% , Financial Preferred, PGF
0.20% , Preferred Stock iS, PFF
0.19% , Telecom DJ US, IYZ
0.19% , Canada Index, EWC
0.19% , Turkey MSCI iS, TUR
0.17% , Switzerland Index, EWL
0.14% , QQQ Nasdaq 100 Trust, QQQ
0.14% , LargeCap Blend Russell 3000 iS, IWV
0.10% , Netherlands Index, EWN
0.09% , China 25 iS, FXI
0.08% , Hong Kong Index, EWH
0.08% , Latin Am 40, ILF
0.07% , Global ex U.S. LargeCap Blend, ACWX
0.05% , Pacific VIPERs, VPL
0.04% , LargeCap Blend Russell 1000 iS, IWB
0.03% , Dividend International, PID
0.01% , Bond, Intermediate US Aggregate iS, AGG
0.00% , Energy & Nat Res iS GS, IGE
0.00% , Dividend High Yield Equity PS, PEY
-0.01% , Bond Treasury Short-Term iS, SHV
-0.01% , Bond, 1-3 Year Treasury, SHY
-0.06% , Bond, Long-Term Corp iBoxx iS, LQD
-0.07% , SmallCap Blend EAFE MSCI iS, SCZ
-0.09% , Water Resources, PHO
-0.11% , Dividend U.S. DJ iS, DVY
-0.12% , Bond, 10 Year Treasury, IEF
-0.13% , Microcap Russell, IWC
-0.15% , Technology DJ US, IYW
-0.18% , Energy VIPERs, VDE
-0.19% , Foreign LargeCap EAFE MSCI iS, EFA
-0.20% , SmallCap Value Russell 2000 iS, IWN
-0.24% , MidCap Value S&P 400 iS, IJJ
-0.26% , Global LargeCap Blend MSCI iS, ACWI
-0.28% , United Kingdom Index, EWU
-0.29% , Value SmallCap VIPERS, VBR
-0.30% , MidCap Growth S&P 400 iS, IJK
-0.31% , Growth EAFE MSCI, EFG
-0.32% , Small Cap VIPERs, VB
-0.33% , Bond, High-Yield Junk, JNK
-0.34% , SmallCap Value S&P 600 iS, IJS
-0.36% , Biotech SPDR, XBI
-0.37% , Growth SmallCap VIPERs, VBK
-0.38% , Value MidCap Russell, IWS
-0.38% , MidCap Russell, IWR
-0.40% , Info Tech VIPERs, VGT
-0.41% , S&P 500 SPDRs LargeCap Blend, SPY
-0.42% , LargeCap Value Russell 1000 iS, IWD
-0.42% , Energy SPDR, XLE
-0.42% , Oil Fund PowerShares, DBO
-0.42% , Energy DJ, IYE
-0.43% , SmallCap Blend S&P 600 iS, IJR
-0.43% , Growth VIPERs, VUG
-0.43% , LargeCap VIPERs, VV
-0.43% , Real Estate US DJ iS, IYR
-0.44% , Oil, Crude, U.S. Oil Fund, USO
-0.44% , Belgium Index, EWK
-0.44% , Technology SPDR, XLK
-0.44% , MidCap Blend S&P 400 iS, IJH
-0.44% , Value LargeCap Dynamic PS, PWV
-0.46% , REIT Wilshire, RWR
-0.46% , Energy Global, IXC
-0.47% , Dividend ex-U.S. DJ iS, IDV
-0.47% , LargeCap Blend S&P=Weight R, RSP
-0.47% , Value EAFE MSCI, EFV
-0.49% , Growth MidCap Russell, IWP
-0.49% , LargeCap Growth S&P 500 iS, IVW
-0.49% , Realty Cohen & Steers, ICF
-0.50% , Transportation Av DJ, IYT
-0.50% , Financials VIPERs, VFH
-0.51% , Commodity Tracking, DBC
-0.52% , Blend Total Market VIPERs, VTI
-0.53% , Basic Materials DJ US, IYM
-0.55% , LargeCap Growth Russell 1000 iS, IWF
-0.56% , Dividend Appreciation Vipers, VIG
-0.56% , Financial DJ US, IYF
-0.56% , Materials SPDR, XLB
-0.57% , SmallCap Blend Russell 2000 iS, IWM
-0.58% , Industrial SPDR, XLI
-0.60% , SmallCap Growth Russell 2000 iS, IWO
-0.61% , MidCap S&P 400 SPDRs, MDY
-0.62% , REIT VIPERs, VNQ
-0.63% , Financial Services DJ, IYG
-0.63% , Consumer Staples SPDR, XLP
-0.63% , Sweden Index, EWD
-0.64% , LargeCap Blend S&P 500 iS, IVV
-0.64% , Financial SPDR, XLF
-0.64% , Germany Index, EWG
-0.66% , SmallCap Growth S&P 600 iS, IJT
-0.66% , European VIPERs, VGK
-0.67% , Europe 350 S&P Index, IEV
-0.68% , Bond, High Yield Corp iBoxx iS, HYG
-0.69% , Bond Ex-US Treas, BWX
-0.69% , Global 100, IOO
-0.69% , LargeCap Value S&P 500 iS, IVE
-0.73% , EMU Europe Index, EZU
-0.73% , Dividend SPDR, SDY
-0.73% , Value VIPERs, VTV
-0.76% , LargeCap Blend S&P 100, OEF
-0.77% , Health Care SPDR, XLV
-0.79% , Indonesia MV, IDX
-0.80% , Bond, Muni S&P ATM-Free iS, MUB
-0.82% , Capital Markets KWB ST, KCE
-0.89% , France Index, EWQ
-0.90% , DIAMONDS (DJIA), DIA
-0.92% , Austria Index, EWO
-0.97% , Brazil Index, EWZ
-1.11% , Spain Index, EWP
-1.31% , Homebuilders SPDR, XHB
-1.34% , Italy Index, EWI
-1.39% , Agriculture DB PS, DBA
-1.40% , Pacific ex-Japan, EPP
-1.44% , Thailand MSCI iS, THD
-2.08% , Australia Index, EWA
-2.54% , Networking, IGN
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The S&P 500 Composite Potential Resistance
1687.18, high of 5/22/2013
1674.21, high of 5/28/2013
1654.19, high of 6/18/2013
1621.72, 50-day SMA
The S&P 500 Composite Potential Support
1606.04, Fib 23.6% of Nov-May 2013
1556.24, Equal Waves Projection
1555.84, Fib 38.2% of Nov-May 2013
1536.03, low of 4/18/2013
1530.94, high of 2/19/2013
1515.27, Fib 50% of Nov-May 2013
1510.44, 200-day SMA
1485.01, low of 2/26/2013
1474.69, Fib 61.8% of Nov-May 2013
1474.51, high of 9/14/2012
1468.82, Fib 78.6% of 2009-13 range
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
1416.93, Fib 79.6% of Nov-May 2013
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
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
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
1297.39, Fib 61.8% of 2009-13 range
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
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
1202.37, low of 12/19/2011
1176.99, Fib 50% of 2009-13 range
1158.66, low of 11/25/2011
1121.44, Fibonacci 50% of 2007-2009 range
1056.58, Fib 38.2% of 2009-13 range
1074.77, low of 10/4/2011
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
907.60, Fib 23.6% of 2009-13 range
881.38, Fibonacci 23.6% of 2007-2009 range
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
