Media reports said the stock market was “poised for its 21st consecutive Tuesday of gains. ” U.S. stocks opened higher on Tuesday but reversed to the downside to close lower, surrendering Monday’s gains. The S&P 500 Composite Index (SPX: 1,631.38) finished down 0.55% and Nasdaq fell 0.58%. The Cumulative Daily Advance-Decline Line on the NYSE fell again–its third consecutive trading day down. NYSE Volume fell 11%.
Despite months of technical divergences and a clear loss of upside momentum in recent weeks, the great majority of investors remain bullishly complacent. The Bullish Majority assumes (hopes) that the stock market will again find its old bullish resilience, that bullish momentum will again feed on itself, and the “Buy-the-Dip” mentality won’t quit until the Fed quits its “highly accommodative monetary policy”.
Following a persistent trend, investors typically overestimate the market’s ability to continue in that same trend direction, while underestimating risks of trend reversal and the natural tendency of all markets to move both up and down, going from overbought to oversold, just as they always have. As to the stock market going up every Tuesday, well, it just ain’t normal.
Stock Market Indicators
The Dow Theory confirmed a Primary Tide Bull Market most recently on 5/17/13, when the Dow-Jones Transportation Average and the Dow-Jones Industrial Average both closed at new price highs. On 5/28/13, however, the Industrial Average rose to a higher high without confirmation by the Transportation Average, which made a lower high.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) rose above its 50-day SMA on 4/30/13, thereby turning systematically neutral (from bearish). Longer term, QQQ has underperformed SPY since 4/10/12, and that Relative Strength downtrend will probably resume.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below the lows of the previous 4 years on 5/31/13, 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 5-month low on 4/17/13.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below the lows of the previous 4 years on 5/31/13, 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 5-month low on 4/17/13.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below the lows of the previous 8 months on 6/3/13. 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) whipsawed back up above its 50-day SMA on 6/3/13, thereby turning systematically neutral again (from bearish). 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) whipsawed back up above its 50-day SMA on 5/28/13, thereby turning systematically bullish again (from neutral). Absolute price rose to a new price high intraday on 5/22/13, but that high was rejected by the market.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) whipsawed back down below its 50-day SMA on 6/3/13, thereby turning systematically neutral again (from bullish). Absolute price rose to a new price high intraday on 5/22/13, but that high was rejected by the market.
Tangible Assets, Commodities
U.S. dollar ETF (UUP) price turned systematically neutral (from bullish) on 6/3/13, when it fell below the 50-day SMA. Longer term, UUP has been consolidating secular trend losses since bottoming at 20.84 on 5/4/11. Support 22.12, 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 fell below its lows of the previous 2 years on 5/20/13, again reconfirming its preexisting major bearish trend. Price whipsawed back down below its 50-day SMA on 5/10/13, thereby turning systematically bearish (from neutral) again.
Crude Oil, United States Oil ETF (USO) price turned systematically bearish again (from neutral) on 5/29/13 when price fell below both the 50-day SMA and 200-day SMA. Longer term, USO has been mostly bearish since peaking at 119.17 on 7/11/08. Support 32.12, 30.79, 29.02, 26.28, and 22.74. Resistance 34.59, 34.86, 35.53, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) price fell below its lows of the previous 2 years on 4/15/13, thereby reconfirming its preexisting major bearish trend. Price turned systematically bearish on 2/22/13, when the 50-day SMA fell below the 200-day SMA. Longer term, GLD has been mostly bearish since peaking at 185.85 on 9/6/11. Support: 130.51. Resistance: 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 fell below its lows of the previous 2 years on 5/17/13, again reconfirming its preexisting major bearish trend. Price turned systematically bearish on 3/1/13, when the 50-day SMA fell below the 200-day SMA. Longer term, SLV has been mostly bearish since peaking at 48.35 on 4/28/11. Support 20.73, and 19.44. Resistance: 23.70, 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 5/31/13, again reconfirming its major downtrend. SLV/GLD remains systematically bearish.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price has stayed systematically bearish most of the time since 4/4/13, when the 50-day SMA crossed below the 200-day SMA. Longer term, JJC has been mostly bearish since peaking 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
10.45% , MNST , Monster Beverage, MNST
6.08% , CLF , CLIFFS NATURAL RESOURCES, CLF
2.14% , ADBE , ADOBE SYS
4.59% , QLGC , QLOGIC
2.39% , LTD , LIMITED BRANDS
0.68% , MCHP , Microchip Technology Incorporated
1.84% , AN , AUTONATION
0.80% , RSH , RADIOSHACK
1.47% , FLEX , Flextronics International Ltd
1.37% , DRI , DARDEN REST
1.58% , FII , FED INVESTORS STK B
1.63% , ALTR , ALTERA
1.71% , T , AT&T Corp., T
1.01% , XRX , XEROX
1.00% , PX , PRAXAIR
0.90% , FNP , Fifth & Pacific Cos., FNP
0.93% , CPB , CAMPBELL SOUP
0.77% , LBTYA , Liberty Global Inc. (LBTYA)
0.27% , BCR , C R BARD
2.30% , SPLS , STAPLES
0.53% , PKI , PERKINELMER
0.68% , JNS , JANUS CAPITAL
0.70% , FDX , FEDEX
1.49% , KO , COCA COLA
0.65% , TGT , TARGET
0.33% , KR , KROGER
1.14% , CMCSA , COMCAST HOLDINGS STK A
0.41% , AEE , AMEREN
0.40% , EWL , Switzerland Index, EWL
0.27% , WPO , Washington Post
0.98% , VIA.O , VIACOM INC. (New)
0.53% , LLTC , LINEAR TECH
1.69% , TXN.O , TEXAS INSTRUMENT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-5.06% , DDS , DILLARD STK A
-0.61% , PZI , Micro Cap Zachs, PZI
-4.24% , MAR , MARRIOTT INTL STK A
-1.28% , PBW , WilderHill Clean Energy PS, PBW
-0.68% , EZU , EMU Europe Index, EZU
-2.04% , SRCL , Stericycle, SRCL
-3.03% , LEN , Lennar Corp. (LEN)
-3.23% , LOW , LOWES
-3.56% , PHM , PULTE HOMES
-2.23% , FDO , FAMILY DLR STRS
-1.38% , TXT , TEXTRON
-3.21% , VLO , VALERO ENERGY
-1.75% , CSX , CSX
-3.10% , HD , HOME DEPOT
-2.02% , BBBY , BED BATH BEYOND
-1.57% , CAH , CARDINAL HEALTH
-1.70% , EMN , EASTMAN CHEM
-0.50% , EWO , Austria Index, EWO
-1.58% , HMA , HEALTH MGMT STK A
-4.65% , KBH , KB HOME
-1.15% , PNW , PINNACLE WEST
-0.66% , RPV , Value S&P 500, RPV
-3.18% , LAMR , Lamar Advertising Company
-1.85% , RFMD , RF Micro Devices Inc
-2.02% , CINF , CINCINNATI FIN
-1.19% , IDX , Indonesia MV, IDX
-0.48% , EWK , Belgium Index, EWK
-1.51% , TMK , TORCHMARK
-1.24% , MTB , M&T BANK
-1.52% , SRE , SEMPRA ENERGY
-0.44% , ACWX , Global ex US ACWI iS, ACWX
-2.69% , ODP , OFFICE DEPOT
-0.65% , IWR , MidCap Russell, IWR
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.89% , Japan Index, EWJ
1.42% , Turkey MSCI iS, TUR
0.93% , Pacific VIPERs, VPL
0.48% , Bear, Short S&P 500, SH
0.45% , Semiconductor iS IGW, SOXX
0.40% , Switzerland Index, EWL
0.38% , Commodity Tracking, DBC
0.36% , Foreign LargeCap EAFE MSCI iS, EFA
0.35% , Frontier Markets Guggenheim , FRN
0.31% , Oil Fund PowerShares, DBO
0.30% , Growth EAFE MSCI, EFG
0.16% , Value EAFE MSCI, EFV
0.14% , SmallCap Blend EAFE MSCI iS, SCZ
0.12% , Chile MSCI iS, ECH
0.12% , Oil, Crude, U.S. Oil Fund, USO
0.06% , Semiconductor SPDR, XSD
0.05% , China LargeCap Growth G D H USX PS, PGJ
0.04% , Agriculture DB PS, DBA
0.02% , Consumer Staples SPDR, XLP
0.01% , Global 100, IOO
0.00% , Bond, High Yield Corp iBoxx iS, HYG
0.00% , Bond, 1-3 Year Treasury, SHY
0.00% , Bond Treasury Short-Term iS, SHV
-0.05% , Preferred Stock iS, PFF
-0.05% , Bond, Emerging Mkt JPM iS, EMB
-0.11% , Dividend High Yield Equity PS, PEY
-0.12% , Materials SPDR, XLB
-0.15% , Bond, High-Yield Junk, JNK
-0.19% , Bond, TIPS U.S. Treasury iS, TIP
-0.22% , Bond, Intermediate US Aggregate iS, AGG
-0.23% , Dividend International, PID
-0.24% , Capital Markets KWB ST, KCE
-0.26% , Bond, 10 Year Treasury, IEF
-0.26% , United Kingdom Index, EWU
-0.27% , Financial Preferred, PGF
-0.28% , Bond, Muni S&P ATM-Free iS, MUB
-0.29% , Basic Materials DJ US, IYM
-0.31% , Dividend SPDR, SDY
-0.32% , Dividend Appreciation Vipers, VIG
-0.34% , Utilities SPDR, XLU
-0.35% , Consumer Discretionary SPDR, XLY
-0.36% , Global LargeCap Blend MSCI iS, ACWI
-0.39% , Dividend U.S. DJ iS, DVY
-0.39% , Bond, Long-Term Corp iBoxx iS, LQD
-0.39% , Europe 350 S&P Index, IEV
-0.43% , Value LargeCap Dynamic PS, PWV
-0.44% , Singapore Index, EWS
-0.44% , Global ex U.S. LargeCap Blend, ACWX
-0.44% , DIAMONDS (DJIA), DIA
-0.44% , Technology SPDR, XLK
-0.45% , LargeCap Blend S&P 500 iS, IVV
-0.46% , Russia MV, RSX
-0.46% , LargeCap Blend S&P=Weight R, RSP
-0.47% , Technology DJ US, IYW
-0.47% , Bond Ex-US Treas, BWX
-0.47% , LargeCap Blend S&P 100, OEF
-0.47% , LargeCap Growth S&P 500 iS, IVW
-0.48% , Belgium Index, EWK
-0.48% , S&P 500 SPDRs LargeCap Blend, SPY
-0.48% , European VIPERs, VGK
-0.48% , Blend Total Market VIPERs, VTI
-0.49% , Value VIPERs, VTV
-0.49% , LargeCap VIPERs, VV
-0.50% , Transportation Av DJ, IYT
-0.50% , Austria Index, EWO
-0.50% , LargeCap Value S&P 500 iS, IVE
-0.51% , Utilities VIPERs, VPU
-0.51% , LargeCap Blend Russell 1000 iS, IWB
-0.52% , QQQ Nasdaq 100 Trust, QQQ
-0.52% , Spain Index, EWP
-0.52% , LargeCap Blend Russell 3000 iS, IWV
-0.53% , Emerging 50 BLDRS, ADRE
-0.54% , LargeCap Value Russell 1000 iS, IWD
-0.55% , Industrial SPDR, XLI
-0.55% , Hong Kong Index, EWH
-0.56% , Growth VIPERs, VUG
-0.56% , Mexico Index, EWW
-0.59% , Italy Index, EWI
-0.60% , LargeCap Growth Russell 1000 iS, IWF
-0.62% , Malaysia Index, EWM
-0.62% , Health Care SPDR, XLV
-0.62% , MidCap Value S&P 400 iS, IJJ
-0.64% , MidCap Growth S&P 400 iS, IJK
-0.65% , MidCap Russell, IWR
-0.65% , Growth MidCap Russell, IWP
-0.65% , MidCap S&P 400 SPDRs, MDY
-0.67% , Thailand MSCI iS, THD
-0.67% , France Index, EWQ
-0.68% , EMU Europe Index, EZU
-0.68% , Brazil Index, EWZ
-0.69% , Telecom DJ US, IYZ
-0.69% , Value SmallCap VIPERS, VBR
-0.70% , Info Tech VIPERs, VGT
-0.72% , MidCap Blend S&P 400 iS, IJH
-0.72% , Networking, IGN
-0.73% , Netherlands Index, EWN
-0.73% , Financial Services DJ, IYG
-0.73% , Value MidCap Russell, IWS
-0.74% , Energy Global, IXC
-0.76% , Energy DJ, IYE
-0.76% , Germany Index, EWG
-0.76% , Dividend ex-U.S. DJ iS, IDV
-0.77% , Energy & Nat Res iS GS, IGE
-0.77% , Energy VIPERs, VDE
-0.77% , Small Cap VIPERs, VB
-0.79% , Canada Index, EWC
-0.79% , Latin Am 40, ILF
-0.79% , Energy SPDR, XLE
-0.79% , Growth SmallCap VIPERs, VBK
-0.83% , SmallCap Blend S&P 600 iS, IJR
-0.87% , SmallCap Value S&P 600 iS, IJS
-0.88% , SmallCap Growth S&P 600 iS, IJT
-0.91% , Financial SPDR, XLF
-0.91% , Financial DJ US, IYF
-0.92% , Metals & Mining SPDR, XME
-0.92% , Bond, 20+ Years Treasury, TLT
-0.93% , SmallCap Value Russell 2000 iS, IWN
-0.93% , Financials VIPERs, VFH
-0.94% , Gold Shares S.T., GLD
-0.95% , SmallCap Growth Russell 2000 iS, IWO
-0.95% , Silver Trust iS, SLV
-0.95% , India PS, PIN
-0.99% , China 25 iS, FXI
-1.01% , Microcap Russell, IWC
-1.04% , Pacific ex-Japan, EPP
-1.04% , Water Resources, PHO
-1.06% , SmallCap Blend Russell 2000 iS, IWM
-1.14% , Sweden Index, EWD
-1.14% , Emerging VIPERs, VWO
-1.16% , Real Estate US DJ iS, IYR
-1.17% , South Korea Index, EWY
-1.19% , Indonesia MV, IDX
-1.20% , Australia Index, EWA
-1.22% , Emerging Markets MSCI iS, EEM
-1.28% , WilderHill Clean Energy PS, PBW
-1.29% , India Earnings WTree, EPI
-1.32% , Realty Cohen & Steers, ICF
-1.38% , REIT Wilshire, RWR
-1.39% , REIT VIPERs, VNQ
-1.39% , South Africa Index, EZA
-1.58% , Taiwan Index, EWT
-1.97% , Biotech SPDR, XBI
-2.12% , Homebuilders SPDR, XHB
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The S&P 500 Composite Potential Resistance
1687.18, intraday high of 5/22/2013
1674.21, intraday high of 5/28/2013
The S&P 500 Composite Potential Support
1622.72, intraday low of 6/3/13
1622.70, intraday low of 5/8/2013
1603.03, 50-day SMA
1536.03, low of 4/18/2013
1492.13, 200-day SMA
1485.01, low of 2/26/2013
1474.51, high of 9/14/2012
1463.76, low of 1/15/2013
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
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
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
1158.66, low of 11/25/2011
1121.44, Fibonacci 50% of 2007-2009 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
881.38, Fibonacci 23.6% of 2007-2009 range
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
