by Robert W. Colby, CMT
Crude Oil, United States Oil ETF (USO) price turned systematically bearish (from neutral) on 4/30/13 when price fell below the 50-day SMA. Longer term, USO has been mostly bearish since peaking at 119.17 on 7/11/08.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) rose above its 50-day SMA on 4/30/13, thereby turning systematically bullish (from neutral). JNK/LQD had been neutral for most of the past 3 years.
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). Except for only one day, QQQ/SPY was systematically bearish from 11/7/12, when the 50-day SMA fell below the 200-day SMA.
Foreign Stocks ETF (EFA) absolute price rose above the highs of the previous 21 months on 4/30/13.
The S&P Mid Cap 400 ETF (MDY) absolute price rose to a new high on 4/30/13.
U.S. stocks brushed aside news of a negative Chicago PMI report to close higher again in more active trading. The S&P 500 Composite Index (SPX: 1,597.57) finished up 0.25% at a new high, the Nasdaq Composite Index rose 0.66%, the Dow Jones Industrial Average advanced by 0.14%, and the Dow Jones Transportation Average rose 0.45%.
NYSE total volume rose 29% to a level 12% above its 200-day SMA.
Breadth was positive, with 2663 Advances and 1323 Declines. In addition, Advancing/Declining Volume was positive, with 2.3 Advancing Stock Volume to 1.6 Declining Stock Volume.
A variety of stock market price momentum indicators continue to show bearish divergences, while investor sentiment has been at bullish extremes most of the year. My interpretation of the technical indicators suggests that the medium-term stock market uptrend evident from November through April may be overdone. The market seems overdue for a significant downside correction. With prices testing their highs, now appears to be a critical juncture.
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Stock Market Indicators
The Dow Theory last confirmed a Primary Tide Bull Market on 3/14/13, when both Dow-Jones Industrial and Transportation Averages closed at new price highs. The Dow-Jones Industrial Average closed at a higher high on 4/11/13, while the Dow-Jones Transportation Average rose to a lower high, thereby continuing a bearish divergence.
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). Except for only one day, QQQ/SPY was systematically bearish from 11/7/12, when the 50-day SMA fell below the 200-day SMA.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below the lows of the previous 4 years on 4/17/13, 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 4/15/13, reconfirming its 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) rose above its 50-day SMA on 4/23/13, thereby turning systematically bullish again. EFA price confirmed the uptrend by rising above the highs of the previous 21 months on 4/30/13.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) turned systematically bearish again (from neutral) on 4/24/13, when it whipsawed back down below its 50-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 the lows of the previous 3 months on 4/17/13. IWM/SPY turned systematically neutral on 4/1/13 when it fell below the 50-day SMA. Absolute price peaked on 3/15/13 and has been lagging the broader stock market price indexes since then, thereby demonstrating a bearish divergence.
The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below the lows of the previous 3 months on 4/18/13. MDY/SPY turned systematically neutral (from bullish) on 4/1/13 when it fell below the 50-day SMA. Absolute price rose to a new high on 4/30/13.
Daily price momentum oscillators have been diverging bearishly for many weeks and months while most of the stock price indexes rose to higher highs. Daily price momentum oscillators have remained below their highs of January, 2013, as well as below their 2011-2012 highs. For example, RSI(14) based on the S&P 500 Index peaked at 74.46 on 1/29/13 but was only able to rise to 67.28 on 4/11/13 when the S&P 500 closed at a higher high. And MACD(12,26,9) peaked at 17.88 on 1/29/13 but was only 11.48 on 4/11/13. In addition, NYSE Net New Highs, the percentage of stocks in the S&P 500 trading above their 50-day SMAs, and the Bullish Percentage of stocks in the S&P 500 in Point-and-Figure Chart uptrends all failed to rise to higher highs in April 2013. Bearishly diverging momentum is a problem because momentum is a leading indicator of price.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price turned systematically neutral (from bullish) on 4/26/13, when it whipsawed back below the 50-day SMA. Longer term, UUP has been consolidating secular trend losses since bottoming at 20.84 on 5/4/11. Support 22.21, 22.15, 21.53, 21.07, and 20.84. Resistance 22.69, 22.78, 22.96, 23.14, 23.52, 25.84, 27.19, and 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price turned systematically neutral (from bearish) on 4/29/13 when price rose above the 50-day SMA.
Crude Oil, United States Oil ETF (USO) price turned systematically bearish (from neutral) on 4/30/13 when price fell below the 50-day SMA. Longer term, USO has been mostly bearish since peaking at 119.17 on 7/11/08. Support 30.79, 29.02, 26.28, and 22.74. Resistance 33.92, 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: 139.78 135.85, and 130.51. 142.55. 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) turned systematically bearish again on 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 4/15/13, thereby 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 4/24/13, confirming a major downtrend. SLV/GLD remains systematically bearish.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price fell below its lows of the previous 2 years on 4/23/13, thereby reconfirming a bearish major trend. JJC remains systematically bearish. 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
1.11% , IGN , Networking, IGN
7.40% , BBY , BEST BUY
5.86% , SIRI , Sirius Satellite
5.22% , AMD , ADV MICRO DEV
4.32% , ODP , OFFICE DEPOT
3.06% , ADSK , AUTODESK
3.23% , HIG , HARTFORD FINL
3.07% , SNV , SYNOVUS
3.46% , MAR , MARRIOTT INTL STK A
4.14% , AVP , AVON
1.53% , GPC , GENUINE PARTS
2.44% , FLEX , Flextronics International Ltd
0.77% , SOXX , Semiconductor iS IGW, SOXX
1.05% , IGM , Technology GS, IGM
2.40% , SPLS , STAPLES
4.36% , BBRY , BlackBerry (BBRY)
2.89% , HAL , HALLIBURTON
2.04% , KMX , CarMax
4.26% , OMX , OFFICEMAX INC., OMX
2.59% , RL , Polo Ralph Lauren
1.98% , LLTC , LINEAR TECH
0.51% , RPV , Value S&P 500, RPV
3.18% , LVLT.K , LEVEL 3 COMMUNICATIONS
0.98% , IDX , Indonesia MV, IDX
0.91% , GNW , GENWORTH FINANCIAL
0.49% , IYZ , Telecom DJ US, IYZ
2.05% , PETM , PETsMART Inc
1.18% , DHR , DANAHER
2.35% , CVG , CONVERGYS
1.21% , ITT , ITT INDS
3.30% , HOT , STARWOOD HOTELS
0.70% , IJS , Value SmallCap S&P 600 B, IJS
0.66% , IJR , SmallCap S&P 600, IJR
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Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-15.62% , PBI , PITNEY BOWES
-6.06% , CMI , CUMMINS
-4.62% , NEM , NEWMONT MINING
-4.47% , PFE , PFIZER
-3.96% , MBI , MBIA
-3.30% , PCL , PLUM CREEK TIMB
-3.19% , SNDK , SanDisk Corporation
-4.80% , MAS , MASCO
-2.14% , VLO , VALERO ENERGY
-0.43% , IXJ , Healthcare Global, IXJ
-1.46% , MTG , MGIC INVESTMENT
-0.98% , S , SPRINT NEXTEL
-1.74% , FAST , Fastenal Company
-2.06% , TUP , TUPPERWARE
-1.35% , NI , NISOURCE
-1.26% , LBTYA , Liberty Global Inc. (LBTYA)
-1.71% , MRK , MERCK & CO
-1.08% , CBS , CBS CORP.
-0.16% , IGV , Software, IGV
-1.06% , NOV , NATIONAL OILWELL VARC0
-0.85% , XBI , Biotech SPDR, XBI
-1.03% , DOV , DOVER
-2.31% , AMGN , AMGEN
-1.42% , FHN , First Horizon National
-2.13% , INTU , INTUIT
-0.77% , PNC , PNC FINL SVC
-0.71% , EXC , EXELON CORP
-0.45% , GRMN , GARMIN LTD
-0.30% , BIG , BIG LOTS
-1.18% , SYMC , SYMANTEC
-0.69% , PEY , Dividend High Yield Equity PS, PEY
-0.48% , BMY , BRISTOL MYERS
-0.64% , BLK , BlackRock Inc.
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.38% , India PS, PIN
1.99% , South Korea Index, EWY
1.94% , India Earnings WTree, EPI
1.91% , Latin Am 40, ILF
1.83% , Brazil Index, EWZ
1.75% , Metals & Mining SPDR, XME
1.65% , Turkey MSCI iS, TUR
1.48% , Emerging 50 BLDRS, ADRE
1.45% , Canada Index, EWC
1.43% , Emerging Markets MSCI iS, EEM
1.40% , Russia MV, RSX
1.38% , Semiconductor SPDR, XSD
1.28% , Thailand MSCI iS, THD
1.25% , Emerging VIPERs, VWO
1.17% , REIT VIPERs, VNQ
1.14% , Capital Markets KWB ST, KCE
1.13% , Realty Cohen & Steers, ICF
1.13% , Info Tech VIPERs, VGT
1.12% , REIT Wilshire, RWR
1.11% , Networking, IGN
1.10% , Technology DJ US, IYW
1.08% , Technology SPDR, XLK
1.05% , MidCap Value S&P 400 iS, IJJ
1.03% , Mexico Index, EWW
0.98% , Indonesia MV, IDX
0.98% , Real Estate US DJ iS, IYR
0.87% , Frontier Markets Guggenheim , FRN
0.86% , Taiwan Index, EWT
0.86% , Australia Index, EWA
0.86% , China 25 iS, FXI
0.85% , MidCap S&P 400 SPDRs, MDY
0.85% , MidCap Blend S&P 400 iS, IJH
0.83% , Germany Index, EWG
0.82% , Sweden Index, EWD
0.79% , Chile MSCI iS, ECH
0.78% , MidCap Growth S&P 400 iS, IJK
0.78% , Japan Index, EWJ
0.77% , Semiconductor iS IGW, SOXX
0.73% , QQQ Nasdaq 100 Trust, QQQ
0.71% , Energy & Nat Res iS GS, IGE
0.71% , Pacific VIPERs, VPL
0.70% , SmallCap Value S&P 600 iS, IJS
0.68% , SmallCap Value Russell 2000 iS, IWN
0.66% , Pacific ex-Japan, EPP
0.66% , SmallCap Blend S&P 600 iS, IJR
0.65% , Energy Global, IXC
0.62% , China LargeCap Growth G D H USX PS, PGJ
0.62% , Growth SmallCap VIPERs, VBK
0.62% , Small Cap VIPERs, VB
0.61% , Agriculture DB PS, DBA
0.61% , Dividend ex-U.S. DJ iS, IDV
0.61% , Dividend International, PID
0.61% , Value MidCap Russell, IWS
0.60% , Growth VIPERs, VUG
0.57% , Value SmallCap VIPERS, VBR
0.57% , SmallCap Blend EAFE MSCI iS, SCZ
0.57% , SmallCap Blend Russell 2000 iS, IWM
0.53% , MidCap Russell, IWR
0.53% , Bond Ex-US Treas, BWX
0.51% , Malaysia Index, EWM
0.50% , Transportation Av DJ, IYT
0.49% , Telecom DJ US, IYZ
0.48% , LargeCap Growth Russell 1000 iS, IWF
0.48% , Belgium Index, EWK
0.47% , Energy DJ, IYE
0.45% , Growth MidCap Russell, IWP
0.44% , SmallCap Growth S&P 600 iS, IJT
0.44% , Financials VIPERs, VFH
0.43% , Switzerland Index, EWL
0.42% , Financial DJ US, IYF
0.42% , Singapore Index, EWS
0.42% , Utilities VIPERs, VPU
0.40% , Energy SPDR, XLE
0.39% , Energy VIPERs, VDE
0.39% , Bond, Emerging Mkt JPM iS, EMB
0.38% , Global ex U.S. LargeCap Blend, ACWX
0.38% , LargeCap Blend S&P=Weight R, RSP
0.38% , Value EAFE MSCI, EFV
0.37% , SmallCap Growth Russell 2000 iS, IWO
0.37% , Global LargeCap Blend MSCI iS, ACWI
0.36% , Water Resources, PHO
0.36% , Financial Services DJ, IYG
0.34% , Hong Kong Index, EWH
0.33% , Gold Shares S.T., GLD
0.33% , LargeCap Blend Russell 1000 iS, IWB
0.31% , WilderHill Clean Energy PS, PBW
0.31% , Bond, High Yield Corp iBoxx iS, HYG
0.31% , Bond, High-Yield Junk, JNK
0.30% , Blend Total Market VIPERs, VTI
0.30% , Microcap Russell, IWC
0.30% , Dividend Appreciation Vipers, VIG
0.30% , South Africa Index, EZA
0.29% , LargeCap Blend Russell 3000 iS, IWV
0.28% , Consumer Discretionary SPDR, XLY
0.27% , Financial SPDR, XLF
0.27% , Utilities SPDR, XLU
0.26% , LargeCap VIPERs, VV
0.24% , Basic Materials DJ US, IYM
0.24% , S&P 500 SPDRs LargeCap Blend, SPY
0.22% , LargeCap Blend S&P 500 iS, IVV
0.21% , Financial Preferred, PGF
0.19% , LargeCap Value S&P 500 iS, IVE
0.18% , LargeCap Growth S&P 500 iS, IVW
0.17% , Dividend U.S. DJ iS, DVY
0.17% , Growth EAFE MSCI, EFG
0.17% , Austria Index, EWO
0.15% , Materials SPDR, XLB
0.13% , Foreign LargeCap EAFE MSCI iS, EFA
0.11% , LargeCap Blend S&P 100, OEF
0.11% , DIAMONDS (DJIA), DIA
0.10% , Preferred Stock iS, PFF
0.09% , LargeCap Value Russell 1000 iS, IWD
0.07% , Bond, Muni S&P ATM-Free iS, MUB
0.06% , Bond, 20+ Years Treasury, TLT
0.05% , Europe 350 S&P Index, IEV
0.04% , European VIPERs, VGK
0.02% , Industrial SPDR, XLI
0.01% , Bond Treasury Short-Term iS, SHV
0.00% , Value VIPERs, VTV
0.00% , EMU Europe Index, EZU
-0.01% , Bond, 1-3 Year Treasury, SHY
-0.01% , Dividend SPDR, SDY
-0.02% , Bond, Intermediate US Aggregate iS, AGG
-0.02% , Bond, 10 Year Treasury, IEF
-0.03% , Global 100, IOO
-0.05% , Netherlands Index, EWN
-0.06% , Bond, TIPS U.S. Treasury iS, TIP
-0.08% , Value LargeCap Dynamic PS, PWV
-0.16% , France Index, EWQ
-0.17% , Bond, Long-Term Corp iBoxx iS, LQD
-0.20% , Consumer Staples SPDR, XLP
-0.21% , United Kingdom Index, EWU
-0.30% , Bear, Short S&P 500, SH
-0.34% , Silver Trust iS, SLV
-0.42% , Spain Index, EWP
-0.53% , Italy Index, EWI
-0.69% , Homebuilders SPDR, XHB
-0.69% , Dividend High Yield Equity PS, PEY
-0.75% , Health Care SPDR, XLV
-0.76% , Commodity Tracking, DBC
-0.85% , Biotech SPDR, XBI
-1.26% , Oil Fund PowerShares, DBO
-1.34% , Oil, Crude, U.S. Oil Fund, USO
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The S&P 500 Composite Potential Resistance
1597.57, intraday high of 4/30/2013
The S&P 500 Composite Potential Support
1552.97, 50-day SMA
1536.03, low of 4/18/2013
1485.01, low of 2/26/2013
1474.51, high of 9/14/2012
1463.76, low of 1/15/2013
1460.41, 200-day SMA
1451.64, low on 1/8/13
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
