Utilities stock sector Relative Strength Ratio (XLU/SPY) fell below its 50-day SMA on 11/5/12, thereby turning systematically bearish.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) turned systematically neutral on 11/5/12 when GDX/GLD fell below its 50-day SMA.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the previous 9 weeks on 11/5/12. JJC price fell below its 50-day SMA on 10/22/12 and fell below its 200-day SMA on 10/19/12. “Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, and so this price weakness may be taken as a warning about economic conditions ahead.
The S&P 500 (SPX: 1,417.26) chart shows a descending 5-point reversal top: 1) a high on 9/14/12; 2) a low on 9/26/12; 3) a lower high on 10/5/12; 4) a lower low on 10/12/12; and 5) a final lower high on 10/18/12. These 5 points were immediately followed by a breakdown away from the top pattern. A classic throwback rally/reaction on Friday fizzled in the vicinity of the recent lows, exactly as a chartist would expect. The topping process appears to be complete.
The technical condition of the stock market does not support the excessive optimism that the bullish majority of stock investors and traders clearly exhibited over the past several months. Most of this optimism appeared to be based on expectations that the U.S. Fed and European Central Bank would buy bonds in unlimited quantities (with fiat currencies printed out of thin air and backed by nothing but a theory and a hope). Such inflation and debasement of the currencies bring with them unintended consequences, economic distortions and misallocation of financial resources, as well as potential for accelerating loss of purchasing power of the fiat currencies over the long term.
Typically, action is followed by reaction, and so a downside correction has produced losses for bullish investors starting from the second trading day after the latest Fed Quantitative Easing was announced on 9/13/12.
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*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 6 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 Dow-Jones Industrial Average rose above its closing price highs of the previous 4-years on 10/5/12, but the Dow-Jones Transportation Average has remained relatively weak, substantially below its 2012 high, thereby demonstrating non confirmation and bearish divergence.
NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) fell below its lows of the previous 9 months on 10/19/12, thereby confirming a downside correction. QQQ/SPY fell below its 50-day SMA on 9/28/12, thereby turning systematically neutral again. QQQ/SPY fell below its 200-day SMA on 10/8/12. The QQQ/SPY 50-day SMA has remained above the 200-day SMA since 8/5/11–but the 50-200 spread has been narrowing rapidly and is on track to cross bearishly in days ahead.
iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) turned systematically neutral on 9/13/12, when it rose above 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) turned systematically neutral on 9/13/12, when it rose above its 50-day SMA. EEM/SPY has been whipsawing around its 200-day SMA. The 50-day SMA has remained below the 200-day SMA every day since 2/3/11.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) turned systematically neutral again on 10/10/12, when it whipsawed back up above its 50-day SMA. EFA/SPY has been hovering indecisively near its 200-day SMA in recent days. Longer term, the 50-day SMA has remained below the 200-day SMA every day since 1/14/11. EFA/SPY has been trending down for nearly 5 years, since 11/27/2007, and there is no convincing evidence of any significant change in that major long-term downtrend.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) turned systematically neutral again on 10/11/12, when it fell below its 50-day SMA. OEF/SPY remains 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 50-day SMA on 10/12/12, thereby turning systematically bearish again. IWM/SPY fell below its 200-day SMA on 9/24/12, 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) whipsawed back up above its 50-day SMA on 10/23/12, thereby turning systematically neutral again. Longer term, the MDY/SPY 50-day SMA has been below the 200-day SMA since 6/6/12.
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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
1474.51, high of 9/14/2012
1464.02, high of 10/18/2012
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1434.55, 50-day SMA
1434.27, high of 11/2/2012
1430.53, low of 9/26/2012
1425.53, low of 10/12/2012
1425.48, Fibonacci 23.6% of June-Sept 2012 range
1422.38, high of 4/2/2012
1422.06, low of 10/22/2012
1421.12, high of 10/25/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
The S&P 500 Composite Potential Support
1403.28, low of 10/26/12
1396.56, low of 9/4/2012
1395.14, Fibonacci 38.2% of June-Sept 2012 range
1391.04, low of 8/6/2012
1388.71, low of 5/3/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1380.39, high of 7/19/2012
1379.44, 200-day SMA
1374.81, high of 7/3/2012
1370.62, Fibonacci 50.0% of June-Sept 2012 range
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
1346.11, Fibonacci 61.8% of June-Sept 2012 range
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
1311.20, Fibonacci 78.6% of June-Sept 2012 range
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
1257.58, Fibonacci 61.8% of 2011 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
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
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) price rose above its 50-day SMA on 11/2/12, thereby turning systematically neutral. UUP fell below its 200-day SMA on 8/31/12, and the 50-day SMA fell below the 200-day SMA on 10/2/12. Support 21.86, 21.57, 21.07, and 20.84. Resistance 22.36, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below its lows of the previous 3 months on 10/15/12, confirming a loss of upside momentum. DBA turned systematically neutral on 9/17/12 when price crossed below its 50-day SMA. Price remains above its 200-day SMA, and the 50-day SMA remains above the 200-day SMA.
Crude Oil, United States Oil ETF (USO) fell below its lows of the previous 4 months on 11/2/12, confirming its preexisting bearish trend. USO turned systematically bearish on 9/19/12, when price fell below its 50-day SMA. USO price fell below its 200-day SMA on 9/17/12, and the 50-day SMA remains below its 200-day SMA. Support 29.02, 26.28, and 22.74. Resistance 34.70, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) fell below its lows of the previous 2 months on 11/2/12, confirming its preexisting corrective trend. GLD turned systematically neutral on 10/23/12, when price fell below its 50-day SMA. GLD price rose above its 200-day SMA on 8/22/12. GLD 50-day SMA rose above the 200-day SMA on 9/20/12. Support: 159.56, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 167.28, 174.07, 175.46, 177.40, and 185.85.
Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) turned systematically neutral on 11/5/12 when it fell below its 50-day SMA. Longer term, the 50-day SMA has been above the 200-day SMA since 10/19/12.
Silver, iShares Silver Trust ETF (SLV) fell below its lows of the previous 2 months on 11/2/12, confirming its preexisting corrective trend. SLV fell below its 50-day SMA on 10/19/12, thereby turning systematically neutral. SLV fell below its 200-day SMA on 11/2/12. SLV price 50-day SMA crossed above the 200-day SMA on 10/1/12. Support 29.28, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 31.52, 32.23, 33.23, 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 months on 11/2/12, confirming its preexisting corrective trend. SLV/GLD fell below its 50-day SMA on 10/19/12, thereby turning systematically neutral again. SLV/GLD crossed back below its 200-day SMA on 11/2/12. Longer term, SLV/GLD 50-day SMA crossed above the 200-day SMA on 10/9/12.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the previous 9 weeks on 11/5/12. JJC price fell below its 50-day SMA on 10/22/12 and fell below its 200-day SMA on 10/19/12. “Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, and so this price weakness may be taken as a warning about economic conditions ahead.
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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
5.60% , RIG , TRANSOCEAN
4.90% , PWER , POWER ONE
4.24% , NVDA , NVIDIA
4.40% , ETFC , E*TRADE FINANCIAL
1.74% , SHLD , SEARS HOLDINGS
2.69% , BSX , BOSTON SCIENT
2.54% , MON , MONSANTO
2.56% , DDS , DILLARD STK A
2.51% , HMA , HEALTH MGMT STK A
0.94% , DBO , Oil Fund PowerShares, DBO
0.52% , IYM , Basic Materials DJ US, IYM
1.57% , CHD , Church & Dwight
1.32% , IFF , INTL FLAV & FRAG
1.87% , MRO , MARATHON OIL
1.09% , CSC , COMPUTER SCIENCE
0.85% , DBC , Commodity Tracking, DBC
0.53% , VIS , Industrials VIPERs, VIS
0.47% , IJJ , Value MidCap S&P 400 B, IJJ
0.32% , VPL , Pacific VIPERs, VPL
0.20% , IYT , Transportation Av DJ, IYT
0.15% , MUB , Bond Muni ATM-Free S&P iS, MUB
0.44% , IWN , Value SmallCap Russell 2000, IWN
0.41% , HUM , HUMANA
2.44% , TUR , Turkey MSCI iS, TUR
0.38% , NE , NOBLE
2.18% , RIMM , RESEARCH IN MOTION LTD
1.80% , HSIC , Henry Schein Inc
0.62% , IJS , Value SmallCap S&P 600 B, IJS
0.78% , MCHP , Microchip Technology Incorporated
2.42% , TER , TERADYNE
0.66% , EWA , Australia Index, EWA
0.17% , AGG , Bond, Aggregate, AGG
1.84% , WYN , Wyndham Worldwide
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-4.91% , PLL , PALL
-3.01% , LBTYA , Liberty Global Inc. (LBTYA)
-0.68% , FDL , Dividend Leaders, FDL
-4.02% , MHP , MCGRAW HILL
-2.96% , MCO , MOODYS CORP
-2.03% , ED , CON ED
-4.68% , ETR , ENTERGY
-1.39% , IDU , Utilities DJ, IDU
-0.78% , VIA.O , VIACOM INC. (New)
-4.30% , FE , FIRSTENERGY
-1.63% , XLU , Utilities SPDR, XLU
-7.68% , WYNN , Wynn Resorts L
-1.39% , FAST , Fastenal Company
-1.45% , DTE , DTE ENERGY
-1.60% , CCE , COCA COLA ENTER
-1.43% , XEL , XCEL ENERGY
-1.52% , VPU , Utilities VIPERs, VPU
-2.13% , UIS , UNISYS
-0.19% , VDC , Consumer Staples VIPERs, VDC
-0.88% , PIN , India PS, PIN
-0.93% , ADM , ARCHER DANIELS
-3.42% , NYT , NY TIMES STK A
-1.13% , EWI , Italy Index, EWI
-1.48% , JCP , JC PENNEY
-2.32% , WAG , WALGREEN
-1.37% , UNH , UNITEDHEALTH GRP
-1.05% , EL , Estee Lauder
-0.25% , EWC , Canada Index, EWC
-1.51% , CAH , CARDINAL HEALTH
-0.51% , IDX , Indonesia MV, IDX
-0.17% , XLP , Consumer Staples SPDR, XLP
-0.12% , BWX , Bond Ex-US Treas, BWX
-0.74% , IYR , Real Estate US DJ, IYR
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.44% Turkey MSCI iS, TUR
2.36% Semiconductor SPDR, XSD
2.32% Biotech SPDR, XBI
1.74% Semiconductor iS IGW, SOXX
1.47% Networking, IGN
1.44% Homebuilders SPDR, XHB
1.25% South Africa Index, EZA
1.17% China LargeCap Growth G D H USX PS, PGJ
0.95% Pacific ex-Japan, EPP
0.95% Taiwan Index, EWT
0.94% Oil Fund PowerShares, DBO
0.88% China 25 iS, FXI
0.85% Commodity Tracking, DBC
0.83% Oil, Crude, U.S. Oil Fund, USO
0.81% SmallCap Growth Russell 2000 iS, IWO
0.80% SmallCap Blend S&P 600 iS, IJR
0.78% Energy VIPERs, VDE
0.77% WilderHill Clean Energy PS, PBW
0.76% Energy SPDR, XLE
0.75% Russia MV, RSX
0.75% Microcap Russell, IWC
0.74% Hong Kong Index, EWH
0.74% Energy DJ, IYE
0.73% Silver Trust iS, SLV
0.73% Info Tech VIPERs, VGT
0.72% Technology DJ US, IYW
0.70% Growth SmallCap VIPERs, VBK
0.69% Materials SPDR, XLB
0.66% Australia Index, EWA
0.66% QQQ Nasdaq 100 Trust, QQQ
0.66% SmallCap Blend Russell 2000 iS, IWM
0.64% SmallCap Growth S&P 600 iS, IJT
0.62% SmallCap Value S&P 600 iS, IJS
0.62% MidCap S&P 400 SPDRs, MDY
0.61% Singapore Index, EWS
0.61% Capital Markets KWB ST, KCE
0.59% Growth MidCap Russell, IWP
0.58% MidCap Blend S&P 400 iS, IJH
0.56% Bond, 20+ Years Treasury, TLT
0.55% Technology SPDR, XLK
0.54% Industrial SPDR, XLI
0.53% Small Cap VIPERs, VB
0.53% MidCap Growth S&P 400 iS, IJK
0.52% Energy & Nat Res iS GS, IGE
0.52% Basic Materials DJ US, IYM
0.48% Emerging Markets MSCI iS, EEM
0.48% Brazil Index, EWZ
0.48% Emerging VIPERs, VWO
0.47% MidCap Value S&P 400 iS, IJJ
0.44% SmallCap Value Russell 2000 iS, IWN
0.43% LargeCap Growth Russell 1000 iS, IWF
0.43% MidCap Russell, IWR
0.40% Growth VIPERs, VUG
0.39% Gold Shares S.T., GLD
0.37% Value SmallCap VIPERS, VBR
0.37% LargeCap Blend S&P=Weight R, RSP
0.36% Metals & Mining SPDR, XME
0.35% Latin Am 40, ILF
0.35% Frontier Markets Guggenheim , FRN
0.35% Bond, Emerg Mkt JPM iS, EMB
0.35% South Korea Index, EWY
0.33% LargeCap Growth S&P 500 iS, IVW
0.32% Blend Total Market VIPERs, VTI
0.32% Pacific VIPERs, VPL
0.30% Thailand MSCI iS, THD
0.29% Dividend Appreciation Vipers, VIG
0.26% Value MidCap Russell, IWS
0.26% LargeCap VIPERs, VV
0.26% Consumer Discretionary SPDR, XLY
0.24% Bond, 10 Year Treasury, IEF
0.24% LargeCap Blend Russell 3000 iS, IWV
0.22% LargeCap Blend S&P 500 iS, IVV
0.22% LargeCap Blend S&P 100, OEF
0.20% S&P 500 SPDRs LargeCap Blend, SPY
0.20% LargeCap Blend Russell 1000 iS, IWB
0.20% Transportation Av DJ, IYT
0.17% Bond, Intermediate US Aggregate iS, AGG
0.15% DIAMONDS (DJIA), DIA
0.15% Bond, Muni S&P ATM-Free iS, MUB
0.13% Bond, TIPS U.S. Treasury iS, TIP
0.11% LargeCap Value Russell 1000 iS, IWD
0.11% Financial Preferred, PGF
0.11% Growth EAFE MSCI, EFG
0.09% LargeCap Value S&P 500 iS, IVE
0.09% Global LargeCap Blend MSCI iS, ACWI
0.09% Value VIPERs, VTV
0.08% Energy Global, IXC
0.05% Health Care SPDR, XLV
0.05% Bond, Long-Term Corp iBoxx iS, LQD
0.05% Value LargeCap Dynamic PS, PWV
0.04% Sweden Index, EWD
0.03% Dividend SPDR, SDY
0.03% Emerging 50 BLDRS, ADRE
0.03% Preferred Stock iS, PFF
0.00% Water Resources, PHO
0.00% Japan Index, EWJ
0.00% Global ex U.S. LargeCap Blend, ACWX
0.00% Bond, 1-3 Year Treasury, SHY
-0.02% Bond Treasury Short-Term iS, SHV
-0.02% Bond, High-Yield Junk, JNK
-0.03% Global 100, IOO
-0.04% Switzerland Index, EWL
-0.04% Germany Index, EWG
-0.11% Dividend High Yield Equity PS, PEY
-0.12% Bond Ex-US Treas, BWX
-0.12% Austria Index, EWO
-0.13% Chile MSCI iS, ECH
-0.13% Malaysia Index, EWM
-0.16% Bond, High Yield Corp iBoxx iS, HYG
-0.17% Consumer Staples SPDR, XLP
-0.17% United Kingdom Index, EWU
-0.18% Financials VIPERs, VFH
-0.19% Financial SPDR, XLF
-0.20% Bear, Short S&P 500, SH
-0.21% Telecom DJ US, IYZ
-0.23% Foreign LargeCap EAFE MSCI iS, EFA
-0.25% Canada Index, EWC
-0.26% Financial Services DJ, IYG
-0.27% Financial DJ US, IYF
-0.28% Dividend U.S. DJ iS, DVY
-0.31% Dividend ex-U.S. DJ iS, IDV
-0.31% Agriculture DB PS, DBA
-0.33% Value EAFE MSCI, EFV
-0.36% SmallCap Blend EAFE MSCI iS, SCZ
-0.38% Europe 350 S&P Index, IEV
-0.39% European VIPERs, VGK
-0.46% Dividend International, PID
-0.48% Mexico Index, EWW
-0.51% Indonesia MV, IDX
-0.52% Netherlands Index, EWN
-0.59% India Earnings WTree, EPI
-0.62% EMU Europe Index, EZU
-0.66% REIT VIPERs, VNQ
-0.71% Belgium Index, EWK
-0.73% REIT Wilshire, RWR
-0.74% Real Estate US DJ iS, IYR
-0.85% Realty Cohen & Steers, ICF
-0.88% France Index, EWQ
-0.88% India PS, PIN
-1.13% Italy Index, EWI
-1.31% Spain Index, EWP
-1.52% Utilities VIPERs, VPU
-1.63% Utilities SPDR, XLU
