Many stock price indexes, but not all, broke out above 4-year highs last week. The S&P 500 (SPX: 1,437.92) did, with a gain of 2.23% for the week.
The number of NYSE stocks making new highs is still below July’s peak, although only slightly below now, indicating bearish divergence.
RSI for the SPX is in the overbought zone that has marked previous market highs.
The S&P 500 (SPX: 1,437.92) rose 5.80 points or 0.40% on Friday, while NYSE volume fell 6% to a level 2% below its 200-day SMA. Volume fell to its lowest levels in 13 years in August, reflecting diminishing enthusiasm for stocks. NYSE Volume 50-day SMA and 200-day SMA fell to their lowest levels in 13 years, and both are still trending down.
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: it recovered only 74% of its March-June loss. Clearly, 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.
While the S&P 500 Composite Price Index rose to a new 4-year high last week, both the percentage of these same 500 stocks that are above their 200-day SMAs (now at 77, down from a peak above 85 in March) and the percentage in bullish Point-and-Figure Chart uptrends (now at 75, down from a peak above 85 in February) failed to confirm that higher high. Although both rose last week, both market breadth indicators still are diverging bearishly compared to the S&P 500 Composite Stock Price Index.
Investor sentiment data indicates alarming degrees of optimism and bullish complacency as the stock price indexes rise above their 2012 market highs. The pendulum of emotion tends to swing too far in one direction, but market mood always reverts to the mean, as it did during the -10% April-June 2012 downside price correction for the stock market.
The technical condition of the stock market does not support the optimism of the bullish majority of stock investors and traders.
The S&P 500 is about 12 points below its upper channel resistance line and about 48 points above its lower channel support line, as shown by the blue lines on the chart*. If the S&P continues to fluctuate within this channel, as it commonly does, then potential risk to the lower line is now about 4 times potential reward to the upper line. 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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Tangible Assets, Commodities
U.S. dollar ETF (UUP) remains systematically neutral: below its 50-day SMA, below its 200-day SMA, and its 50-day SMA has stayed above its 200-day SMA every day since 10/26/11. Support 21.89, 21.74, 21.58, 21.07, and 20.84. Resistance 22.45, 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. The 50-200 SMA spread is narrowing rapidly, however, and a bullish crossover appears likely in weeks ahead.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) remains 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) 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 below its 200-day SMA. Support 34.34, 32.45, 31.40, 29.02, 26.28, and 22.74. Resistance 36.45, 36.97, 40.29, 41.38, 42.30, and 45.60.
Gold, SPDR Gold Shares ETF (GLD) rose above its 200-day SMA on 8/22/12 and rose above its 50-day SMA on 8/3/12. GLD remains systematically neutral because its 50-day SMA has stayed below its 200-day SMA every day since 4/17/12. The 50-200 SMA spread is narrowing, however, and a bullish crossover appears possible in weeks ahead. Support: 159.56, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 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. 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 rose above its 50-day SMA on 8/3/12, thereby turning systematically neutral. SLV price rose above its 200-day SMA on 8/31/12. The price 50-day SMA has remained below its 200-day SMA every day since 10/27/11, but the 50-200 SMA spread is narrowing. Support 29.28, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 33.44, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.
Silver/Gold ETFs Ratio (SLV/GLD) rose above its 50-day SMA on 8/16/12, thereby turning systematically neutral. SLV/GLD rose above its 200-day SMA on 8/31/12. SLV/GLD remains systematically neutral because its 50-day SMA has stayed below its 200-day SMA every day since 8/30/11. The 50-200 SMA spread has been narrowing over the past two weeks, however, and a bullish crossover could be possible in weeks ahead if the SLV/GLD remains strong.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price rose above its 50-day SMA on 8/21/12, thereby turning systematically neutral. Price rose above its 200-day SMA on 9/7/12. JJC remains systematically neutral because its 50-day SMA has remained below its 200-day SMA every day since 5/31/12. The 50-200 SMA spread has begun to narrow over the past few weeks, however. Given that “Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, this strengthening from bearish to neutral may be suggesting less pessimism 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
0.43% , ISI , LargeCap Blend S&P 1500 iS, ISI
8.50% , FCX , FREEPRT MCMORAN STK B
0.61% , JKH , MidCap Growth iS M, JKH
14.49% , CLF , CLIFFS NATURAL RESOURCES, CLF
11.81% , MTG , MGIC INVESTMENT
1.67% , ITF , Japan LargeCap Blend TOPIX 150, ITF
8.75% , X , US STEEL CORP
4.99% , NIHD , NII Holdings, Inc.
5.12% , XME , Metals & Mining SPDR, XME
0.81% , PEJ , Leisure & Entertainment, PEJ
1.35% , DGT , Global Titans, DGT
3.88% , AA , ALCOA
2.31% , IGE , Energy & Nat Res iS GS, IGE
1.51% , IDX , Indonesia MV, IDX
1.49% , DBO , Oil Fund PowerShares, DBO
3.88% , HAL , HALLIBURTON
2.84% , FXI , China 25 iS, FXI
4.09% , HES , AMERADA HESS
2.75% , COL , ROCKWELL COLLINS
1.96% , EZU , EMU Europe Index, EZU
1.32% , VIA.O , VIACOM INC. (New)
3.90% , CAT , CATERPILLAR
1.83% , ZMH , ZIMMER HLDGS
0.69% , VCR , Consumer D. VIPERs, VCR
0.43% , IWP , Growth MidCap Russell, IWP
2.46% , PXE , Energy Exploration & Prod, PXE
0.14% , IGM , Technology GS, IGM
2.62% , IYM , Basic Materials DJ US, IYM
1.21% , ADRU , Europe 100 BLDRS, ADRU
0.26% , IYC , Consumer Cyclical DJ, IYC
1.40% , RL , Polo Ralph Lauren
0.20% , XLG , LargeCap Rydex Rus Top 50, XLG
3.07% , STI , SUNTRUST BANKS
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-3.61% , INTC , INTEL
-5.74% , AMD , ADV MICRO DEV
-1.37% , WPO , Washington Post
-0.58% , PMR , Retail, PMR
-3.82% , MU.O , MICRON TECH
-2.25% , CAH , CARDINAL HEALTH
-1.50% , ETR , ENTERGY
-1.15% , HSY , HERSHEY FOODS
-0.38% , VPU , Utilities VIPERs, VPU
-0.61% , PSI , Semiconductors, PSI
-2.37% , CTL , CENTURYTEL
-0.70% , VDC , Consumer Staples VIPERs, VDC
-0.49% , FMCN , Focus Media, FMCN
-1.24% , PMTC.O , PARAMETRIC
-1.60% , KR , KROGER
-1.09% , KLAC , KLA TENCOR
-2.40% , NVDA , NVIDIA
-0.23% , IYK , Consumer Non-Cyclical, IYK
-1.33% , TGT , TARGET
-0.39% , SIRI , Sirius Satellite
-0.58% , MYY , Short 100% MidCap 400, MYY
-0.27% , SOXX , Semiconductor iS IGW, SOXX
-0.22% , PST , 200% Short Bond 7-10 Yr T, PST
-0.94% , SNI , Scripps Networks Interactive
-0.80% , XLP , Consumer Staples SPDR, XLP
-0.36% , EMR , EMERSON ELECTRIC
-1.70% , RAI , Reynolds American
-0.48% , BK , BANK OF NEW YORK
-0.38% , PJP , Pharmaceuticals, PJP
-0.06% , IYW , Technology DJ US, IYW
-0.81% , ASH , ASHLAND
-0.93% , MO , ALTRIA, MO
-0.60% , SJM , J. M. Smucker
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
5.12% Metals & Mining SPDR, XME
3.23% Italy Index, EWI
3.23% Sweden Index, EWD
3.06% Silver Trust iS, SLV
2.99% Russia MV, RSX
2.84% China 25 iS, FXI
2.79% Brazil Index, EWZ
2.62% Basic Materials DJ US, IYM
2.48% Hong Kong Index, EWH
2.36% South Korea Index, EWY
2.35% Emerging VIPERs, VWO
2.31% Energy & Nat Res iS GS, IGE
2.30% Emerging Markets MSCI iS, EEM
2.23% Germany Index, EWG
2.21% India Earnings WTree, EPI
2.15% Gold Shares S.T., GLD
2.11% Austria Index, EWO
2.06% France Index, EWQ
1.97% Materials SPDR, XLB
1.96% EMU Europe Index, EZU
1.94% Spain Index, EWP
1.89% Emerging 50 BLDRS, ADRE
1.85% Oil, Crude, U.S. Oil Fund, USO
1.84% Latin Am 40, ILF
1.75% Energy VIPERs, VDE
1.73% Energy SPDR, XLE
1.71% Canada Index, EWC
1.70% Value EAFE MSCI, EFV
1.67% Energy DJ, IYE
1.65% Netherlands Index, EWN
1.64% Energy Global, IXC
1.62% Belgium Index, EWK
1.56% Global ex U.S. LargeCap Blend, ACWX
1.53% Turkey MSCI iS, TUR
1.51% Chile MSCI iS, ECH
1.51% Indonesia MV, IDX
1.50% Foreign LargeCap EAFE MSCI iS, EFA
1.49% Oil Fund PowerShares, DBO
1.47% Europe 350 S&P Index, IEV
1.46% India PS, PIN
1.43% Financial Services DJ, IYG
1.42% Taiwan Index, EWT
1.41% European VIPERs, VGK
1.34% Japan Index, EWJ
1.33% SmallCap Blend EAFE MSCI iS, SCZ
1.28% Pacific VIPERs, VPL
1.27% Pacific ex-Japan, EPP
1.21% Growth EAFE MSCI, EFG
1.21% Bond Ex-US Treas, BWX
1.12% Networking, IGN
1.12% Commodity Tracking, DBC
1.09% Dividend ex-U.S. DJ iS, IDV
1.08% South Africa Index, EZA
1.07% Switzerland Index, EWL
1.06% Global LargeCap Blend MSCI iS, ACWI
1.04% United Kingdom Index, EWU
1.04% Capital Markets KWB ST, KCE
1.03% Financial SPDR, XLF
0.99% Dividend International, PID
0.95% Financials VIPERs, VFH
0.93% China LargeCap Growth G D H USX PS, PGJ
0.91% SmallCap Value Russell 2000 iS, IWN
0.89% Global 100, IOO
0.88% Financial DJ US, IYF
0.86% Industrial SPDR, XLI
0.85% SmallCap Value S&P 600 iS, IJS
0.84% Singapore Index, EWS
0.83% Mexico Index, EWW
0.78% Value SmallCap VIPERS, VBR
0.76% Australia Index, EWA
0.74% SmallCap Blend Russell 2000 iS, IWM
0.73% Transportation Av DJ, IYT
0.71% Frontier Markets Guggenheim , FRN
0.71% Value MidCap Russell, IWS
0.71% WilderHill Clean Energy PS, PBW
0.71% Small Cap VIPERs, VB
0.71% SmallCap Blend S&P 600 iS, IJR
0.69% LargeCap Blend S&P=Weight R, RSP
0.67% LargeCap Value Russell 1000 iS, IWD
0.64% MidCap Russell, IWR
0.63% Growth SmallCap VIPERs, VBK
0.62% Water Resources, PHO
0.59% Malaysia Index, EWM
0.58% Value VIPERs, VTV
0.56% MidCap Growth S&P 400 iS, IJK
0.55% MidCap Blend S&P 400 iS, IJH
0.55% Consumer Discretionary SPDR, XLY
0.54% SmallCap Growth Russell 2000 iS, IWO
0.53% LargeCap Value S&P 500 iS, IVE
0.52% Microcap Russell, IWC
0.52% MidCap S&P 400 SPDRs, MDY
0.49% Blend Total Market VIPERs, VTI
0.48% LargeCap Blend Russell 1000 iS, IWB
0.45% MidCap Value S&P 400 iS, IJJ
0.45% LargeCap Blend S&P 500 iS, IVV
0.43% Bond, Emerg Mkt JPM iS, EMB
0.43% Growth MidCap Russell, IWP
0.43% LargeCap VIPERs, VV
0.42% LargeCap Blend Russell 3000 iS, IWV
0.39% S&P 500 SPDRs LargeCap Blend, SPY
0.39% SmallCap Growth S&P 600 iS, IJT
0.39% Growth VIPERs, VUG
0.38% LargeCap Blend S&P 100, OEF
0.37% Value LargeCap Dynamic PS, PWV
0.35% LargeCap Growth S&P 500 iS, IVW
0.33% Preferred Stock iS, PFF
0.32% Bond, TIPS U.S. Treasury iS, TIP
0.29% Thailand MSCI iS, THD
0.25% Bond, High-Yield Junk, JNK
0.24% LargeCap Growth Russell 1000 iS, IWF
0.22% Financial Preferred, PGF
0.21% Bond, Long-Term Corp iBoxx iS, LQD
0.20% Telecom DJ US, IYZ
0.18% Real Estate US DJ iS, IYR
0.17% Bond, High Yield Corp iBoxx iS, HYG
0.16% Homebuilders SPDR, XHB
0.13% Dividend Appreciation Vipers, VIG
0.13% Bond, 10 Year Treasury, IEF
0.12% Dividend SPDR, SDY
0.10% Dividend High Yield Equity PS, PEY
0.10% Agriculture DB PS, DBA
0.09% DIAMONDS (DJIA), DIA
0.09% REIT VIPERs, VNQ
0.09% Realty Cohen & Steers, ICF
0.06% Semiconductor SPDR, XSD
0.05% Bond, Muni S&P ATM-Free iS, MUB
0.02% Bond, 1-3 Year Treasury, SHY
0.02% Bond, Intermediate US Aggregate iS, AGG
0.01% REIT Wilshire, RWR
0.00% Bond Treasury Short-Term iS, SHV
-0.03% Info Tech VIPERs, VGT
-0.05% Health Care SPDR, XLV
-0.06% Technology DJ US, IYW
-0.12% Dividend U.S. DJ iS, DVY
-0.14% QQQ Nasdaq 100 Trust, QQQ
-0.16% Technology SPDR, XLK
-0.27% Semiconductor iS IGW, SOXX
-0.33% Utilities SPDR, XLU
-0.38% Utilities VIPERs, VPU
-0.47% Bond, 20+ Years Treasury, TLT
-0.47% Biotech SPDR, XBI
