The Number of Net New Highs on the NYSE (Daily New Highs minus Daily NYSE Daily New Lows) were 280 on Tuesday, down from 426 on 2/1/13. That diminishing number also is below the numbers for January and September. With many of the price indexes rising new highs, the number of stocks making new highs also should be rising.
Stocks opened unchanged, tried to rally during lunch, only to give most of their gains back after 1:30 p.m. ET on Tuesday: the S&P 500 (SPX: 1,519.43) finished up 0.16%, the Nasdaq Composite Index rose 0.17%, the Dow Jones Industrial Average gained 0.34%, but the Dow Jones Transportation Average fell 0.04%.
Bullish momentum appears to be stalling out. Although the S&P 500 rose modestly so far in February, popular daily price momentum oscillators have moved lower and are showing bearish momentum divergences. For example, RSI(14) is now 67.04, down from 74.46 on 1/29/13. MACD(12,26,9) also peaked on 1/29/13. MACD crossed below its signal line on 2/4/13 and remains below it. Momentum is a leading indicator of price.
“BofA’s proprietary measure of investor sentiment is clocking in at extreme levels. According to the firm’s Bull & Bear Index, which tracks sentiment using indicators like hedge fund market exposure, fund flows, long-only investor positioning and so forth, investors are more bullish than they were in 99% of periods since 2002.”–Joe Weisenthal, Business Insider
The Art of Contrary Thinking called for questioning strong bullish sentiment. Investor sentiment data indicated high degrees of optimism and bullish complacency in recent weeks, matching or exceeding extremes in September, 2012, when many stock price indexes hit peaks and reversed to the downside. Elevated levels of optimism are bearish because when the majority is extremely bullish, investors are already fully invested in the market. Once everyone who is going to buy has already bought, stocks are vulnerable to a downside shakeout. The pendulum of emotion tends to swing too far in one direction, but the market mood always reverts to the mean–eventually. Sentiment extremes are a leading indicator of price.
Our clients’ separately managed accounts made gains in 6 of the past 7 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).
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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
The S&P 500 Composite Potential Support
1495.02, low of 2/4/2013
1489.46, low of 1/24/2013
1474.51, high of 9/14/2012
1463.76, low of 1/15/2013
1460.92, 50-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
1425.48, Fibonacci 23.6% of June-Sept ’12 range
1424.41, Fibonacci 61.8% of Sept-Nov ’12 range
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
1404.35, 200-day SMA
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
1395.14, Fibonacci 38.2% of June-Sept 2012 range
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
1370.62, 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
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
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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Fixed-Income Investments
Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) price stabilized last week after hitting an “oversold” low at 115.51 on 2/1/13. TLT turned systematically bearish on 1/25/13 when the 50-day SMA crossed down below the 200-day SMA. Support 115.51, 114.82, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance: 117.85, 120.70, 123.71, 126.08, 127.19, 127.72, 130.69, and 132.22.
Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) fell below its 50-day SMA on 12/12/12, thereby turning systematically neutral again. IEF whipsawed back down below its 200-day SMA again on 1/2/13. IEF’s 50-day SMA has remained above the 200-day SMA every day since 6/21/11. Support 105.56, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance: 106.45, 107.35, 108.07, 108.15, 109.20, 109.32, and 109.89.
Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) 50-day SMA crossed above the 200-day SMA on 1/14/13, thereby turning systematically bullish. Price peaked on 1/25/13, turned neutral on 2/1/13, and fell below the lows of the previous 2 months on 2/7/13.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) turned systematically bullish again on 1/17/13 when it whipsawed back above its 50-day SMA. TIP/IEF rose above its 200-day SMA on 9/27/12, and the 50-day SMA rose above the 200-day SMA on 10/10/12. Price peaked on 12/6/12 and turned neutral on 12/13/12.
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Tangible Assets, Commodities
U.S. dollar ETF (UUP) turned systematically neutral on 2/7/13 when it rose above its 50-day SMA. 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 21.53, 21.07, and 20.84. Resistance 22.05, 22.30, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.
Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price fell below 7-months lows on 2/12/13. Price turned systematically bearish on 1/11/13 when the 50-day SMA crossed down below the 200-day SMA.
Crude Oil, United States Oil ETF (USO) price turned systematically neutral on 12/26/12, when price rose above its 50-day SMA. The 50-day SMA has remained below its 200-day SMA consistently every day since 6/7/12, although the 50-200 spread has narrowed since 1/3/13 and a bullish crossover appears probable in days ahead. Support 34.38, 33.57, 31.00, 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 turned systematically neutral on 11/27/12, when it fell below its 50-day SMA. Support: 158.39, 157.40, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 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 on 12/27/12, when the 50-day SMA crossed below the 200-day SMA.
Silver, iShares Silver Trust ETF (SLV) price appears to be in a neutral trading range, whipsawing around its 50-day and 200-day SMAs since 10/19/12. Support 29.71, 28.61, 27.97, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 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) appears to be in a neutral trading range, whipsawing around its 50-day and 200-day SMAs since 10/19/12.
Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) rose above its highs of the previous 3 months on 2/1/13, which generally could be taken as a bullish signal, but there was no follow through and price has drifted lower. JJC has been consolidating in trading range between 38.99 and 51.41 since October, 2011, and still may not be ready to pick a sustainable direction. “Dr. Copper” is widely accepted as one of the better indicators of investor confidence (or lack thereof) in the global industrial economy.
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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
20.31% , AVP , AVON
12.48% , MAS , MASCO
5.76% , KBH , KB HOME
4.93% , DHI , D.R. HORTON, DHI
5.29% , PHM , PULTE HOMES
2.07% , S , SPRINT NEXTEL
2.50% , ININ , Interactive Intelligence ININ
3.25% , BAC , BANK OF AMERICA
3.03% , XHB , Homebuilders SPDR, XHB
3.97% , JNY , JONES APPAREL
2.76% , RFMD , RF Micro Devices Inc
0.87% , XSD , Semiconductor SPDR, XSD
2.56% , NBR , NABORS
1.85% , LAMR , Lamar Advertising Company
0.84% , VMC , VULCAN MATERIALS
1.26% , BRCM , BROADCOM STK A
1.50% , AMP , Ameriprise Financial Inc.
2.78% , C , CITIGROUP
1.43% , SIRI , Sirius Satellite
2.05% , SWK , Stanley Black & Decker
1.80% , AA , ALCOA
0.74% , IPG , INTERPUBLIC GRP
2.20% , CR , CRANE
0.55% , IGV , Software, IGV
2.80% , OMX , OFFICEMAX INC., OMX
1.40% , HBAN , HUNTINGTON
0.45% , PRF , Value LargeCap Fundamental RAFI 1000, PRF
4.07% , LEN , Lennar Corp. (LEN)
1.48% , DISH , EchoStar Communications
2.45% , SJM , J. M. Smucker
1.40% , IDX , Indonesia MV, IDX
1.78% , NEM , NEWMONT MINING
0.85% , CMCSA , COMCAST HOLDINGS STK A
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-13.58% , LVLT.K , LEVEL 3 COMMUNICATIONS
-2.79% , LXK , LEXMARK INTL STK A
-2.72% , KO , COCA COLA
-3.30% , APOL , APOLLO GROUP
-1.93% , QCOM , QUALCOMM
-0.91% , MMC , MARSH & MCLENNAN
-1.51% , AFL , AFLAC
-1.81% , DGX , QUEST DIAG
-2.08% , AIG , AMER INTL GROUP
-1.36% , COF , CAPITAL ONE FNCL
-0.85% , LO , Lorillard, Inc. LO
-0.84% , SEE , SEALED AIR
-1.55% , NCR , NCR
-1.29% , ESRX , EXPRESS SCRIPTS
-0.93% , LTD , LIMITED BRANDS
-0.32% , IYZ , Telecom DJ US, IYZ
-1.41% , CSCO , CISCO SYSTEMS
-0.35% , JKE , Growth LargeCap iS M, JKE
-1.44% , GPS , GAP
-0.37% , PRU , PRUDENTIAL FINL
-0.78% , IGT , INTL GAME TECH
-0.50% , GRMN , GARMIN LTD
-0.26% , MO , ALTRIA, MO
-0.70% , JWN , NORDSTROM
-0.26% , PEP , PEPSICO
-0.22% , DPS , Dr Pepper Snapple Group
-1.33% , TDC , Teradata Corporation, TDC
-0.52% , BSX , BOSTON SCIENT
-0.15% , VUG , Growth VIPERs, VUG
-1.05% , HSP , HOSPIRA
-0.21% , CAG , CONAGRA FOODS
-0.25% , BLK , BlackRock Inc.
-0.82% , AZO , AUTOZONE
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
3.03% Homebuilders SPDR, XHB
2.49% Spain Index, EWP
1.40% Indonesia MV, IDX
1.39% Turkey MSCI iS, TUR
1.20% WilderHill Clean Energy PS, PBW
1.19% EMU Europe Index, EZU
1.13% Belgium Index, EWK
1.12% India PS, PIN
1.10% France Index, EWQ
1.04% Financial Services DJ, IYG
0.98% European VIPERs, VGK
0.98% Italy Index, EWI
0.90% Water Resources, PHO
0.87% Semiconductor SPDR, XSD
0.87% Sweden Index, EWD
0.82% Europe 350 S&P Index, IEV
0.80% Germany Index, EWG
0.78% India Earnings WTree, EPI
0.76% Financial SPDR, XLF
0.75% REIT VIPERs, VNQ
0.75% Realty Cohen & Steers, ICF
0.73% Financials VIPERs, VFH
0.71% Capital Markets KWB ST, KCE
0.66% United Kingdom Index, EWU
0.66% Austria Index, EWO
0.66% REIT Wilshire, RWR
0.63% SmallCap Value Russell 2000 iS, IWN
0.62% Financial DJ US, IYF
0.62% Netherlands Index, EWN
0.62% Value EAFE MSCI, EFV
0.61% Value SmallCap VIPERS, VBR
0.59% Real Estate US DJ iS, IYR
0.55% Microcap Russell, IWC
0.55% Dividend ex-U.S. DJ iS, IDV
0.54% Growth EAFE MSCI, EFG
0.51% MidCap Value S&P 400 iS, IJJ
0.50% Energy Global, IXC
0.50% Dividend High Yield Equity PS, PEY
0.50% Foreign LargeCap EAFE MSCI iS, EFA
0.48% MidCap S&P 400 SPDRs, MDY
0.47% Energy & Nat Res iS GS, IGE
0.46% Global 100, IOO
0.46% Oil, Crude, U.S. Oil Fund, USO
0.45% SmallCap Blend S&P 600 iS, IJR
0.45% Canada Index, EWC
0.45% LargeCap Value S&P 500 iS, IVE
0.45% LargeCap Value Russell 1000 iS, IWD
0.44% Industrial SPDR, XLI
0.44% SmallCap Blend Russell 2000 iS, IWM
0.44% Utilities VIPERs, VPU
0.44% Oil Fund PowerShares, DBO
0.44% Value MidCap Russell, IWS
0.44% Utilities SPDR, XLU
0.43% MidCap Blend S&P 400 iS, IJH
0.42% Global ex U.S. LargeCap Blend, ACWX
0.42% SmallCap Growth S&P 600 iS, IJT
0.42% SmallCap Value S&P 600 iS, IJS
0.41% Value VIPERs, VTV
0.41% Metals & Mining SPDR, XME
0.40% Small Cap VIPERs, VB
0.40% Consumer Discretionary SPDR, XLY
0.38% Global LargeCap Blend MSCI iS, ACWI
0.38% DIAMONDS (DJIA), DIA
0.36% Singapore Index, EWS
0.35% Bond Ex-US Treas, BWX
0.35% Switzerland Index, EWL
0.35% Malaysia Index, EWM
0.34% Bond, High Yield Corp iBoxx iS, HYG
0.34% Growth SmallCap VIPERs, VBK
0.33% LargeCap Blend S&P=Weight R, RSP
0.32% Bond, High-Yield Junk, JNK
0.30% Silver Trust iS, SLV
0.27% Emerging Markets MSCI iS, EEM
0.27% Dividend SPDR, SDY
0.27% Frontier Markets Guggenheim , FRN
0.27% Energy SPDR, XLE
0.26% Dividend U.S. DJ iS, DVY
0.26% SmallCap Blend EAFE MSCI iS, SCZ
0.25% Thailand MSCI iS, THD
0.25% SmallCap Growth Russell 2000 iS, IWO
0.24% MidCap Russell, IWR
0.22% Energy DJ, IYE
0.22% LargeCap Blend S&P 500 iS, IVV
0.22% Taiwan Index, EWT
0.21% Energy VIPERs, VDE
0.20% MidCap Growth S&P 400 iS, IJK
0.20% Emerging 50 BLDRS, ADRE
0.20% Hong Kong Index, EWH
0.18% LargeCap Blend Russell 1000 iS, IWB
0.18% LargeCap Blend Russell 3000 iS, IWV
0.18% Commodity Tracking, DBC
0.17% Semiconductor iS IGW, SOXX
0.17% Blend Total Market VIPERs, VTI
0.16% S&P 500 SPDRs LargeCap Blend, SPY
0.16% LargeCap VIPERs, VV
0.16% Emerging VIPERs, VWO
0.15% China 25 iS, FXI
0.14% Pacific ex-Japan, EPP
0.14% Basic Materials DJ US, IYM
0.13% Latin Am 40, ILF
0.13% Growth MidCap Russell, IWP
0.13% Brazil Index, EWZ
0.12% Preferred Stock iS, PFF
0.12% Gold Shares S.T., GLD
0.11% Australia Index, EWA
0.11% Financial Preferred, PGF
0.10% LargeCap Blend S&P 100, OEF
0.06% Dividend Appreciation Vipers, VIG
0.06% Dividend International, PID
0.05% Materials SPDR, XLB
0.04% Value LargeCap Dynamic PS, PWV
0.01% Transportation Av DJ, IYT
0.00% South Korea Index, EWY
0.00% Bond Treasury Short-Term iS, SHV
-0.01% Bond, TIPS U.S. Treasury iS, TIP
-0.01% Chile MSCI iS, ECH
-0.02% Bond, Intermediate US Aggregate iS, AGG
-0.03% Bond, 1-3 Year Treasury, SHY
-0.06% Bond, Muni S&P ATM-Free iS, MUB
-0.08% LargeCap Growth S&P 500 iS, IVW
-0.08% Mexico Index, EWW
-0.10% Bond, Long-Term Corp iBoxx iS, LQD
-0.10% Bond, Emerg Mkt JPM iS, EMB
-0.10% Bond, 10 Year Treasury, IEF
-0.11% Consumer Staples SPDR, XLP
-0.12% Health Care SPDR, XLV
-0.15% Growth VIPERs, VUG
-0.16% Bear, Short S&P 500, SH
-0.16% LargeCap Growth Russell 1000 iS, IWF
-0.17% Russia MV, RSX
-0.20% Pacific VIPERs, VPL
-0.20% China LargeCap Growth G D H USX PS, PGJ
-0.25% Bond, 20+ Years Treasury, TLT
-0.32% Telecom DJ US, IYZ
-0.33% Technology SPDR, XLK
-0.37% South Africa Index, EZA
-0.37% Info Tech VIPERs, VGT
-0.41% Agriculture DB PS, DBA
-0.41% QQQ Nasdaq 100 Trust, QQQ
-0.47% Biotech SPDR, XBI
-0.52% Technology DJ US, IYW
-0.53% Networking, IGN
-0.69% Japan Index, EWJ
