Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) rose above 7-month highs and remains bullish.
S&P 500 Composite (SPX, 1,228.28) overcame morning weakness on Wednesday to close higher: up 4.53 points or 0.37% in less active trading. Quickly springing back from price dips is what I call “bullish resilience”, and it implies that there are willing buyers waiting to take advantage of price discounts. Over the past month, SPX tested and held above 1173.00, the low of 11/16/10, and the 50-day SMA now at 1187.87 and rising. And SPX held well above the 200-day SMA, now at 1137.25 and rising. Longer term, SPX rose above 2-year highs on 11/5/10, again reconfirming a bullish major trend.
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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 revealed to be deal stocks, sooner or later, 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
7.50% , LNC , LINCOLN NATL
5.82% , MAS , MASCO
0.76% , EWO , Austria Index, EWO
1.55% , EWI , Italy Index, EWI
7.17% , DYN , DYNEGY
0.84% , PIC , Insurance, PIC
0.74% , PJP , Pharmaceuticals, PJP
6.74% , MTG , MGIC INVESTMENT
9.41% , GNTX , Gentex Corporation
6.02% , CECO , CAREER EDUCATION CORP
5.32% , RF , REGIONS FINAN
5.50% , ZION , ZIONS
0.93% , EWL , Switzerland Index, EWL
0.64% , EWN , Netherlands Index, EWN
3.93% , PFG , PRINCIPAL FINL
3.01% , PHM , PULTE HOMES
5.08% , COF , CAPITAL ONE FNCL
3.52% , HIG , HARTFORD FINL
2.35% , MTB , M&T BANK
1.72% , PST , 200% Short Bond 7-10 Yr T, PST
2.96% , HMA , HEALTH MGMT STK A
3.93% , MET , METLIFE
6.50% , FITB , FIFTH THIRD BANC
2.35% , ISIL , INTERSIL CORP
3.39% , PRU , PRUDENTIAL FINL
1.98% , NVLS , NOVELLUS SYS
2.65% , UNM , UNUMPROVIDENT
3.25% , EK , EASTMAN KODAK
1.00% , FO , FORTUNE BRANDS
0.70% , IXN , Technology Global, IXN
2.92% , APOL , APOLLO GROUP
1.81% , NCR , NCR
1.91% , MCHP , Microchip Technology Incorporated
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.63% , PZJ , SmallCap PS Zacks, PZJ
-5.85% , FMCN , Focus Media, FMCN
-3.59% , HANS , Hansen Natural, HANS
-0.59% , PXN , Nanotech Lux, PXN
-3.31% , SIRI , Sirius Satellite
-6.13% , HRB , H&R BLOCK
-3.09% , CEPH , Cephalon Inc
-0.29% , ADRU , Europe 100 BLDRS, ADRU
-0.63% , TMW , Wilshire 5000 ST TM, TMW
-3.94% , AIG , AMER INTL GROUP
-1.08% , RFV , Value MidCap S&P 400, RFV
-1.70% , ICF , Realty Cohen & Steers, ICF
-1.81% , THD , Thailand MSCI iS, THD
-0.64% , LQD , Bond, Corp, LQD
-0.86% , IAH , Internet Architecture H, IAH
-3.14% , WY , WEYERHAEUSER
-1.52% , RWR , REIT Wilshire, RWR
-1.57% , FXI , China 25 iS, FXI
-0.98% , TIP , Bond, TIPS, TIP
-0.21% , EWG , Germany Index, EWG
-0.05% , DGT , Global Titans, DGT
-1.39% , ETR , ENTERGY
-1.10% , PDCO , Patterson Dental Company
-1.39% , OMC , OMNICOM
-0.85% , IEF , Bond, 10 Year Treasury, IEF
-0.96% , AEP , AM ELEC POWER
-0.38% , DPS , Dr Pepper Snapple Group
-0.82% , SO , SOUTHERN
-1.02% , EMB , Bond EmrgMkt JPM iS, EMB
-2.14% , S , SPRINT NEXTEL
-1.99% , MCD , MCDONALDS
-1.48% , VNQ , REIT VIPERs, VNQ
-1.44% , NOV , NATIONAL OILWELL VARC0
9 major U.S. stock sectors ranked in order of long-term relative strength:
Consumer Discretionary (XLY) Bullish, Over Weight. The Relative Strength Ratio (XLY/SPY) rose above 12-year highs on 11/26/10 and remains bullish. XLY has been at the top of my sector rankings for more than a year and has outperformed substantially. Absolute price rose above 3-year highs on 12/7/10 and remains bullish. Support 35.32, 35.02, 34.78, 33.94, 33.11, 32.66, 31.70, 29.80, 28.64, 28.21, and 26.62. Resistance 37.88, 38.25, and 39.09.
Energy (XLE) Bullish, Over Weight. The Relative Strength Ratio (XLE/SPY) rose further above 12-month highs on 12/6/10 and remains bullish. Absolute price rose further above 2-year highs on 12/6/10 and remains bullish. Support 60.96, 60.21, 57.70, 55.68, 53.22, 50.33, 48.56, 46.16, and 43.66. Resistance 67.00, 69.95, and 78.10.
Industrial (XLI) Bullish, Over Weight. The Relative Strength Ratio (XLI/SPY) rose above 2-year highs on 12/7/10 and remains bullish. Absolute price rose above 2-year highs on 12/7/10 and remains bullish. Support 31.82, 31.58, 30.79, 30.51, 30.32, 29.77, and 27.67. Resistance 34.43, 35.00, and 36.16.
Materials (XLB) Bullish, Over Weight. The Relative Strength Ratio (XLB/SPY) rose above 11-month highs on 12/7/10 and remains bullish. Absolute price rose above 2-year highs on 12/7/10 and remains bullish. Support 34.20, 33.70, 32.36, 29.88, 29.43, and 27.67. Resistance 37.61 and 39.00.
Technology (XLK) Bullish, Over Weight. The Relative Strength Ratio (XLK/SPY) rose above 8-year highs on 11/3/10, which was a bullish confirmation of the major trend. Absolute price of XLK rose above 2-year highs on 11/4/10 and remains bullish. Support 23.74, 23.64, 23.56, 22.68, 22.53, 21.60, 20.01, and 19.51. Resistance 25.28 and 25.69.
Consumer Staples (XLP) Bearish, Under Weight. The Relative Strength Ratio (XLP/SPY) fell further below 7-month lows on 12/6/10 and remains bearish. Absolute price has weakened since making a top at 29.06 on 111/4/10. Support 28.22, 28.04, 27.76, 27.63, 27.46, 26.34, 25.30, and 24.95. Resistance 28.85, 29.06, and 30.29.
Financial (XLF) Bearish, Under Weight. The Relative Strength Ratio (XLF/SPY) fell below 18-month lows on 11/26/10 and remains bearish. Absolute price of XLF fell below 9-week lows on 11/23/10, and the 50-day SMA remains below the 200-day SMA. Support 14.36, 14.25, 14.20, 13.29, and 13.08. Resistance 15.68, 16.13, 16.90, 17.12, 17.16, and 17.87.
Health Care (XLV) Bearish, Under Weight. The Relative Strength Ratio (XLV/SPY) fell below 2-year lows on 12/8/10 and remains bearish, as it has been most of the time since peaking on 2/23/09. Absolute price of XLV fell below 8-week lows on 11/29/10. Support 30.14, 30.11, 29.87, 28.00, 27.49. Resistance 31.73, 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.
Utilities (XLU) Bearish, Under Weight. The Relative Strength Ratio (XLU/SPY) fell below 7-month lows on 12/8/10 and remains bearish. Absolute price of XLU fell below 13-week lows on 11/29/10. Support 30.51, 29.66, 27.91, 27.44, and 25.76. Resistance 32.11 and 32.40.
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) broke down below 3-month lows on 11/26/10 and remains neutral.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) broke down below 5-month lows on 11/30/10 and remains neutral.
NASDAQ Composite/S&P 500 Relative Strength Ratio rose above 9-year highs on 11/26/10 and remains bullish for the long term. This RS Ratio has been in an uptrend for nearly 2 years, since 12/2/08. Absolute price rose above 2-year highs on 12/7/10 and remains bullish.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below 28-year lows on 12/3/10. This RS Ratio has been trending lower since 8/3/10. Longer term, big caps have been relatively out of favor for more than 10 years, since 3/29/2000.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) rose above 20-year highs on 12/7/10 and remains bullish. Absolute price rose above 2-year highs on 12/7/10 and remains bullish.
The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose above 15-year highs on 12/7/10 and remains bullish. Absolute price rose above 2-year highs on 12/7/10 and remains bullish.
Crude Oil nearest futures contract price pulled back down moderately this week, but that does not appear to have done significant damage to the uptrend. Longer term, Oil rose further above 2-year highs on 12/6/10, again confirming a bullish major trend. Support 83.55, 80.28, 80.06, 79.84, 79.25, 78.86, 72.63, 70.76, 70.35, 69.51, 68.59, 67.15, 65.05, and 64.24. Resistance 90.76, 98.65, and 102.84.
Gold nearest futures contract price fell below the lows of the previous 5 trading days on 12/8/10, confirming a minor price pullback for the short term. Longer term, Gold rose above previous all-time highs on 12/6/10, again confirming the bullish major trend. Support 1352.6, 1329.0, 1325.5, 1317.5, 1297.0, 1274.8, 1270.5, 1232.4, 1210.9, 1191.5, and 1155.6. Resistance: 1432.5.
Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) rose above 12-month highs on 12/6/10 and remains bullish. Absolute price of GDX rose above 4-year highs on 12/6/10.
Silver nearest futures contract price fell below the lows of the previous 5 trading days on 12/8/10, confirming a minor price pullback for the short term. Longer term, Silver rose above previous 30-year highs on 12/6/10, confirming the preexisting bullish major trend.
Silver/Gold Ratio rose above 3-year highs on 12/6/10, again confirming a bullish trend. Silver has outperformed Gold substantially since 8/20/10.
Copper nearest futures contract price rose above the previous 2-year highs on 12/7/10, again confirming the bullish major trend. Strength in Copper suggests confidence about prospects for the world economy, while weakness in Copper suggests doubts. Support 3.6065, 3.3930, 3.1775, 2.9285, 2.8555, 2.8445, and 2.72. Resistance 4.123 and 4.27.
U.S. Treasury Bond nearest futures contract price fell below the lows of the previous 4 months on 12/8/10, confirming the preexisting bearish trend for the intermediate-term trend. Support 119.26, 118.24, 118.12, 115.15, 114.06. 113.04, and 112.15. Resistance 129.14, 129.27, 132.26, 133.00, 135.12, 135.19, 136.31, 137.31, and 142.31.
Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) rose above 7-month highs on 12/8/10 and remains bullish. Absolute price has been firming moderately since 11/23/10.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) has firmed up moderately since making a low on 8/24/10, which implies that fixed-income investors have been choosing somewhat greater inflation protection over the past 3 months.
The U.S. dollar nearest futures contract price recovered a normal fraction of last week’s loss this week, but that might not be significant. USD fell below the lows of the previous 6 days and broke down below a 4-week uptrend line on 12/3/10, both confirming a short-term downtrend. USD may have found resistance near its 200-day SMA, which stands just below chart resistance at 82.02. Longer term, USD fell below 11-month lows on 11/3/10, thereby confirming a bearish long-term price trend. Support 78.01, 75.23, 74.27, and 70.80. Resistance 81.525, 82.02, 83.64, 84.73, 85.36, 86.71, 88.80, 89.22, 89.71, and 92.53.
Advisory Service Sentiment: There were 56.2% Bulls versus 21.3% Bears as of 12/8/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio stands at 2.64, which is between one and two standard deviations above the long-term mean. This is not overly excessive bullish sentiment in the second year of a bull market. The 20-year range is 0.41 to 3.74, the median is 1.54, and the mean is 1.61.
VIX Fear Index fell below 7-month lows to 17.13 on 12/7/10, reflecting diminishing fear among options players. The trend is down and VIX could drop further: it was as low as 15.23 on 4/12/10. VIX is a market estimate of expected constant 30-day volatility, calculated by weighting S&P 500 Index CBOE option bid/ask quotes spanning a wide range of strike prices for the two nearest expiration dates.
The Dow Theory reconfirmed a Primary Tide Bull Market as of 11/3/10, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 25 months. The Dow Theory originally signaled the current Primary Tide Bull Market on 7/23/09, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 6 months. Many other analysts were fooled into calling “Bear Market” by the big downside Secondary Reaction in May and June 2010, but my interpretation has been steadily Bullish on the Primary Trend.
S&P 500 Composite (SPX, 1,228.28) overcame morning weakness on Wednesday to close higher: up 4.53 points or 0.37% in less active trading. Quickly springing back from price dips is what I call “bullish resilience”, and it implies that there are willing buyers waiting to take advantage of price discounts. Over the past month, SPX tested and held above 1173.00, the low of 11/16/10, and the 50-day SMA now at 1187.87 and rising. And SPX held well above the 200-day SMA, now at 1137.25 and rising. Longer term, SPX rose above 2-year highs on 11/5/10, again reconfirming a bullish major trend.
S&P 500 Cash Index 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
1440.24, high of 5/19/2008
1406.32, high of 5/29/2008
1381.50, Fibonacci 78.6% of 2007-2009 range
1366.59, high of 6/17/2008
1335.63, high of 6/25/2008
1313.15, high of 8/11/2008
1274.42, high of 9/8/2008
1255.09, high of 9/12/2008
1238.81, Fibonacci 78.6% of 1,576.09 high
1235.05, high of 12/7/10
1228.74, Fibonacci 61.8% of 2007-2009 range
S&P 500 Cash Index Potential Support
1173.00, low of 11/16/10
1171.70, low of 10/27/10
1166.74, low of 10/20/10
1159.71, low of 10/19/10
1,151.41, low of 10/7/10
1,131.87, low of 10/4/10
1122.79, low of 9/23/2010
1114.63, low of 9/15/2010
1110.88, low of 9/10/2010
1091.15, low of 9/7/2010
1039.70, low of 8/27/10
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
1008.55, Fibonacci 38.2% of 2009-2010 range
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
943.29, Gann 50.0% of 2009-2010 range
878.04, Fibonacci 61.8% of 2009-2010 range
874.17, Gann 62.5% of 2009-2010 range
869.32, low of 7/8/2009
805.17, Gann 75.0% of 2009-2010 range
785.13, Fibonacci 78.6% of 2009-2010 range
666.79, intraday low of 3/6/2009
One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.46% Spain Index, EWP
2.28% Financial Services DJ, IYG
1.61% Financial SPDR, XLF
1.55% Italy Index, EWI
1.51% Financial DJ US, IYF
1.40% Financials VIPERs, VFH
1.08% France Index, EWQ
1.04% Capital Markets KWB ST, KCE
0.99% Dividend High Yield Equity PS, PEY
0.95% Semiconductor SPDR, XSD
0.93% Switzerland Index, EWL
0.86% Agriculture DB PS, DBA
0.86% Semiconductor iS IGW, SOXX
0.85% Technology SPDR, XLK
0.82% Technology DJ US, IYW
0.80% Info Tech VIPERs, VGT
0.78% WilderHill Clean Energy PS, PBW
0.76% Commodity Tracking, DBC
0.76% Austria Index, EWO
0.74% Networking, IGN
0.68% EMU Europe Index, EZU
0.68% Value EAFE MSCI, EFV
0.68% European VIPERs, VGK
0.64% Netherlands Index, EWN
0.59% Europe 350 S&P Index, IEV
0.59% Value S&P 500 B, IVE
0.59% Singapore Index, EWS
0.50% Value VIPERs, VTV
0.50% Malaysia Index, EWM
0.49% LargeCap Blend S&P 100, OEF
0.49% Global 100, IOO
0.47% United Kingdom Index, EWU
0.42% Oil, Crude, U.S. Oil Fund, USO
0.41% Value 1000 Russell, IWD
0.40% Sweden Index, EWD
0.38% Consumer Staples SPDR, XLP
0.37% Growth LargeCap NASDAQ 100, QQQQ
0.37% S&P 500 SPDRs LargeCap Blend, SPY
0.37% S&P 500 iS LargeCap Blend, IVV
0.34% Indonesia MV, IDX
0.33% Value LargeCap Dynamic PS, PWV
0.32% LargeCap VIPERs, VV
0.32% Small Cap EAFE MSCI iS, SCZ
0.30% Growth 1000 Russell, IWF
0.30% EAFE Index, EFA
0.28% Japan Index, EWJ
0.28% Blend Total Market VIPERs, VTI
0.28% LargeCap 1000 R, IWB
0.27% LargeCap Blend Russell 3000, IWV
0.27% South Africa Index, EZA
0.25% LargeCap Blend S&P=Weight R, RSP
0.25% Growth S&P 500/BARRA, IVW
0.23% Microcap Russell, IWC
0.21% Turkey MSCI iS, TUR
0.20% Bond, High-Yield Junk, JNK
0.18% Global ex US ACWI iS, ACWX
0.18% Homebuilders SPDR, XHB
0.14% DIAMONDS (DJIA), DIA
0.13% Growth EAFE MSCI, EFG
0.12% Dividend SPDR, SDY
0.12% Growth VIPERs, VUG
0.12% Mexico Index, EWW
0.10% Value SmallCap Russell 2000, IWN
0.10% Health Care SPDR, XLV
0.08% Dividend DJ Select, DVY
0.06% Value SmallCap VIPERS, VBR
0.05% Water Resources, PHO
0.05% Growth SmallCap VIPERs, VBK
0.05% Value MidCap S&P 400 B, IJJ
0.02% Dividend Appreciation Vipers, VIG
0.02% Growth MidCap Russell, IWP
0.01% Value SmallCap S&P 600 B, IJS
0.00% Bond Treasury Short-Term iS, SHV
0.00% Belgium Index, EWK
-0.02% Growth SmallCap R 2000, IWO
-0.03% Energy Global, IXC
-0.03% Small Cap VIPERs, VB
-0.04% Telecom DJ US, IYZ
-0.06% Financial Preferred, PGF
-0.07% SmallCap Russell 2000, IWM
-0.07% Value MidCap Russell, IWS
-0.08% MidCap Russell, IWR
-0.10% Biotech SPDR, XBI
-0.12% Dividend International, PID
-0.12% MidCap S&P 400 SPDRs, MDY
-0.15% Bond, 1-3 Year Treasury, SHY
-0.16% SmallCap S&P 600, IJR
-0.18% Preferred Stock iS, PFF
-0.19% Growth MidCap 400 B, IJK
-0.20% MidCap S&P 400 iS, IJH
-0.21% Germany Index, EWG
-0.21% Growth BARRA Small Cap 600, IJT
-0.23% Pacific VIPERs, VPL
-0.27% Consumer Discretionary SPDR, XLY
-0.32% Bond, High-Yield Corporate, HYG
-0.33% Utilities VIPERs, VPU
-0.35% Industrial SPDR, XLI
-0.36% Utilities SPDR, XLU
-0.37% Energy DJ, IYE
-0.38% Chile MSCI iS, ECH
-0.40% Taiwan Index, EWT
-0.46% Transportation Av DJ, IYT
-0.47% South Korea Index, EWY
-0.47% Energy SPDR, XLE
-0.47% Energy VIPERs, VDE
-0.48% Bond, Aggregate, AGG
-0.50% Bond Ex-US Treas, BWX
-0.56% Pacific ex-Japan, EPP
-0.57% Russia MV, RSX
-0.58% Value SmallCap S&P 600, RZV
-0.61% Emerging VIPERs, VWO
-0.64% Emerging Markets, EEM
-0.64% Australia Index, EWA
-0.64% Bond, Corp, LQD
-0.66% Canada Index, EWC
-0.75% Bond Muni ATM-Free S&P iS, MUB
-0.78% Hong Kong Index, EWH
-0.84% Latin Am 40, ILF
-0.85% Bond, 10 Year Treasury, IEF
-0.96% Natural Resource iS GS, IGE
-0.97% Bond, 20+ Years Treasury, TLT
-0.98% Bond, TIPS, TIP
-1.01% India PS, PIN
-1.02% Bond EmrgMkt JPM iS, EMB
-1.03% Emerging 50 BLDRS, ADRE
-1.04% India Earnings WTree, EPI
-1.05% Materials SPDR, XLB
-1.06% Basic Materials DJ US, IYM
-1.25% Gold Shares S.T., GLD
-1.30% Brazil Index, EWZ
-1.35% Silver Trust iS, SLV
-1.40% China LargeCap Growth G D H USX PS, PGJ
-1.48% REIT VIPERs, VNQ
-1.49% Real Estate US DJ, IYR
-1.52% REIT Wilshire, RWR
-1.57% China 25 iS, FXI
-1.70% Realty Cohen & Steers, ICF
-1.81% Thailand MSCI iS, THD
-2.25% Metals & Mining SPDR, XME
