Relatively low volume fails to confirm a new Bull Market. The weight of the evidence appears mixed. On Thursday, major stock price indexes opened higher, continued to rise most of the day, and closed very near the highest levels of the day. Total NYSE volume fell 3%, however, suggesting waning demand for stocks.
Investment Advisors are Bullish and are growing more Bullish. VIX indicates that fear has decreased substantially. Stock Price Oscillators have been losing Bullish Momentum.
Put/Call Ratios indicate neutral sentiment. VIX indicates that fear has been decreasing significantly. Stock Price Oscillators have lost Momentum. Crude Oil June futures jumped to another new all-time high of 126.98. Energy stocks were strong, while Financials were weak--again. Health Care Stock Sector Relative Strength Ratio fell to another new 6-year low, again confirming the existing Primary Bearish trend.
VIX indicates that fear is decreasing. Stock Price Momentum turned upward, but only modestly. Volume fell, and there were more New Lows than New Highs on the NYSE. Crude Oil and Commodity price indexes settled down modestly, providing temporary relief from last week’s worries.
Stock Price Momentum has turned Bearish for the short term. Commodity price indexes rose to new all-time highs. Crude Oil jumped up to another new high, which is not good for the economy.
MACD crossed below its Signal Line, based on the end-of-day SPY. RSI (14) fell to 54, its lowest level in 3 weeks, based on the end-of-day SPY. Just a few days ago, the SPY had been overbought with RSI (14) above 66, at its highest level since the top last October 2007. Commodity price indexes broke out to new all-time highs. Crude Oil jumped up to a another new high, which is not good for the economy. Energy and Materials Stock Sectors were strong.
Price Momentum indicators turned down and show Bearish Divergences. All 9 Stock Sectors fell, with Financials down the most. Stocks had been overbought, with RSI (14) above 64, at its highest level since the top last October 2007, based on the S&P 500. Crude Oil jumped up to another new high, which is not good for the economy.
Another big jump in the price of Crude Oil to a new high of 122.73 gave a fresh boost to Energy Stock Sector, which was the day’s biggest winner, by far. In addition, the Energy Stock Sector has been the upside leader for many months. Technology Stock Sector Relative Strength Ratio rose to a new 3-month high, signaling an improving intermediate-term trend.
Crude Oil jumped up to another new all-time high, confirming uptrends in all time frames. Indicators measuring short-term upside momentum have been slowing for stocks. Stocks were overbought: last week RSI (14) at 64.29 was higher than it had been anytime since the October top, as calculated based on the S&P 500. Stock trading volume has been failing. Volume should rise on rallies, but volume has remained low during the April-May rally.
A rising dollar and falling commodity prices encouraged stock traders on Thursday. But these are short-term trends of questionable duration. Longer-term trends still appear Bearish for the dollar and Bullish for commodities. Friday morning’s news could provide an excuse for more volatility.
A rising dollar and falling commodity prices encouraged stock traders on Thursday. But these are short-term trends of questionable duration. Longer-term trends still appear Bearish for the dollar and Bullish for commodities. Friday morning’s news could provide an excuse for more volatility.
Selling after Fed rate-cut news and a weak close. Momentum indicators show Bearish Divergence. Consumer Discretionary Stock Sector XLY/SPY Relative Strength Ratio fell to a new 14-week low. Consumer Staples Stock Sector XLP/SPY Relative Strength Ratio fell to a new 9-week low. Crude Oil fell to break short-term uptend lines and close below the lowest intraday lows of the previous 7 trading days. Gold broke down to another new 3-month low, again confirming a serious Secondary Reaction.
Another final hour selloff gives momentum indicators a downside tilt. But seasonal tendencies are still Bullish for the current week.CRB commodity price index broke down to a new 2-week low. Gold June futures broke down to a new 3-month low. Gold Miners / Gold Bullion Relative Strength Ratio fell to another new low.
The S&P 500 again rose to a slightly higher 3 month high intraday but was unable to hold the gain. Seasonal tendencies are Bullish for the current week. But upside momentum appears to be grinding to a halt. Gold Miners/Gold Bullion Relative Strength Ratio fell to new lows.
Crude Oil June futures rose to another new high.
The S&P 500 rose to a slightly higher 3 month high, but the rally was unable to regain previous levels of upside momentum and volume contracted. The Hanging Man is a potentially Bearish Reversal Japanese Candlestick. Seasonal tendencies are Bullish for the week ahead. Consumer Staples Stock Sector Relative Strength Ratio fell to a new 8-week low, confirming a corrective intermediate-term trend. Crude Oil June futures rose to a new high.
The stock market tried to rally but was unable to regain much upside momentum. Technology Stock Sector Relative Strength Ratio rose to another new 3-month high, signaling an improving intermediate-term trend. Financial Stocks bounced the most on Thursday but are still the weakest longer term. The Gold Miners ETF (GDX) Relative Strength versus Gold bullion fell to new lows.
The stock market has lost upside momentum. The “reports” of the day were mixed. Financial Stocks are still the weakest. The Gold Miners ETF (GDX) Relative Strength versus Gold bullion fell to new lows. High and rising Crude Oil prices threaten the economy.
The stock market does not like uncertainty. The “reports” of the day were mostly depressing. Health Care Stock Sector Relative Strength Ratio fell to another new 6-year low, again confirming an existing Primary Bearish trend. Energy Stock Sector Relative Strength Ratio and price both rose to new all-time highs, obviously still Bullish. But soaring Crude Oil prices threaten the economy.
Stock Sectors’ Relative Strength Ratios were mixed again on Monday: Energy Relative Strength Ratio rose to another new all-time high, obviously still Bullish. Technology Relative Strength Ratio rose to a new 3-month high, suggesting an improving intermediate-term trend. Health Care Relative Strength Ratio fell to a new 6-year low, confirming an existing Primary Bearish trend.
Stock Sectors’ Relative Strength Ratios were mixed last week: Energy and Materials Relative Strength Ratios rose to new all-time highs, confirming major uptrends. Health Care Relative Strength Ratio fell to a new 6-year low, confirming a major downtrend. Consumer Discretionary Relative Strength Ratio fell to a new 13-week low, suggesting renewed weakness. Consumer Staples and Industrial Relative Strength Ratios fell to new 7-week lows.
The 3-week upward correction/consolidation phase has ended. The SPY ETF broke down from a Bearish Rising Wedge chart pattern. Look for a likely test of the lows or new lows. Energy and Materials Sectors’ Relative Strength Ratios rose to new all-time highs, confirming major uptrends. Industrial Sector Relative Strength Ratio broke sharply lower to a new 6-week low.
Momentum - slow and lethargic. Stock price momentum appears slightly negative since the April Fool’s Day price upsurge, on 4/1/08. Preexisting Major Trends tend to resume after short-term correction/consolidation phases run their course. On Thursday, major stock price indexes opened modestly lower but closed modestly higher. Momentum was slow and lethargic. NYSE volume rose by 4% but is still at a relatively modest level.
Stocks broke 5-day lows. Stock price momentum appears to be turning down again. Consumer Discretionary Stock Sector Relative Strength Ratio fell to a new 11-week low, suggesting renewed weakness. Crude Oil futures broke out to a new all-time high, confirming oil’s Major Uptrend. Energy Stock Sector Relative Strength Ratio rose to new all-time high, confirming a Major Uptrend. U.S. Treasury Bond prices surged sharply higher, breaking the highs of the previous 6 trading days. The U.S. dollar appears to be turning more Bearish again. Gold futures jumped up, breaking a 3-week downtrend line.
Consolidation continues... Stocks in general are little changed since 4/1/08. Stock price momentum appears to be grinding slowly to a halt.
World markets have been consolidating or correcting over the past 3 weeks. Preexisting Major Trends tend to resume after short-term correction/consolidation phases run their course.
Continuing directional uncertainty--momentum decelerating. The S&P 500 tried to rally but appeared to find resistance when it approached 1,388.34, the high of 2/27/2008. Stock price momentum still appears to be grinding slowly to a halt. World markets have been consolidating or correcting over the past 3 weeks. Preexisting Major Trends tend to resume after short-term corrections run their course.
Momentum Lost. Stock price momentum appears to be grinding to a halt. World markets have been consolidating or correcting over the past 2-3 weeks. Pre-existing Major Trends tend to resume after short-term corrections run their course.
On Friday, major stock price indexes opened lower and closed narrowly mixed—all within the context of their 13-day upside correction phase, a Minor Ripple within a Major Bearish Trend, which appears to be losing upside momentum. NYSE volume fell 3 consecutive days, this time by 6%, indicating indecision and hesitation.
Small Change. World markets have been consolidating or correcting over the past 2-3 weeks. The proportion of Bears has been shrinking as the stock market has corrected upward over the most recent 12 trading sessions. Health Care Stock Sector Relative Strength Ratio broke down to another new 8-month low.
On Wednesday, major stock price indexes stalled out within their 11-day upside correction phase. NYSE volume fell by 11%, indicating indecision and hesitation.
Big Relief Rally for Stocks. Commodity prices fell again, easing fears of inflation.
Dow-Jones Transportation Average Relative Strength Ratio broke out to a new 5-month high.
Health Care Stock Sector Relative Strength Ratio broke down to a new 5-month low.
On Tuesday, major stock price indexes opened substantially higher, continued to work irregularly higher most of the day, and closed near the highs of the day. NYSE volume rose by 15%, and the volume of advancing stocks was greater than the volume of declining stocks, indicating net buying pressure on balance.
On Monday, major stock price indexes opened slightly lower but soon turned upward. They moved irregularly higher until about 1:30 p.m., the high of the day. The indexes lost most of their gains in the final 15 minutes. NYSE volume rose by 16%, and the volume of advancing stocks was 165% greater than the volume of declining stocks, indicating net buying pressure on balance.
Stocks broke down below 4-day lows. Familiar fundamental problems continue to weigh on stocks. It is a Major Trend.
Consumer Staples’ Relative Strength Ratio rose to new 5-year high. This “Defensive” Stock Sector is relatively insulated against economic recessions.
Financial and Consumer Discretionary fell the most—again! These sectors are being hit hard by the economic downturn.
U.S. Treasury Bond prices reversed to the upside, hinting at some flight to safety.
Stocks: short-term Bearish trend confirmed. Familiar fundamental problems continue to weigh on stocks. U.S. Treasury Bond prices broke sharply to the downside, breaking 8-day lows. The Defensive Stock Sectors, Utilities, Health Care, and Consumer Staples, were relatively strong. Financial, Industrial, Energy, Consumer Discretionary, and Technology Stock Sectors were relatively weak.
Stocks reversed to the downside. The short-term trend turned Bearish. Net selling pressure on balance evident.
Familiar fundamental problems weigh on stocks.
Commodities, Oil, and Gold accelerated to the upside.
Energy Stock Sector was relatively strong.
Financial, Technology, and Consumer Discretionary Stock Sectors were relatively weak.
Standoff...Lost momentum...Vulnerable to a reversal? The “reports” of the day seemed mostly Bearish for stocks. Nevertheless, stocks held up well, showing resilience. Materials and Energy Stock Sectors were relatively strong. Consumer Discretionary and Financial Stock Sectors were relatively weak. Another drop in volume suggested reluctance to chase prices higher.
The "reports" of the day were mostly Bullish for stocks. Stocks recovered most of their losses from the February highs. But a drop in volume suggested some reluctance to chase prices higher. Stock sentiment rapidly reverted to the mean. Commodities, Oil, and Gold appeared to be losing downside momentum. Sharp drop in bond prices broke bonds’ upside momentum.
Hopes for some kind of a rescue. The weakest stocks enjoyed the biggest bounces on the Fed liquidity news. Health Care Stock Sector Relative Strength Ratio fell to a new 4-month low.
Commodities, Oil, Gold, Energy stocks and Materials stocks broke sharply to the downside last week, following warnings by Wall Street strategists. They quickly reached short-term oversold. Fears of financial crisis are just under the surface, cutting into probabilities of more than brief oversold bounces. Sentiment has been Bearish, but that does not necessarily mean a sustainable uptrend anytime soon.
Cash is king. Commodities, Oil, Gold, Energy stocks and Materials stocks broke sharply to the downside following warnings by Wall Street strategists. Fears of financial crisis are just under the surface, cutting into probabilities of more than brief oversold bounces. Sentiment has been Bearish, but that does not necessarily mean a bounce anytime soon. Consumer Staples Stock Sector Relative Strength Ratio rose to a new 5-year high, again confirming a Bullish trend relative to the all-sectors index.
Every trend has counter-trend corrections. Hopes of easing monetary policy pushed aside fears of financial crisis. Oversold bounces have been common but temporary.
Sentiment has been Bearish, so there might be enough fuel for somewhat higher price levels on this bounce--barring fresh bad news. The U.S. dollar also bounced from new all-time lows. Gold corrected downward from new all-time highs.
Some resilience noted, but the Main Trend is still down. Financial Stock Sector absolute price and the XLF/SPY Relative Strength Ratio both fell to their lowest levels in nearly 5-years, again confirming a major Bearish trend. Major trends often have a way of running further and longer than most people can imagine. The U.S. dollar has been falling to new all-time lows. Gold has been rising to new all-time highs. U.S. Treasury Bond prices benefit from financial crisis.
Buckle Up for a Selling Climax. News of the collapse of Bear Stearns is no surprise, since the stock has been on my list, Bearish Stocks: Falling Price and Rising Volume (below). Someone obviously knew of big problems in advance. Major trends, such as the Bearish trend of the Financial Stock Sector, often have a way of running further and longer than most people can imagine. The U.S. dollar has been falling to new all-time lows. Gold has been rising to new all-time highs. U.S. Treasury Bond prices benefit from financial crisis.
What happened to the short-term stock bounce? Overwhelmed by major trends. The “good news” stock rally faded away after a day and a half. U.S. Treasury Bond prices jumped up steeply to a new 1-month price high, suggesting flight to safety. Crude Oil jumped up above 110, another new high, confirming that all trends are Bullish for oil. But high and rising oil prices are no good for the economy and the stock market. The U.S. dollar plunged steeply to a new all-time low.
What happened to the short-term stock bounce? Overwhelmed by major trends. The “good news” stock rally faded away after a day and a half. U.S. Treasury Bond prices jumped up steeply to a new 1-month price high, suggesting flight to safety. Crude Oil jumped up above 110, another new high, confirming that all trends are Bullish for oil. But high and rising oil prices are no good for the economy and the stock market. The U.S. dollar plunged steeply to a new all-time low.
The Fed to the rescue...deja vu. Be nimble. Be quick. Down 8 of the 9 trading days, many will say the market was oversold--and it was. An oversold market can have extreme reactions to good news. There probably are many trend-following shorts ripe for squeezing. Health Care Stock Sector Relative Strength Ratio fell to a new 4-month low. Crude Oil jumped up above 109, a new high, confirming that all trends are Bullish for oil. But high and rising oil prices are no good for the economy and the stock market.
Bearish Sentiment Increasing. The Bear count typically goes up as stocks go down, and this is no exception. Down 8 of the past 9 trading days, some might say the market is getting oversold--and it is. But sometimes oversold becomes more oversold. Sentiment has not yet reached levels associated with extreme pessimism, so there could be room for further price declines. Financial Stock Sector Relative Strength Ratio fell to a new 7-year low, and price fell to a new 5-year low. Financial crisis has always been bad for the stock market.
Bear Trend Confirmed...but... Down 7 of the past 8 trading days, some might say the market is getting oversold. But then again, sentiment never really reached levels associated with extreme pessimism, so the market could get more oversold. Dow Industrials, S&P 500, and NASDAQ broke down to new 17-month lows, based on closes only, thereby confirming Bearish price downtrends in all significant time frames. Consumer Staples Stock Sector Relative Strength Ratio rose to a new high. This is a “defensive” sector, relatively immune to recessions.
Critical Test At Hand Indexes test January lows: Dow Industrials and Transports hold, while S&P and NASDAQ break, based on closes only.
Energy, Materials, Consumer Staples, and Industrial Stock Sectors’ Relative Strength Ratios rose to new highs.
Financial Stock Sector Relative Strength Ratio fell to another new 7-year low, and price fell to a new 5-year low.
Crude Oil rose to another new high.
No easy bailouts, but stocks seem resilient, for the day. Financial Stock Sector Relative Strength Ratio fell to another new 7-year low.
CRB Commodity price index, Crude Oil, and Gold all reversed sharply to the upside, making new highs and confirming major uptrends.
Materials and Energy Stock Sectors followed the commodities that these companies produce to new highs in Relative Strength.
"Reports" create market chaos. Who benefits? S&P 500 broke down below its 2/7/08 low of 1,316.75, but bounced back to close above it. Financial Stock Sector Relative Strength Ratio fell to another new 7-week low. CRB Commodity price index, Crude Oil, and Gold all reversed sharply to the downside, breaking previous days’ lows, and possibly signaling a short-term pullback.
The markets remain very selective. Financial Stock Sector Relative Strength Ratio fell to a new 7-week low, confirming an intermediate-term downtrend. NASDAQ Composite Relative Strength Ratio fell to a new 9-month low, again confirming a significant downtrend. Energy, Materials, and Industrial Stock Sectors Relative Strength Ratios rose to new all-time highs, confirming major uptrends.
"Extreme selling pressure" on stocks. Energy, Financial, and Materials Stock Sectors prices each fell more than 3% on Friday. U.S. Treasury Bond prices jumped sharply higher in a flight to safety. On Friday, the S&P 500 fell steeply, losing 37.05 points or 2.71% to close at 1,330.63. It broke down below the lowest lows of the previous 12 trading days, thereby confirming a short-term downtrend.
Inflation and Recession are reflected in the stock action. Energy and Materials Stock Sectors’ Relative Strength both rose to new highs, thereby confirming existing uptrends. Financial, Consumer Discretionary, Technology, and Health Care remain relatively weak. Oil, Gold, and the CRB commodity price index made a new all-time price highs.
Disappointing action, reative to the news. Market action seemed disappointing relative to the news of the day. The rally quickly stalled out, and eventually stocks gave up all their gain. The U.S. dollar dropped to another new low.
Inflation helps some stocks. Hurts others. Oil, Gold, Wheat, and the CRB commodity price index jumped up to new price highs, again confirming major uptrends. Producer Price Index showed year-over-year gain of 7.4%, the highest in 27 years. The U.S. dollar dropped sharply to a new low.
Whipsaws: Break Down. Break Up. The CRB commodity price index jumped up to another new all-time price high, again confirming a major uptrend. Materials Sector Stocks are Relatively Strong. On Monday, major stock price indexes rose on news that Standard & Poor's removed MBIA from CreditWatch and affirmed the 'AAA' financial strength rating of Ambac Financial.
New Weekly ETFs Ranks Posted, below. Commodity prices rose to another new all-time high. Technology stocks fell to another new low. On Friday, major stock price indexes opened slightly higher but quickly turned down. Prices continued lower most of the day until the final hour, with stock price indexes below their lowest lows of the previous 7 trading days, thereby confirming a short-term downtrend.
Stock price momentum turned down. Lower volume suggests waning demand for stocks. Gold and the CRB commodity price index jumped up to new all-time price highs, again confirming major uptrends. On Thursday, major stock price indexes gapped higher on the open on news of a drop in weekly jobless claims. But stocks fell after the 10:00 a.m. news of a sharp drop in the Philadelphia Manufacturing Index.
Will falling interest rates alone save the stock market? Crude Oil, Gold, and the CRB commodity price index all jumped up to new all-time price highs, again confirming major uptrends. Energy and Materials Stock Sectors Relative Strength Ratios rose to new all-time highs. Technology Stock Sector Relative Strength Ratio fell to another new 8-month low.
