AP: Industrial Remains strong, While Financial Remains Weak
Industrial stock sector Relative Strength Ratio rose further above rising 50-day and 200-day SMAs on 9/29/10 and remains bullish. Absolute price remains bullish, with the 50-day SMA above the 200-day SMA.
Financial stock sector Relative Strength Ratio fell to a new 17-month low on 9/29/10 and remains bearish.
Emerging Markets Stocks ETF Relative Strength Ratio rose above 7-year highs on 9/29/10, again confirming a secular bullish trend. Absolute price rose above 5-month highs on 9/29/10, also confirming a bullish trend.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio fell below 3-month lows on 9/29/10. The 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 rose above 2-month highs on 9/29/10 but remains technically neutral, with the rising 50-day SMA moderately below the rising 200-day SMA.
The S&P MidCap 400/Large Cap Relative Strength Ratio rose above 15-year highs on 9/29/10 and remains bullish. Absolute price rose above 4-month highs on 9/29/10 and remains bullish, with the rising 50-day SMA above the rising 200-day SMA.
Crude Oil nearest futures contract rose above 2-week highs on 9/29/10, but probably remains in its trading range. Oil has been consolidating more or less sideways/neutral in a choppy trading range since topping at 87.15 on 5/3/10.
Gold nearest futures contract rose to another new all-time high of 1312.5 on 9/29/10, again confirming its preexisting secular bullish trend.
Silver/Gold Ratio rose above 11-month highs on 9/29/10, again confirming a bullish trend. Silver has outperformed Gold since 8/20/10.
Copper nearest futures contract price rose further above 5-month highs on 9/29/10, again confirming its preexisting intermediate-term uptrend. Strength in Copper suggests confidence about prospects for the world economy.
The U.S. dollar nearest futures contract price fell below 7-month lows on 9/29/10. Both the short-term trend and the intermediate-term trend are clearly bearish.
S&P 500 Composite fell 2.97 points or 0.26% on Wednesday 9/29/10. The September advance appears to be losing upside price momentum. Nine days ago, on 9/20/10, SPX closed at 1,142.71, and now it is only 0.18% higher. Pure price momentum indicators have turned downward and continue to show bearish divergence for the short term: for example, RSI 14 peaked out on 9/20/10 and did not make a new 4-month high when the SPX made a new 4-month high on 9/24/10. Longer term, absolute price of SPX remains neutral, above the 50-day and 200-day SMAs, but with the 50-day SMA below the 200-day SMA. With probes into new 4-month high territory, substantial upside price follow-through with volume confirmation in days ahead will be needed to validate a trend change to the upside. Without such confirmation, however, the stock indexes could slide back into their summertime trading ranges.
