Bookmark thisThe stock market is down this week. As I expected in my previous week "S&P 500 Technical Analysis" post the indexes were Bearish. The S&P 500 and Dow Jones Industrials have moved close to their June 23 - 24, 2009 lows. The Nasdaq 100 index was less negative and still stays close to its highs.
If the June 23-24 lows (which I would not named as very critical and difficult level) are broken, then the next, much more sensitive support level is on the line of May 13 and May 21, 2009 lows. I call this level sensitive to many investors because if you draw the horizontal line touching those support points you will see that starting from May 4, 2009 the DJI and the S&P 500 indexes were traded above this line. That means that all mid-term and long-term traders who opened long position (bought stocks) in this period of time (from May 4 until now) are going to be in the losing or zero profit position. We may assume that over the last two months (from May 4 until now) there could be quite a big number of long- and mid-term traders who went long. As well, we may assume that the odds are good that some of them set stop-loss levels around May 13 and May 21, 2009 support line. Since the volume is down and we have not seen high volume surges during the index decline, I may assume that majority of them are still have position opened and their stop losses are not hit yet. At the same time a low daily trading volume may witness that investors calmed down after the strong rally in March-April 2009 and some of them could wait for better bargain price to enter the market. As I mentioned in my previous post it would be nice to see some volume surge during the price drop which could mark the end of the correction, however, so far we have not seen it. This volume surge would mean that the price drop to the level that become attractive to many investors to start buying from sellers that are pushing the market down since the middle of June.
As you may see my longer-term technical analysis is still a little bit bearish. Some of my assumption could be strange to someone. However, this is how I look at the stock market. One of the aspects of my longer-term technical analysis is to find out from the supply/demand point of view what long-term and mid-term traders are doing. I am not talking about simple traders like me, but about those who has big bags of money and whose steps are represented on the chart by volume spikes. That is why I consider volume based technical analysis very important – it shows actions of big players.
I am sorry I do not post a chart this week. I will try to id in my next post. From the short-term technical analysis point of view the indexes are still negative at this moment. We still may see slide down. However, I would closely watch charts during the trading day since the short-term sentiment can change sharply.
Sunday, July 5, 2009
S&P 500 and DJI
Sunday, June 28, 2009
S&P 500 Technical Analysis
With exception of Monday, the past week could be considered positive. Yet, by the end of the week the indicators make me somewhat cautious about the further trend. The correction we had from June 12, 2009 until June 23, 2009 could be considered as the strongest down turn since March 9, 2009 (since the market is in the longer-term up-trend). The high levels the indexes hit in the beginning of June became a strong resistance barrier. The Dow Jones Industrials (^DJI) has been fluctuating around the same resistance level for a month (from December 1, 2008 until June 9, 2009). The S&P stuck close to its current resistance in December 2008 as well. Yes, the Nasdaq 100 index is one of the indexes that recovered stronger, but we should remember that the Nasdaq 100 represent non financial companies and was less affected by 2008 stock market crash.
So, we may see that June’s high levels are quite sensitive and even if indexes continue to move higher by recovering from the recent correction I would consider that the odds are pretty good that we may see them stuck at the marked resistance level again. I would say that we may even see second bounce from there (this is just my opinion based on my personal technical analysis).
Despite the recent up-move (from June 23, 2009), at the current moment my longer-term technical analysis is not very optimistic. For a longer term sentiment I usually refer to the daily charts: from 1-year (1 bar = 1 day) to 3-year (1 bar = 3 days). I do not give snapshots of these charts in this post, however, I will try to post them in one of my next posts. All these charts are Bearish at this moment: I see negative money flow, I may consider that the market become somewhat overbought after the strong 3-month recovery rally (March-May 2009), average daily trading volume is down which means that the first wave of Bullish investors who push market up become exhausted, etc. Overall, my longer-term technical analysis is Bearish. However, on the other hand, we should not disregard the fact that during the recent correction down the main indexes (S&P 500, DJI, Nasdaq 100, Russell 2000…) were released from their overbought conditions at least partially which could keep the market and indexes at the current high levels.
In a shorter term – see S&P 500 index hourly chart below – we may see some sentiment changes towards bearish mood: SBV moves down, high green MVO (volume surges during the price up-move), declining Advance/Decline Oscillator, declining MACD and declining RSI. Stochastics is still could be considered positive and McClellan Oscillator is still above zero line which is a positive sign as well. In summary, I would say that my shorter-term technical analysis results point to the possibility of slide. Again (as I mentioned before) this is intraday chart and should be monitored during the trading hours for possible changes in the sentiment and trend.
Thursday, June 25, 2009
Stock Market Crash - 1974
As a continuation of the series of charts dedicated to the stock market crashes I would like to present the Dow Jones Industrials chart in period of 1973 and 1974 years. In almost 2 years the Dow Jones Industrial Average (DJIA) lost over 45% of its value - not the worst but still the pretty bad and prolonged recession. The crash came after the collapse of the Bretton Woods system, with the associated 'Nixon Shock' and United States dollar devaluation under the Smithsonian Agreement. The recession was compounded by the oil crisis in October 1973.
Chart 1: Dow Jones Industrial chart, 1973 - 1974, 1 bar = 3 days
Sunday, June 21, 2009
DJI Chart
I have expressed in my last week three factors worth of attention. One of them was the indexes (S&P 500 and DJI) moving sideways on the January 6, 2009 high levels. The recent bounce down from these levels confirms that these resistance lines indeed are sensitive for many traders.
While shorter-term charts and technical analysis are positive and show some odds of possible move up to the recent high levels (June 11, 2009 highs), the longer-term charts and analysis are not as optimistic. From the chart below you may see the significant drop in the daily volume which means that the main players (long-term institutional investors – "Big Money") finished investing (relocating funds) into the stock market. Starting from February 19, 2009 these institutional traders were attracted by the bargain cheap price of the under evaluated stocks and were buying in huge volumes. Their buying power was the main engine that pushed the stock market up. Now, when their buying power became somehow exhausted (trading volume become lower) we may expect the stock market trend be more dependable on the smaller players’ sentiment. I would put a question in this way: "Are the long-term non-institutional traders (who have a lot of money but not big bags) encourage the March-June rally up or they consider that they may enter the market later at lower price or when they are more confident?"
The positive thing is (I repeat what I mention in my several past posts) that the volatility is down. That means that even if we see strong correction down it’s not going to be unexpected sudden 10% drop down and most likely majority of the technical studies including trend-following indicators will be able to signal this correction. Actually, I consider that the trend following indicators could be the best in this situation. We already may see some negative money flow; we may see some overbought conditions; we understand that even for the further healthy recovery a correction down would be ok – all we need a confirmation from the trend-following technical analysis.
Friday, June 19, 2009
Stock Market Crash - 1987
Another nice picture of the stock market crash in 1987. On "Black Monday" - October 19, 1987 - the Dow Jones Industrials dropped 22.68% in a single session. This was the biggest percentage drop in the DOW history. It is interesting to see the extremely high volume surge during this crash which marked the bottom of the panic selling. Since volume is always 2-side transaction this huge volume indicates that somebody was buying in big volume from desperate traders until the end of October 1987 - in 11 month (in September 1988) the DOW index was back above $2,700 level.
This volume chart is a perfect example of how institutional money collected underpriced shares from traders who was in panic
Tuesday, June 16, 2009
Stock Market Crash - 1929
I just thought it would be interesting to see the nice charts of 1929 stock market crash. I had opportunity to browse these charts (courtesy ofwww.marketvolume.com) and decided to share it.
As you may see from the charts below, 200 pointsof crash down in 2 months in 1929, then 100 points up for the next 5 months (until May 1930) and then 2 years and 2 months (until July 1932) down to the $40 level. Keep in mind that 200 points at that time is more than 50% drop from the top in September 1929.
Chart 1: Dow Jones Industrial chart, 1929 - 1934, 1 bar = 10 days
Chart 2: Dow Jones Industrial chart, 1929 - 1934, 1 bar = 10 days
Sunday, June 14, 2009
Simple Technical Analysis
My longer-term technical analysis show the bullish market. Over the short-term (see chart below) some Bullish dominance as well.
Three factors that I consider worth attention: a) volatility is down to the Nay 2008 level; b) volume on the Dow Jones Industrials and the S&P 500 indexes is down; c) S&P 500 and DJI are at the January 6, 2009 high levels which are considered by many traders as resistance lines from which we could have bounce down. I'll try to provide more details on these three factors in my next post.
Wednesday, June 10, 2009
Leading and Lagging Techical Indicators
The technical indicators (studies) could be divided into several categories by the type of data they are based on: price based indicators, volume based indicators, advance/decline (or Breadth) indicators and combined indicators that are based on price and volume or price and advance/decline data. The other way to classify technical indicators is to classify them by the way they are used in technical analysis.
There are three basic ways to use indicators in the analysis and a category that would cover each particular indicator depends on what this indicator indicates or what type of signals it generates:
1. Leading Technical Indicators – indicators that signal possible trend reversal in the future;
2. Lagging Technical Indicators – indicators that follow changes in the trend which also called trend-following indicators;
3. Informational Technical Indicators – indicators that do not predict nor follow a trend, but describe market, index or traded security. The examples of such indicators could be ATR, VIX and other studies are used to measure volatility, ADX that is used to measure strength of a trend and define sideway markets, etc.
In many sources you may find that the main role of technical analysis is to generate buy and sell signals. Based on the classification above I would say that this definition of technical analysis purpose is somewhat misleading since the informational studies which are used in analysis do not generate "Buy/Sell" signals. I would rather say that the purpose of the technical analysis is to analyze the current market or stock condition in relation to the past. After that, the result of technical analysis could be used in a trading system to generate "Buy/Sell" signals and most likely a good trading system would use technical studies from each category defined above.
A good trading system would use the leading indicators to signal a possible change in a trend. However, there is no 100% guarantee that after a leading indicator generates a signal you will see a reversal. As an example, a volume surge during the price decline signals possible change in supply/demand balance and following reversal move up. However, it does not tell you when it could happen: in 5 min, in an hour, in a day, etc. At the same time there could be situation when signals generated by leading indicators could be ignored – in our example of volume – the small volume surges could be ignored if stock or market is in strong up or down trend.
Now, we came to the lagging (trend following) indicators. They could be used alone, however, by itself lagging indicators could generate fake signals or generate signal when it is too late to open or close a trade. The best way to use them is in combination with leading indicators: a leading indicator generates signal about possible trend reversal and then lagging indicator confirms this reversal. In this trading strategy a trade is opened only after a lagging indicator confirms previously generated signal by a leading indicator. Al other situations when only one of the indicators signals a reversal are simply ignored. A trading system based on this strategy allows applying more sensitive setting to lagging indicators (by alone it would be considered very risky) and open a trade closer to reversals.
The last group of technical studies delivers important information used in technical analysis to adjust leading and lagging indicators setting as well as modify trading strategy in accordance to the current market condition. For instance ATR (Average True Range) is used in technical analysis to measure market (when applied to indexes) and security (when applied to a single security) volatility. It is usual that in highly volatile market we may witness rapid and strong changes in a trend. In this case a trader could be willing to adjust his/her indicators to be more sensitive (lower bar period setting, go to lower timeframe…). On the other hand in quiet market it could be good idea to set bigger lag (increase bar period setting, move to higher timeframe) and make indicators to generate signals with some delay. The ADX (Average Directional Index) could be another example of using informational indicators. ADX by itself does not generate signals at all -it tells only whether market/stock is in strong trend, weak trend or flat market. Based on the results of ADX analysis a trader may adjust a trading strategy and for instance trade only “Buy” short-term signals in longer-term strong up trend and trade only "Sell" signals in longer-term strong down-trend, and trade both signals during weak or sideway trend.
As you may see there are different technical indicators and as a rule professional analysts always use combination of them. Analysis of one indicator, sooner or later, may lead to the disappointment that this indicator is bad. My opinion is that there are no bad technical indicators - there could be only an incorrect way they are used. If you are looking for technical indicator that would generate stable positive return all the time I would recommend you do not waste your time but spend it rather on learning several technical studies that would help you to see the complete picture and not just some part of it.
Saturday, June 6, 2009
S&P 500 Shorter-Term Chart
Taking a look at shorter-timeframe chart (hourly chart: 1 bar = 1 hour) we may see mixed sentiment, yet, with bullish dominance (see S&P 500 chart below). When I mention hourly charts I assume 3-day and smaller trends. Majority of technical indicators on this chart have bar period setting less than 20 and multiplying it by 1 hour (bar time frame) you will have maximum 20 hour coverage which is about 3 trading sessions (one trading session is six and half hours long). However, the market is still volatile (see ATR, VIX and other volatility indicators) and I would not bet on this chart for longer than a day ahead. Furthermore, this chart should be monitored during the trading hours.
Overall, as I have already mentioned above, my technical analysis applied to hourly charts show dominance of bullish sentiment (see direction of arrows for each technical indicator). There are still two negative signs: declining SBV and declining Advance/Decline oscillator, however, SBV is almost flat and previous Adv/Decl red area is much bigger than the recent green one.
Monday, June 1, 2009
General Motors and Citi Group
Sunday, May 31, 2009
Stock Market Crash Stages
As was mentioned before (see my "Side Way Market in May" post) the indexes continue to move in the corridor defined by May 8, 2099 high and May 13, 2008 low. Now, the indexes are close to the upper edge of this corridor: the Nasdaq 100 index has hit this level yesterday, the S&P 500 is still about 10 points below this level and the Dow Jones Industrial is approximately 70 points below.
Only one nice trading session is needed for S&P 500 and DJI to hit this level and if it is broken it could mean that we may see further move up. However, I consider that the odds of the bounce down again are still good. The stock market (when I mention stock market I assume the main U.S. indexes which associated as market barometers: DJI, S&P 500 and Nasdaq 100) has been in a sideway move only for a month. To see the picture better, I may recommend checking higher timeframe index charts - from 1-year to 7-year views.
From the higher timeframe charts we may see that the stock market has been in recovery for 2 months (from the beginning of March to beginning of May 2009) and the whole May the market was basically flat. By comparing recovery after 2000-2002 stock market crash to the current recovery I may say that:
- The recent stock market crash was stronger;
- We had 3 bounces from the bottom in the previous recovery: August 2002, October 2002 and February 2003 (war in Iraq was lunched). We had 3 bounces from the bottom in the recent crash as well: October 2008, November 2008 and February 2009;
- The first recovery wave in 2003 was 3-month long and then the market was in 2-month flat stage. The current move up was 2-month long and we see market in sideway move for a month only;
- In 2003, after 2-month of flat stage, the stock market went up again.
To better understand the stock market crash, recovery process and what could be expected next, I would divide the stock market crash into the following stages:
- Recession: The market is heavily overbought and it starts to move down. As a rule this move down is prolonged in time and this move down is not very scary. See period from July 2007 until May 2008 and period from August 2000 until March 2002. In this period a many investors start to sell, yet there are still investors who buy.
- Crash: As a rule during the recession the bad stuff about companies and economy is revealed and depending on how bad "the truth" is we have strong or extremely strong panic selling. The recent "discovery of truth" about financial companies' manipulation was much scarier than the "discovery of truth" about internet bubbled companies in 2000-2002. In this period we see panic selling - everybody selling and only small part of investors buy. In this period bad, weak and "fraud" companies go bankruptcy and good companies become under evaluated. This period is short and drop down is strong.
- After Crash Clean-up: The market still can go down and we may see bounces from the bottom. In this period investor are still selling, yet, the panic is not as strong as it was during the crash. Many investors (professional traders who see under evaluated companies) start buying attracted by low bargain price, yet, the number of Bullish traders is not big enough to reverse the trend. During this period we still may see "bad" companies go bankruptcy, yet, it's not very scary since, usually, it is an expected bankruptcy and many traders are already prepared to that. For this stage I would refer to periods from July 2002 until February 2003 and from and from October 2008 until March 2009.
- First wave of recovery: There is no panic selling any more. There are still sellers, yet, the number of buyers attracted by low price of good stocks become quite big to move stock market up. Even if we see bankruptcy during this period it will not affect strongly up-trend because all the "bad" companies were already removed from the major indexes. The companies are still under evaluated, yet not as strong and we start to see positive signs in the economy. At the end of this period we may see sideway move or small correction. It could be strong up move in short period of time: see periods from March 2003 until June 2003 and from March 2009 until May 2009.
As I understand (I could be wrong), we are at the end of the "First wave of recovery" and we still may see side-way market or even some drop down (automotive clouds are still on the "stock market sky").
In my next post I'll go back to the shorter term index charts (S&P 500, DJI and Nasdaq 100 charts) to show what my technical analysis tells about shorter-term trends and current market sentiment.
Wednesday, May 27, 2009
Sideway Market in May
Sunday, May 24, 2009
S&P 500 Chart
Now, the same traditional question that bother all trader: "Up or Down?" The answer on this question could be different depending on the personal trading style. If you are long-term trader and expect to stay in position for years then you could be looking for the answer in long-term charts, in the analysis of the economy and fundamentals. On the other hand if you are short-term ETFs (Exchange Traded Funds) trader could be looking for the answer in the technical analysis of the short-term index charts.
I am not here to discuss long-term analysis of the U.S. stock market, and I am not here to say where the market is going to be on the next trading day after the market open. I usually do one post a week where I am trying to cover technical analysis of the 60-day (hourly, 1 bar = 1 hour) index charts. Depending on the market volatility these charts are covering 2-5 days trends, and even I do not trade these charts (I’m short-term trader) I use them to see the general sentiment of the indexes and accordingly adjust my trading strategy.
Coming back to the traditional chart setting you may see in my blog, I may say that the majority of the technical indicators on the S&P 500 index are Bearish. The similar tendency could be noted on the Dow Jones Industrial index. The Nasdaq 100 is not as bearish as S&P 500 and DJI, yet, still negative. I would not make a statement that the indexes are strongly bearish. There are some bullish indicators could be seen as well.
From the chart above you may see that there is some dominance of the bearish sentiment. It is not a strong dominance: the currently bearish indicators have been bullish on Friday May 23 almost whole trading session and has become bearish only by the end of the day (you may see RSI and Stochastics started to move down again). One of the main reasons why I would shift the odds in a favor of bearish move is because of the volume surge at high price on May 20, 2009 in S&P 500 and DJI sectors. We do not see such high volume on the Nasdaq 100 index, however, we have not seen a high volume on the Nasdaq 100 during the price decline on May 13, 2009 neither.
Even my technical analysis is somewhat bearish at this moment, I would still keep my eye closely on charts since the indexes are close to the May 13, 15 and 21 lows (see lower blue line on the S&P 500 chart above which mark shorter-term sensitive level) to see if this line is going to be broken.
Again, my technical analysis is subjective and reflects my personal view on the market. I may only recommend doing your own personal analysis which would fit your personal trading style.
Monday, May 18, 2009
S&P 500 Analysis Follow Up
We had a nice recovery today, yet, I am still staying on my position, expressed in my previous post, that I would not expect to have May 8 highs easily broken. Yes, my technical analysis (my technical indicators) is bullish at the current moment, yet, I would still consider that this is important to keep an eye more closely on the charts over the last couple of trading sessions.
Thursday, May 14, 2009
S&P 500
Today we had a positive session - some recovery after the down turn. There is always a traditional question: What is next? Will market go up? or will it drop further down? From the S&P 500 chart below you may see that majority of the technical studies I use in my technical analysis are bullish and point to the good odds of the further recovery. The last Bearish volume surge in the S&P 500 and Nasdaq 100 sectors confirms it. However there is a few factors that make me hesitate about expectation of a strong recovery. There are a some of them:
1. I have not seen Bearish volume surge (volume surge during the price move down) in the Dow Jones Industrial index;
2. Since March 9, 2009 the market has been moved strongly up and we have not seen any strong correction;
3. The first correction during the 2 month recovery was at the end of March 2009. This correction was not a strong one nor a prolonged one. As a rule second correction should be stronger because it is further from the March 9 bottom and market become more overbought as it was in March;
Because of that, at this point of time, even if I see further recovery I would not expect the market (indexes) to go higher than May 8, 2009 highs. At the same time I would more closely watch the intraday charts since there are good odds we may see market reversed down again. The good news is that is that volatility goes down: VIX (volatility index) moving lower, ATR (Average True Range) is moving down as well (I monitor them on daily chart). That tells that it is very unlikely to have crash down. Stock market becomes more quiet and if we see correctional move down it should not be a dramatic movement.
Wednesday, May 13, 2009
ETFs Trading
ETFs (Exchange Traded Funds) was launched in 1993 with introduction of SPDRs (ticker: SPY) that tracks the S&P 500 index. Still SPDRs remains as one of the most traded stock (not just exchange traded funds) on the U.S. stock market. ETFs should always be look at as funds that could be traded as.
To see advantages of ETFs trading the one should compare them to mutual funds trading first and then to stock trading. By comparing ETFs to the mutual funds we may see that:
- Intraday Trading: Mutual funds are always traded at the market close once a day and no matter when you place order to buy/sell mutual fund your order will be filled at the same time (at market close) and at the same price as orders of all other investors. Exchange traded funds could be traded as stock and you can purchase or sell them during the market trading hours. The ETFs provide investors with intraday trading flexibility of stocks which allow benefiting from the intraday price movements;
- Ability to Sell Short: As a rule when you invest into mutual funds you buy them - you cannot sell them short to open a position. For this purpose you have to look for inverse or Bear funds. That means that you have switch between bull and bear funds or participate in trading only in Bull markets (as a rule only index funds has inverse funds). In case of ETF, as was mentioned above, you trade it as stock, furthermore, you may sell it short and participate in Bear markets as well without looking for additional trading vehicle. Because of that, ETFs provide investors with wider range of speculative trading strategies in comparison to mutual funds;
- Low Cost: Exchange traded funds are considered as cost efficient trading tools. Because of their low cost a lot of professional and retail investors chose them for investments.
By comparing ETFs to stocks we may see other three points:
- Diversification: When you purchase a single share of ETF you invest into all stocks from the basket of the index this ETF tracks. For instance, by buying one share of QQQQ at $40, you invest into all 100 companies listed in the Nasdaq 100 index. Try to imagine how much it would cost you to buy one share of each company from the Nasdaq 100 index in order to get similar diversification;
- More conservative than stocks: The ETF price cannot drop to zero, ETF cannot be broke and it cannot file a bankruptcy. If you see it then this is The End. Index listing is managed by professionals: weak companies are reviewed on a regular basis and when it is necessary are replaced by the stronger companies. In case of DJI the listing is managed by “Wall Street Journal”, in case of S&P 500 the listing is managed by Standards & Poors, Nasdaq 100 index is managed by Nasdaq OMX, etc. They basically do portfolio selection and all fundamental analysis instead of you;
- Easier to analyze: By having several stocks in your portfolio, it could become complicated to analyze them. You have to do some fundamental analysis for each stock, look at chart and do some technical analysis and in addition it is recommended to analyze indexes that cover your stock to see your industry and whole market general trend. It could be quite complicated and time consuming. The ETFs analysis is simpler and very often it could be narrowed to technical analysis of indexes only.
As you may see that ETFs have become very popular because they attract mutual fund investors by their low cost, tax efficiency, saved features of the mutual funds and obtained flexibility of stocks. At the same time ETFs attract stock investors by their ability to diversify portfolio, simplified analysis, protection from bankruptcy. I may say that it is easy to understand why ETFs has become the most popular trading vehicle among all type investors, including large institutional investors, small speculators and active traders. Exchange traded funds have become very liquid (you may sell and buy them very fast) which is another important advantage. Some of the most traded ETFs are: SPY (tracks the S&P 500 index), XLF (tracks the S&P Financials), QQQQ (tracks the Nasdaq 100 index), DIA (tracks the Dow index), IWM (tracks the Russell 2000 index), etc.
Monday, May 11, 2009
Best Technical Indicator
I would recommend those you know the best, but not more than 3 technical indicators. In addition I may recommend using ADX and ATR – not to generate signals but to recognize different market stages and adjust indicators setting accordingly. On my opinion majority of technical indicators works well. A trader just need to know what market he/she is trading is: is it strong trend, is it flat market, is it volatile or quiet. As a rule ATR and ADX gives this picture.
Wednesday, May 6, 2009
Industrial and Financial Sectors
I do not know why we can see increased trading in the industrials and financial sectors. It could be because the investors are waiting to see Chrysler bankruptcy and how it will affect automotive market, or those investors who bought in February decided to pocket a profit or it could be something else. I know one thing - such big volume means that big number of investors (or small number of investors with big money) started to relocate their investments and that may lead to the change in the supply/demand balance and as a result to a change in the stock market sentiment.
I would personally watched very closely stock market over the next couple of sessions to see how the market will react on this volume. I am not telling that the market will drop tomorrow, it could continue to move up, however I would prefer to stay in cash for now. Maybe I'm wrong and maybe I'm loosing opportunity to make some profit, yet, I consider there are moments when it could be useful to stop and monitor for a while in order to see the development of events - in current situation development of reaction on this high volume.
Tuesday, May 5, 2009
Index and Stock Trading
I consider index analysis as one of the most important element in any trading system. A trader should know the general market trend and only index analysis can help with this. I would say there are 2 main points in the index analysis that should be used for stock trading:
- Analyze DJI and S&P 500 indexes to see the general market trend – you do not want to trade against the general market trend, especially if you mid- or long-term trader. If based on the S&P 500 and DJI technical analysis you may define whether the economy is in the recession or on the rise, then you have to build your investment strategy in accordance to this. You do not want to see your pension funds, other long-term and mid-term investments in the long position if the market is in the recession. At the same time it would be wrong to stay in cash if you see the stock market in recovery and up-trend.
- Analyze the index your stock belongs to. If you trade stock of the of the internet company and this stock is covered by the Nasdaq Internet index I think it would be logical to take a look at this index to see the general tendency of all internet publicly traded companies. If you trade stock of the financial company, you may want to take a look on the S&P 500 Financial, Nasdaq 100 Financial or other financial indexes. It could be useful to know what is going on in the industry your stock belongs to.
In general there are only two rules based on the index technical analysis recommended when you trade stocks:
- It could be safer to stay in cash when result of the index technical analysis contradict to the results of your stock technical analysis stock;
- It could be recommended considering opening a trade when signal based on the stock technical analysis goes along with results of the index technical analysis.
By embedding elements of the index technical analysis into a stock trading system you may substantially reduce the number of trades, however I would consider it more conservative trading.
Saturday, May 2, 2009
Index Technical Analysis
So what is going on the stock market from the technical analysis point of view? The stock market has been extremely oversold in all terms during the recent recession. In additions many of the stocks (companies), because of the crisis in the financial sector, were traded below its actual value (they were under evaluated). As a result we had strong recovery movement in period from February 9, 2009 until April 9, 2009. Any strong movement up leads the market into at least short-term oversold condition when the first wave of the investors who wanted to invest into underpriced stocks become exhausted and the second wave of the investors is not coming very fast to keep up-trend moving. For further healthy recovery the stock market needs to be released from these oversold conditions, attract more investors and that is why healthy bullish market supposes to have corrections.
We had one month of up-move and now we have one month of side-move. The same as last week I would say that I’m still in bullish mood, still I may consider possibility of some correctional movement down. Even if my technical analysis is correct and we see drop down, I would not expect it to be strong and prolonged in the time, but rather shallow and short lived.
There are several factors that make me believe in that:
1. Over the last month, by looking on the short-term index charts I may say that according to my short-term technical analysis the indexes very actively reacted on every (even small) volume surge to the index downside by immediate reversal up-move.
2. From the same short-term technical analysis I may say that there were number of occasion when bearish signals were ignored and price continued to move flat or up.
3. The stock market started to ignore negative news. Even we hear and see every day complains about swine flu and Chrysler bankruptcy and TV financial "gurus" are making statements that it negatively affects the market – we still have not seen any strong movement down.
This is one of the characteristic of the long-term bullish market when the majority of investors ignore bearish signals and negative news. In opposite every positive news and bullish signal attract investors to come back into the market and start to invest by buying.
Saturday, April 25, 2009
S&P 500 Chart
From the 60-day chart (see first chart at the top) you may see that almost whole April the indexes basically were in the side move. The Dow (^DJI) index was the first index that started to move side-way, then a week later S&P 500index followed this pattern and the Nasdaq 100 index, as always, still could be considered in the up move. From the second 1-year chart (chart at the bottom) you may see that theS&P 500 index stopped its recovery at the same levels where it was in a side move in period from the middle of January to the middle of February 2009. The DJI index stuck somewhat lower and the Nasdaq 100 run over those levels.
Those traders who are more than a year on the market has to know that in the majority situation the indexes are flat in the resistance and the support as a rule is sharp. It could be easily explained by simple fact that greedy buying usually spread over the time while panic selling is always sudden and sharp. Because of that I believe many of technical analysts are asking: "we were in strong recovery… now we are flat… What is the next? Reverse down?"
The answer on this question, I think, lies in the technical analysis of the longer-term trend. If according to the longer-term analysis we are not any more in the recession I would assume that the odds are still on the side of the recovery and we may see some decline after this side-way move and then resumption of the recovery. We already had similar situation from the middle of June 2003 until the end of August 2003, when after strong recovery stock market has been flat for 2 months and then it went back into up-trend for the next 7 months. As I repeatedly mentioned, the stock market cannot move up all the time. During the recovery (or up-trend), time on time, stock market has to release itself from shorter-term overbought conditions. This is exactly what we have right now on my opinion.
Monday, April 20, 2009
Indexes
At the same time the Nasdaq 100 index is already more than 10% above its December 2008 which I think confirms that the investors are disappointed by financial and automotive sectors and are now become attracted by hi-tech, computer, internet, biotechnology, pharmaceutical and other sectors that are traded on the Nasdaq Exchange and which were relatively stable during the stock market crash (by relatively stable I mean the stocks from these sectors crashed but not as hard as those who are more dependable on the banking industry). I think it is logical that investors are trying to avoid financial stocks - we saw bailouts, however we have not seen changes in the regulations that would prevent (eliminate) a possibility of the "quick backs" manipulations in the financial sector which may lead to the bubbles and crashes.
On the other hand we have DOW index (^DJI) that is still more than 10% below its December 2008 level. Again, DJI index is heavy packed with the financial, automotive companies (stocks). The DJI index covers biggest US companies and the bigger company is the more dependable this company is on the banks.
So, on one side we have more stable non financial companies and on other side we have risky sector which lead the economy into crash. Yet, keep in mind that the bigger risk the bigger potential reward is – just calculate how many percent Citi stock run from its lowest level??? The same as with options (you may lose everything, yet you can receive more than 100% in profit in short period of time) risky under evaluated companies (stocks) may deliver great returns if this is the end of the recession (if you believe that this is the end).
Sunday, April 12, 2009
Simple Technical Analysis
In my last week "S&P 500 Volatility" post I have set next sensitive level market may try to reach. We may see now that the Nasdaq 100 index has broke those levels and run higher, S&P 500 index coming close and the DJI index still almost 1,000 points behind. I still consider that there is a tendency of the market to run higher. The main my argument is that during the recent recovery I witnessed that stock market ignored high volume surges to the up-move and reacted stronger on smaller volume surges to the price down side. It is one of the characteristics of the long term recovery (up-trend) when you need strong oversold indication to see small correction and even light overbought indication restores general market trend.
One one hand I am bullish in the longer-term, on the other hand it is second month when the stock market is in the recovery movement and it would not be a smart move to expect that it will be like this forever. The market will not go up without corrections. Even if my technical analysis (60-day chart I used in my previous posts) indicates higher odds of the further recovery, I'm not telling that in the next few sessions the same technical analysis could turn from bullish into bearish. If the S&P 500 and DJI indexes come to the levels where they stuck (moved flat) in December 2008, there is a possibility we may see flat market again. A lot of traders were entering position in period from the end of October 2008 until beginning of January 2009 (see 2-year DJI chart) and many of them will be in the position to make a trading decision - to keep a position opened or close it with small losses/profit. That is the reason why I call those levels sensitive.
Even the market is positive at this moment the volatility is still high and it's not a time yet when we may forget for intraday charts and take a look at them once a week.
Happy Easter to everyone.
Sunday, April 5, 2009
S&P 500 Volatility
Isn't it nice to watch rising market. Last week on March 29, 2009 in my "S&P 500 Chart" post I have mentioned about increased possibility of the a correction down and we had it. Now, the stock market is up again. We see over the last month what I would call "one step down, two-three up" - we have shallow correction down and then strong continuation of recovery. Again, I repeat what I stated on March 22 in my "Short Technical Analysis" post:
...March 6, 2009 bottom was the last drop in the recession and now we are in the long-term recovery. In this case this bullish volume could be ignored and could indicate long term change in the stock market sentiment as it was in period from March 12 to March 21 of 2003...
That is exactly what wee see: big bullish volume surges during the index up-move are required to push indexes into a small correction, while even small bearish volume surge reverses the indexes back into the up-trend. It's not just about volume indicators. If you take a look at other technical analysis indicators you may notice similar picture: only after strong oversold signal the indexes go down and weak overbought signal push indexes back into recovery mode.
That is exactly what we see when to we do shorter term technical analysis: big bullish volume surges during the index up-move are required to push indexes into a small correction, while even small bearish volume surge reverses the indexes back into the up-trend. It's not just about volume indicators. If you take a look at other technical analysis indicators on shorter-term charts you may notice similar picture: only after strong oversold signal the indexes go down and weak overbought signal push indexes back into recovery mode.
To better understand this shorter term phenomenon we have to take a look at higher timeframe charts. Yes, 60-day chart is good and I use it in many cases to define the general market sentiment, yet, time on time look at higher timeframe is recommended.
From the 2-year S&P 500 chart (1 bar = 2 days) below you may see, that even we had high volume over the past month, from the long-term prospective it is still volume at the bottom – it is still bearish volume and the market is still strongly oversold on this chart. 
The stock market sentiment (sentiment of the Nasdaq 100, S&P 500 and DJI indexes) is positive on this chart. The next sensitive level for S&P 500 is $900 and for DJI is $9,000. We saw a lot of volatile trading around both these levels in period from October 2008 until January 2009.
On the same S&P 500 chart above I have plotted ATR (Average True Range) indicator to display the market volatility over the past year. I mentioned several times that volatility technical analysis is recommended for every trader. The purpose of this analysis is to recognize different stock market stages and adjust technical indicators and trading systems to the current market condition. By following the market volatility I would say:
- Before June 2007 the ATR was in the range of 10-15 points – we were in uptrend.
- In June 2007 the S&P 500 volatility doubled – first sign of recession.
- The Volatility stayed on the June’s level (in the 20-30 points range) until August 2008 – From June 2007 until August 2008 we were in recession.
- After August 2008 we had sharp increase in volatility (up to five times) with peak on October 22, 2008 – it was stock market crash (it was not any more a recession, it was crash).
- We had extremely high volatile market in period from August 2008 until November 2008 – stock market crash.
- Since then the S&P 500 volatility dropped down and basically stays on the June 2007 - August 2008 levels. I would call period from December 2008 until February 2009 as "after crash distribution" or as "levelling" when those stocks that still have to go down went further down (DJI stocks) and those stocks that were healthy and already undervalued remained flat (Nasdaq 100).
Saturday, April 4, 2009
S&P 500 Stocks
The S&P 500 is the most widely followed index After the Dow Jones Industrial Average index and it is considered a barometer for the American economy. The S&P 500 index is included in the Index of Leading Indicators. There are the number of trading vehicle that are designed to follow the S&P 500 index. Hundreds of billions of US dollars have been invested in this index. The SPY (Exchange Traded Fund) is one of the most actively trading stock over the world. The Rydex, ProFunds and other mutual funds and exchange traded funds are designed so as to follow the performance of the S&P 500 index.
Below you may see the list of the S&P 500 stocks (companies) as of April 4, 2009. This could be an outdated listing, yet it may give you the picture of what companies are selected into the S&P 500 index basket. For most recent S&P 500 components listing I would recommend visiting the Standard & Poors official website.
| Ticker | Company | Sector |
| MMM | 3M Co | Industrials |
| ABT | Abbott Laboratories | Health Care |
| ANF | Abercrombie & Fitch Company A | Consumer Discretionary |
| ADBE | Adobe Systems Inc | Information Technology |
| AMD | Advanced Micro Devices | Information Technology |
| AES | AES Corp | Utilities |
| AET | Aetna Inc | Health Care |
| ACS | Affiliated Computer Services | Information Technology |
| AFL | AFLAC Inc | Financials |
| A | Agilent Technologies Inc | Information Technology |
| APD | Air Products & Chemicals Inc | Materials |
| AKS | AK Steel Hldg Corp | Materials |
| AKAM | Akamai Technologies Inc | Information Technology |
| AA | Alcoa Inc | Materials |
| AYE | Allegheny Energy Inc | Utilities |
| ATI | Allegheny Technologies Inc | Materials |
| AGN | Allergan Inc | Health Care |
| ALL | Allstate Corp | Financials |
| ALTR | Altera Corp | Information Technology |
| MO | Altria Group Inc | Consumer Staples |
| AMZN | Amazon.com Inc | Consumer Discretionary |
| AEE | Ameren Corp | Utilities |
| AEP | American Electric Power | Utilities |
| AXP | American Express Co | Financials |
| AIG | American Intl Group Inc | Financials |
| AMT | American Tower Corp A | Telecommunications Services |
| AMP | Ameriprise Financial Inc | Financials |
| ABC | AmerisourceBergen Corp | Health Care |
| AMGN | Amgen Inc | Health Care |
| APH | Amphenol Corp A | Information Technology |
| APC | Anadarko Petroleum Corp | Energy |
| ADI | Analog Devices Inc | Information Technology |
| AOC | Aon Corp | Financials |
| APA | Apache Corp | Energy |
| AIV | Apartment Investment & Mgmt | Financials |
| APOL | Apollo Group Inc | Consumer Discretionary |
| AAPL | Apple Inc. | Information Technology |
| AMAT | Applied Materials Inc | Information Technology |
| ADM | Archer-Daniels-Midland Co | Consumer Staples |
| AIZ | Assurant Inc | Financials |
| T | AT&T Inc | Telecommunications Services |
| ADSK | Autodesk Inc | Information Technology |
| ADP | Automatic Data Processing | Information Technology |
| AN | AutoNation Inc | Consumer Discretionary |
| AZO | AutoZone Inc | Consumer Discretionary |
| AVB | AvalonBay Communities Inc | Financials |
| AVY | Avery Dennison Corp | Industrials |
| AVP | Avon Products | Consumer Staples |
| BHI | Baker Hughes Inc | Energy |
| BLL | Ball Corp | Materials |
| BAC | Bank of America Corp | Financials |
| BCR | Bard C.R. Inc | Health Care |
| BAX | Baxter Intl Inc | Health Care |
| BBT | BB&T Corp | Financials |
| BDX | Becton Dickinson & Co | Health Care |
| BBBY | Bed Bath & Beyond Inc | Consumer Discretionary |
| BMS | Bemis Co Inc | Materials |
| BBY | Best Buy Co Inc | Consumer Discretionary |
| BIG | Big Lots Inc | Consumer Discretionary |
| BIIB | Biogen Idec Inc | Health Care |
| BJS | BJ Services Co | Energy |
| BDK | Black & Decker Corp | Consumer Discretionary |
| HRB | Block H & R Inc | Consumer Discretionary |
| BMC | BMC Software Inc | Information Technology |
| BA | Boeing Co | Industrials |
| BXP | Boston Properties Inc | Financials |
| BSX | Boston Scientific Corp | Health Care |
| BMY | Bristol-Myers Squibb | Health Care |
| BRCM | Broadcom Corp A | Information Technology |
| BF/B | Brown-Forman Corp B | Consumer Staples |
| BNI | Burlington Northern Santa Fe Co | Industrials |
| CA | CA Inc | Information Technology |
| COG | Cabot Oil & Gas A | Energy |
| CAM | Cameron International Corp | Energy |
| CPB | Campbell Soup Co | Consumer Staples |
| COF | Capital One Financial | Financials |
| CAH | Cardinal Health Inc | Health Care |
| CCL | Carnival Corp | Consumer Discretionary |
| CAT | Caterpillar Inc | Industrials |
| CBG | CB Richard Ellis Group Inc A | Financials |
| CBS | CBS Corp B | Consumer Discretionary |
| CELG | Celgene Corp | Health Care |
| CNP | Centerpoint Energy Inc | Utilities |
| CTX | Centex Corp | Consumer Discretionary |
| CTL | Centurytel Inc | Telecommunications Services |
| CEPH | Cephalon Inc | Health Care |
| CF | CF Industries Holdings | Materials |
| CHRW | CH Robinson Worldwide Inc | Industrials |
| CHK | Chesapeake Energy Corp | Energy |
| CVX | Chevron Corp | Energy |
| CME | Chicago Mercantile Exchange | Financials |
| CB | Chubb Corp | Financials |
| CIEN | CIENA Corp | Information Technology |
| CI | CIGNA Corp | Health Care |
| CINF | Cincinnati Financial Corp | Financials |
| CTAS | Cintas Corp | Industrials |
| CSCO | Cisco Systems Inc | Information Technology |
| CIT | CIT Group Inc | Financials |
| C | Citigroup Inc | Financials |
| CTXS | Citrix Systems Inc | Information Technology |
| CLX | Clorox Co | Consumer Staples |
| CMS | CMS Energy Corp | Utilities |
| COH | Coach Inc | Consumer Discretionary |
| KO | Coca-Cola Co | Consumer Staples |
| CCE | Coca-Cola Enterprises | Consumer Staples |
| CTSH | Cognizant Tech Solutions Corp | Information Technology |
| CL | Colgate-Palmolive Co | Consumer Staples |
| CMCSA | Comcast Corp A | Consumer Discretionary |
| CMA | Comerica Inc (MI) | Financials |
| CSC | Computer Sciences | Information Technology |
| CPWR | Compuware Corp | Information Technology |
| CAG | ConAgra Foods Inc | Consumer Staples |
| COP | ConocoPhillips | Energy |
| CNX | CONSOL Energy Inc | Energy |
| ED | Consolidated Edison Inc | Utilities |
| STZ | Constellation Brands Inc A | Consumer Staples |
| CEG | Constellation Energy Group | Utilities |
| CVG | Convergys Corp | Information Technology |
| CBE | Cooper Industries Ltd (Bermuda) | Industrials |
| GLW | Corning Inc | Information Technology |
| COST | Costco Wholesale Corp | Consumer Staples |
| CVH | Coventry Health Care Inc | Health Care |
| COV | Covidien Ltd | Health Care |
| CSX | CSX Corp | Industrials |
| CMI | Cummins Inc | Industrials |
| CVS | CVS Caremark Corp. | Consumer Staples |
| DHR | Danaher Corp | Industrials |
| DRI | Darden Restaurants Inc | Consumer Discretionary |
| DVA | Davita Inc | Health Care |
| DF | Dean Foods Co | Consumer Staples |
| DE | Deere & Co | Industrials |
| DELL | Dell Inc | Information Technology |
| DNR | Denbury Resources Inc | Energy |
| XRAY | Dentsply Intl | Health Care |
| DVN | Devon Energy Corp | Energy |
| DO | Diamond Offshore Drilling | Energy |
| DTV | DIRECTV Group Inc | Consumer Discretionary |
| DFS | Discover Financial Services | Financials |
| D | Dominion Resources Inc | Utilities |
| RRD | Donnelley R.R. & Sons | Industrials |
| DOV | Dover Corp | Industrials |
| DOW | Dow Chemical | Materials |
| DPS | Dr Pepper Snapple Group | Consumer Staples |
| DTE | DTE Energy Co | Utilities |
| DUK | Duke Energy Corp | Utilities |
| DNB | Dun & Bradstreet Corp | Industrials |
| DD | DuPont E.I. de Nemours | Materials |
| DYN | Dynegy Inc A | Utilities |
| ETFC | E*TRADE Financial Corp | Financials |
| EMN | Eastman Chemical Co | Materials |
| EK | Eastman Kodak Co | Consumer Discretionary |
| ETN | Eaton Corp | Industrials |
| EBAY | eBay Inc. | Information Technology |
| ECL | Ecolab Inc | Materials |
| EIX | Edison Intl | Utilities |
| EP | El Paso Corp | Energy |
| ERTS | Electronic Arts | Information Technology |
| EQ | Embarq Corp | Telecommunications Services |
| EMC | EMC Corp | Information Technology |
| EMR | Emerson Electric Co | Industrials |
| ESV | ENSCO Intl Inc | Energy |
| ETR | Entergy Corp | Utilities |
| EOG | EOG Resources | Energy |
| EQT | EQT Corporation | Utilities |
| EFX | Equifax Inc | Industrials |
| EQR | Equity Residential | Financials |
| EL | Estee Lauder Cos. | Consumer Staples |
| EXC | Exelon Corp | Utilities |
| EXPE | Expedia | Consumer Discretionary |
| EXPD | Expeditors Intl of WA Inc | Industrials |
| ESRX | Express Scripts Inc | Health Care |
| XOM | Exxon Mobil Corp | Energy |
| FDO | Family Dollar Stores Inc | Consumer Discretionary |
| FAST | Fastenal Co | Industrials |
| FII | Federated Investors Inc B | Financials |
| FDX | FedEx Corp | Industrials |
| FIS | Fidelity National Information | Information Technology |
| FITB | Fifth Third Bancorp (OH) | Financials |
| FHN | First Horizon National Corp | Financials |
| FE | FirstEnergy Corp | Utilities |
| FISV | Fiserv Inc | Information Technology |
| FLIR | FLIR Systems Inc | Information Technology |
| FLS | Flowserve Corp | Industrials |
| FLR | Fluor Corp | Industrials |
| F | Ford Motor Co | Consumer Discretionary |
| FRX | Forest Laboratories | Health Care |
| FO | Fortune Brands Inc | Consumer Discretionary |
| FPL | FPL Group Inc | Utilities |
| BEN | Franklin Resources Inc | Financials |
| FCX | Freeport McMoRan Copper & Gold | Materials |
| FTR | Frontier Communications Corp | Telecommunications Services |
| GME | GameStop Corp A | Consumer Discretionary |
| GCI | Gannett Co Inc | Consumer Discretionary |
| GPS | Gap Inc | Consumer Discretionary |
| GD | General Dynamics | Industrials |
| GE | General Electric Co | Industrials |
| GIS | General Mills Inc | Consumer Staples |
| GM | General Motors Corp | Consumer Discretionary |
| GPC | Genuine Parts Co | Consumer Discretionary |
| GNW | Genworth Financial Inc | Financials |
| GENZ | Genzyme Corp | Health Care |
| GILD | Gilead Sciences Inc | Health Care |
| GS | Goldman Sachs Group Inc | Financials |
| GR | Goodrich Corp | Industrials |
| GT | Goodyear Tire & Rubber Co | Consumer Discretionary |
| GOOG | Google Inc | Information Technology |
| GWW | Grainger W.W. Inc | Industrials |
| HAL | Halliburton Co | Energy |
| HOG | Harley-Davidson Inc | Consumer Discretionary |
| HAR | Harman Intl Industries Inc | Consumer Discretionary |
| HRS | Harris Corp | Information Technology |
| HIG | Hartford Finl Services Group | Financials |
| HAS | Hasbro Inc | Consumer Discretionary |
| HCP | HCP Inc | Financials |
| HCN | Health Care REIT Inc | Financials |
| HNZ | Heinz H.J. Co | Consumer Staples |
| HSY | Hershey Foods Corp | Consumer Staples |
| HES | Hess Corp | Energy |
| HPQ | Hewlett-Packard Co | Information Technology |
| HD | Home Depot Inc | Consumer Discretionary |
| HON | Honeywell Intl Inc | Industrials |
| HRL | Hormel Foods Corp | Consumer Staples |
| DHI | Horton D.R. Inc | Consumer Discretionary |
| HSP | Hospira Inc | Health Care |
| HST | Host Hotels & Resorts Inc | Financials |
| HCBK | Hudson City Bancorp | Financials |
| HUM | Humana Inc | Health Care |
| HBAN | Huntington Bancshares (OH) | Financials |
| ITW | Illinois Tool Works Inc | Industrials |
| RX | IMS Health Inc | Health Care |
| IR | Ingersoll-Rand Company Ltd | Industrials |
| TEG | Integrys Energy Group Inc | Utilities |
| INTC | Intel Corp | Information Technology |
| ICE | IntercontinentalExchange | Financials |
| IPG | Interpublic Group Cos | Consumer Discretionary |
| IBM | Intl Business Machines Corp | Information Technology |
| IFF | Intl Flavors & Fragrances | Materials |
| IGT | Intl Game Technology | Consumer Discretionary |
| IP | Intl Paper Co | Materials |
| INTU | Intuit Inc | Information Technology |
| ISRG | Intuitive Surgical Inc | Health Care |
| IVZ | Invesco Ltd | Financials |
| IRM | Iron Mountain Inc | Industrials |
| ITT | ITT Corporation | Industrials |
| JBL | Jabil Circuit Inc | Information Technology |
| JEC | Jacobs Engineering Group Inc | Industrials |
| JNS | Janus Capital Group Inc | Financials |
| JDSU | JDS Uniphase Corp | Information Technology |
| JNJ | Johnson & Johnson | Health Care |
| JCI | Johnson Controls Inc | Consumer Discretionary |
| JPM | JP Morgan Chase & Co | Financials |
| JNPR | Juniper Networks Inc | Information Technology |
| KBH | KB Home | Consumer Discretionary |
| K | Kellogg Co | Consumer Staples |
| KEY | KeyCorp | Financials |
| KMB | Kimberly-Clark | Consumer Staples |
| KIM | Kimco Realty Corp | Financials |
| KG | King Pharmaceuticals Inc | Health Care |
| KLAC | KLA-Tencor Corporation | Information Technology |
| KSS | Kohl's Corp | Consumer Discretionary |
| KFT | Kraft Foods Inc A | Consumer Staples |
| KR | Kroger Co | Consumer Staples |
| LLL | L-3 Communications Holdings | Industrials |
| LH | Lab Corp of America Hldgs | Health Care |
| LM | Legg Mason Inc | Financials |
| LEG | Leggett & Platt | Consumer Discretionary |
| LEN | Lennar Corp A | Consumer Discretionary |
| LUK | Leucadia National Corp (NY) | Financials |
| LXK | Lexmark International Inc | Information Technology |
| LIFE | Life Technologies Corp | Health Care |
| LLY | Lilly Eli & Co | Health Care |
| LTD | Limited Brands Inc | Consumer Discretionary |
| LNC | Lincoln National Corp | Financials |
| LLTC | Linear Technology Corp | Information Technology |
| LMT | Lockheed Martin | Industrials |
| L | Loews Corp | Financials |
| LO | Lorillard Inc | Consumer Staples |
| LOW | Lowe's Cos Inc | Consumer Discretionary |
| LSI | LSI Corporation | Information Technology |
| MTB | M&T Bank Corp | Financials |
| M | Macy's Inc | Consumer Discretionary |
| MTW | Manitowoc Co Inc | Industrials |
| MRO | Marathon Oil Corp | Energy |
| MAR | Marriott Intl A | Consumer Discretionary |
| MMC | Marsh & McLennan Companies | Financials |
| MI | Marshall & Ilsley Corp (WI) | Financials |
| MAS | Masco Corp | Industrials |
| MEE | Massey Energy Co | Energy |
| MA | Mastercard Inc A | Information Technology |
| MAT | Mattel Inc | Consumer Discretionary |
| MBI | MBIA Inc | Financials |
| MFE | McAfee Inc | Information Technology |
| MKC | McCormick & Co | Consumer Staples |
| MCD | McDonald's Corp | Consumer Discretionary |
| MHP | McGraw-Hill Cos Inc | Consumer Discretionary |
| MCK | McKesson Corp | Health Care |
| MWV | MeadWestvaco Corp | Materials |
| MHS | Medco Health Solutions Inc | Health Care |
| MDT | Medtronic Inc | Health Care |
| WFR | MEMC Electronic Materials | Information Technology |
| MRK | Merck & Co Inc | Health Care |
| MDP | Meredith Corp | Consumer Discretionary |
| MET | Metlife Inc | Financials |
| MCHP | Microchip Technology Inc | Information Technology |
| MU | Micron Technology Inc | Information Technology |
| MSFT | Microsoft Corp | Information Technology |
| MIL | Millipore Corp | Health Care |
| MOLX | Molex Inc | Information Technology |
| TAP | Molson Coors Brewing Co B | Consumer Staples |
| MON | Monsanto Co. | Materials |
| MWW | Monster Worldwide Inc | Industrials |
| MCO | Moody's Corp | Financials |
| MS | Morgan Stanley | Financials |
| MOT | Motorola Inc | Information Technology |
| MUR | Murphy Oil Corp | Energy |
| MYL | Mylan Inc. | Health Care |
| NBR | Nabors Industries Ltd | Energy |
| NDAQ | Nasdaq OMX Group/The | Financials |
| NOV | National Oilwell Varco Inc | Energy |
| NSM | National Semiconductor | Information Technology |
| NTAP | NetApp Inc | Information Technology |
| NYT | New York Times Co A | Consumer Discretionary |
| NWL | Newell Rubbermaid Inc | Consumer Discretionary |
| NEM | Newmont Mining Corp | Materials |
| NWSA | News Corporation A | Consumer Discretionary |
| GAS | NICOR Inc | Utilities |
| NKE | NIKE Inc B | Consumer Discretionary |
| NI | Nisource Inc | Utilities |
| NBL | Noble Energy Inc | Energy |
| JWN | Nordstrom Inc | Consumer Discretionary |
| NSC | Norfolk Southern Corp | Industrials |
| NU | Northeast Utilities | Utilities |
| NTRS | Northern Trust Corp (IL) | Financials |
| NOC | Northrop Grumman Corp | Industrials |
| NOVL | Novell Inc | Information Technology |
| NVLS | Novellus Systems Inc | Information Technology |
| NUE | Nucor Corp | Materials |
| NVDA | Nvidia Corp | Information Technology |
| NYX | NYSE Euronext | Financials |
| ORLY | O'Reilly Automotive | Consumer Discretionary |
| OXY | Occidental Petroleum | Energy |
| ODP | Office Depot Inc | Consumer Discretionary |
| OMC | Omnicom Group | Consumer Discretionary |
| ORCL | Oracle Corp | Information Technology |
| OI | Owens-Illinois Inc | Materials |
| PCAR | PACCAR Inc | Industrials |
| PTV | Pactiv Corporation | Materials |
| PLL | Pall Corp | Industrials |
| PH | Parker-Hannifin Corp | Industrials |
| PDCO | Patterson Cos Inc | Health Care |
| PAYX | Paychex Inc | Information Technology |
| BTU | Peabody Energy Corp | Energy |
| JCP | Penney J.C. Inc | Consumer Discretionary |
| PBCT | People's United Financial Inc | Financials |
| POM | Pepco Holdings Inc | Utilities |
| PBG | Pepsi Bottling Group Inc | Consumer Staples |
| PEP | PepsiCo Inc | Consumer Staples |
| PKI | PerkinElmer Inc | Health Care |
| PFE | Pfizer Inc | Health Care |
| PCG | PG&E Corporation | Utilities |
| PM | Philip Morris International | Consumer Staples |
| PNW | Pinnacle West Capital (AZ) | Utilities |
| PXD | Pioneer Natural Resources | Energy |
| PBI | Pitney Bowes Inc | Industrials |
| PCL | Plum Creek Timber Co | Financials |
| PNC | PNC Finl Services Group | Financials |
| RL | Polo Ralph Lauren A | Consumer Discretionary |
| PPG | PPG Industries Inc | Materials |
| PPL | PPL Corp | Utilities |
| PX | Praxair Inc | Materials |
| PCP | Precision Castparts Corp | Industrials |
| PFG | Principal Financial Group | Financials |
| PG | Procter & Gamble | Consumer Staples |
| PGN | Progress Energy Inc | Utilities |
| PGR | Progressive Corp | Financials |
| PLD | Prologis | Financials |
| PRU | Prudential Financial Inc | Financials |
| PEG | Public Service Enterprise Grp | Utilities |
| PSA | Public Storage | Financials |
| PHM | Pulte Homes Inc | Consumer Discretionary |
| QLGC | QLogic Corp | Information Technology |
| QCOM | QUALCOMM Inc | Information Technology |
| DGX | Quest Diagnostics | Health Care |
| STR | Questar Corp | Utilities |
| Q | Qwest Communications Intl Inc | Telecommunications Services |
| RSH | RadioShack Corp | Consumer Discretionary |
| RRC | Range Resources Corp | Energy |
| RTN | Raytheon Co | Industrials |
| RF | Regions Financial Corp | Financials |
| RSG | Republic Services Inc | Industrials |
| RAI | Reynolds American Inc | Consumer Staples |
| RHI | Robert Half Intl Inc | Industrials |
| ROK | Rockwell Automation Inc | Industrials |
| COL | Rockwell Collins | Industrials |
| RDC | Rowan Companies Inc | Energy |
| R | Ryder System Inc | Industrials |
| SWY | Safeway Inc | Consumer Staples |
| CRM | Salesforce.com | Information Technology |
| SNDK | SanDisk Corp | Information Technology |
| SLE | Sara Lee Corp | Consumer Staples |
| SCG | SCANA Corp | Utilities |
| SGP | Schering-Plough Corp | Health Care |
| SLB | Schlumberger Ltd | Energy |
| SCHW | Schwab Charles Corp | Financials |
| SNI | Scripps Networks Interactive | Consumer Discretionary |
| SEE | Sealed Air Corp | Materials |
| SHLD | Sears Holdings Corp | Consumer Discretionary |
| SRE | Sempra Energy | Utilities |
| SHW | Sherwin-Williams Co | Consumer Discretionary |
| SIAL | Sigma-Aldrich Corp | Materials |
| SPG | Simon Property Group | Financials |
| SLM | SLM Corp | Financials |
| SII | Smith Intl Inc | Energy |
| SJM | Smucker J.M. Co | Consumer Staples |
| SNA | Snap On Inc | Consumer Discretionary |
| SO | Southern Co | Utilities |
| LUV | Southwest Airlines Co | Industrials |
| SWN | Southwestern Energy Co | Energy |
| SE | Spectra Energy Corp | Energy |
| S | Sprint Nextel Corp | Telecommunications Services |
| STJ | St Jude Medical Inc | Health Care |
| SWK | Stanley Works | Consumer Discretionary |
| SPLS | Staples Inc | Consumer Discretionary |
| SBUX | Starbucks Corp | Consumer Discretionary |
| HOT | Starwood Hotel & Resort World | Consumer Discretionary |
| STT | State Street Corp | Financials |
| SRCL | Stericycle Inc | Industrials |
| SYK | Stryker Corp | Health Care |
| JAVA | Sun Microsystems Inc | Information Technology |
| SUN | Sunoco Inc | Energy |
| STI | SunTrust Banks Inc (GA) | Financials |
| SVU | Supervalu Inc | Consumer Staples |
| SYMC | Symantec Corp | Information Technology |
| SYY | Sysco Corp | Consumer Staples |
| TROW | T Rowe Price Group Inc | Financials |
| TGT | Target Corp | Consumer Discretionary |
| TE | TECO Energy Inc | Utilities |
| TLAB | Tellabs Inc | Information Technology |
| THC | Tenet Healthcare | Health Care |
| TDC | Teradata Corp | Information Technology |
| TER | Teradyne Inc | Information Technology |
| TSO | Tesoro Corp | Energy |
| TXN | Texas Instruments Inc | Information Technology |
| TXT | Textron Inc | Industrials |
| BK | The Bank of New York Mellon Corp | Financials |
| TMO | Thermo Fisher Scientific | Health Care |
| TIF | Tiffany & Co | Consumer Discretionary |
| TWC | Time Warner Cable Inc | Consumer Discretionary |
| TWX | Time Warner Inc | Consumer Discretionary |
| TIE | Titanium Metals Corp | Materials |
| TJX | TJX Cos Inc | Consumer Discretionary |
| TMK | Torchmark Corp | Financials |
| TSS | Total System Services Inc | Information Technology |
| TRV | Travelers Cos Inc | Financials |
| TEL | Tyco Electronics Ltd | Information Technology |
| TSN | Tyson Foods Inc A | Consumer Staples |
| UNP | Union Pacific Corp | Industrials |
| UPS | United Parcel Service Inc B | Industrials |
| X | United States Steel Corp | Materials |
| UTX | United Technologies Corp | Industrials |
| UNH | Unitedhealth Group Inc | Health Care |
| UNM | Unum Group | Financials |
| USB | US Bancorp | Financials |
| VLO | Valero Energy Corp | Energy |
| VAR | Varian Medical Systems Inc | Health Care |
| VTR | Ventas Inc | Financials |
| VRSN | VeriSign Inc | Information Technology |
| VZ | Verizon Communications Inc | Telecommunications Services |
| VFC | VF Corp | Consumer Discretionary |
| VIA/B | Viacom Inc B (New) | Consumer Discretionary |
| VNO | Vornado Realty Trust | Financials |
| VMC | Vulcan Materials Co | Materials |
| WMT | Wal-Mart Stores | Consumer Staples |
| WAG | Walgreen Co | Consumer Staples |
| DIS | Walt Disney Co | Consumer Discretionary |
| WPO | Washington Post Co B | Consumer Discretionary |
| WMI | Waste Management Inc | Industrials |
| WAT | Waters Corp | Health Care |
| WPI | Watson Pharmaceuticals | Health Care |
| WLP | WellPoint Inc | Health Care |
| WFC | Wells Fargo & Co | Financials |
| WU | Western Union Co | Information Technology |
| WY | Weyerhaeuser Co | Materials |
| WHR | Whirlpool Corp | Consumer Discretionary |
| WFMI | Whole Foods Market Inc | Consumer Staples |
| WMB | Williams Cos Inc | Energy |
| WIN | Windstream Corp | Telecommunications Services |
| WEC | Wisconsin Energy Corp | Utilities |
| WYE | Wyeth | Health Care |
| WYN | Wyndham Worldwide Corp | Consumer Discretionary |
| WYNN | Wynn Resorts Ltd | Consumer Discretionary |
| XEL | Xcel Energy Inc | Utilities |
| XRX | Xerox Corp | Information Technology |
| XLNX | Xilinx Inc | Information Technology |
| XL | XL Capital Ltd A (Bermuda) | Financials |
| XTO | XTO Energy Inc | Energy |
| YHOO | Yahoo Inc | Information Technology |
| YUM | Yum! Brands Inc | Consumer Discretionary |
| ZMH | Zimmer Holdings Inc | Health Care |
| ZION | Zions Bancorp (UT) | Financials |
