Performance of Asset Classes and Stocks in 2011

The calendar flips to 2012 and we finally say good bye to 2011. There have been many year-end commentaries around the blogosphere highlighting that the S&P 500 was almost exactly unchanged on the year (dshort), and that there were a few stocks that performed exceptionally (stocktradingtogo). I want to look a little wider by presenting a snapshot of how various asset classes performed and delve a little deeper by looking at how individual stocks behind the indexes performed.

McDonalds (MCD) All-Time High, AAPL strong in Bear Market

This will be a quick post taking stock of the week's events. First of all, looking at Stan Weinstein's indicators the weight of evidence as I see it still points to bearish on the long-term (see table below). Delving into individual sectors doesn't offer much encouragement as every sector in the US stock market has a downward sloping 50-day moving averages and recently made new 6-month lows. The remaining bullish case for stocks continues to be McDonalds (MCD) and Apple (AAPL) which are holding the weight of the DOW and the S&P500 on their shoulders. In fact, the top three industry groups over the last quarter are #1 personal computers thanks to AAPL, #2 Gold, and #3 Restaurants where MCD is has by far the largest market cap and is among the best performers.

Weinstein's Indicators

Indicator	Status	Bias
Stage Analysis	S&P 500 below MA(30)	Bearish
Advance-Decline	NYAD Below MA(30), new low last week	Bearish
Market Momentum	NYAD MA(200) made new low last week, but still above zero	Bearish/ Neutral
Highs vs Lows	NYHL negative	Bearish
World Markets	VEU is well below MA(30). Due for a rally, but trend is down.	Bearish
Market Leader	AAPL is above MA(30) and close to all-time high	Bullish
Price-to-Dividend	S&P500 dividend yield is below the 1930-2011 average, but higher than most data since 1995.	Bearish/ Neutral
Contrary Opinion	AAII sentiment survey is neutral (36% bull, 40% bear).	Neutral

Short-term, it's reasonable to expect a rally on the S&P since the recent lows have held up. I am always on the lookout for stocks showing relative strength so I collected a few in the chart below. These stocks made new highs as the market held its ground. Notice that all of these stocks were pulled down by the initial selloff, but they made higher-highs and higher-lows in the following weeks. Nitrogen fertilizer is acting strong.

• CF (CF Industries | NYSE) - manufactures and distributes nitrogen and phosphate fertilizer
• DLTR (Dollar Tree | NASDAQ) - discount variety stores in the United States and Canada
• TNH (Terra Nitrogen | NYSE) - produces and distributes nitrogen fertilizer
• HANS (Hansen Natural | NASDAQ) - beverages, brand development, e.g, Monster Energy
• MCD (McDonald's Corp. | NYSE) - 32,478 restaurants in 117 countries

The Canadian all-time high list is full of Gold, Gold, and more Gold. With the exception of a few names including:

• NZ (New Zealand Energy | TSXV)
• RMT (Raimount Energy | TSXV)
• SAT (Asian Television Network International | TSXV)

don’t forget to think for yourself...it is your money, no one is going to care about it as much as you do. ... don’t forget how to be a kind and caring person, it isn’t easy but it can mean so much more than another zero to your net worth - Brian Shannon (AlphaTrends)

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