The Dow has a weak downtrend rating. The Nasdaq has a sidelines rating. The S&P 500 has a weak downtrend rating. The Russell 2000 has a downtrend rating. The Russell 2000 is leading the other major indices lower and has already been testing its 200 day moving average this week. The Russell 2000 is at a critical support level at the 200 day moving average. A break below this level next week will result in a huge panic sell-off.

My profit thesis is that the Bears have the advantage over the Bulls going into trading next week. Now let’s look under-the-hood at market internals.

Only 34% of stocks on the NYSE are trading above their 50 day moving average. That’s a bearish bias. 62% of stocks are trading above their 200 day moving average. That’s a bullish bias but one we give a lower rating because the percent of stocks trading above the 200 day moving average is more of a lagging indicator than the percent of stocks trading above the 50 day moving average.

The Elder system applied to the S&P 500 (SPY) on both the daily and weekly charts, each give a red sell high-low bar. This is the first red sell signal on the weekly chart for SPY for all of 2012! It makes perfect sense that we are seeing a weekly sell signal like this during the start of the Worst 6 Months Of The Year (May – October) and Sell In May and Go Away.

The VIX has a very weak uptrend rating and will be viewed as neutral until it can confirm a break above the 200 day moving average.

Gold, silver, and mining stocks continue to be in strong downtrends. All these dumb gold bug trolls are posting stupid stuff on my videos about global paper currencies being diluted and going worthless and gold is the only thing with real value and is going to $5,000… $10,000… and beyond… what idiots. Not even the so called gold experts like Peter Schiff, Doug Casey, Ed Steer, got it right. They’ve all been made out to be the perma-gold cheerleaders I’ve always said they were. I delete their comments and ban them from my channel. I run a stock trading channel, not a perma-gold bull channel. I told them 6 to 8 weeks ago that was baloney. I said look at what the market is saying. The worse the news is in Europe, the worse it is for the Euro. When the Euro goes down, the U.S. dollar goes up. When the U.S. dollar goes up, gold goes down. It’s as simple as that.

Fundamental analysis reports that moved markets last week were: Thursday’s International Trade, and Friday’s Producer Price Index.

The trade balance worsened in the latest numbers but the details are encouraging as both exports and non-petroleum imports gained. In March, the U.S. trade gap expanded to $51.8 billion from $45.4 billion in February (originally $46.0 billion). Analysts forecast a deficit of $49.5 billion. Exports rose 2.9 percent after a 0.3 percent increase in February. Imports rebounded a sharp 5.2 percent, following a 2.8 percent drop the month before.

Weaker energy cost pulled down the headline PPI in the latest report. The PPI in April fell 0.2 percent after a flat reading in March.

Fundamental analysis reports with the greatest probability of moving markets next week are:

Tue – May 15, 2012 = Consumer Price Index, Retail Sales
Wed – May 16, 2012 = Industrial Production, Housing Starts