The stock market bounced strongly higher. S&P 500 Composite (SPX) broke out above resistance at 1040.78, which was the low of 5/25/2010. SPX jumped up 3.13% to 1060.27 on 7/7/10, for its largest daily gain in 6 weeks, since 5/27/10. Short-term price momentum oscillators, such as RSI (14), MACD, Directional Movement, and McClellan Oscillator, still are showing bullish divergences. Sentiment has been quite bearish for many weeks. The market could squeeze the bears in a further oversold bounce to the 1070-1090 zone, or higher.
Emerging Markets Stocks ETF (EEM) absolute price crossed above its 50-day SMA on 7/7/10 thereby turning neutral.
Crude Oil rose above 2-day highs on 7/7/10. Oil might have a chance for a bounce up toward resistance in days ahead.
Gold fell further below 6-week lows on 7/7/10 before reversing to close moderately higher. Gold’s short-term bearish trend was not broken, however.
Copper nearest futures price rose above 4-day highs on 7/7/10. Copper could have a chance for a further short-tem bounce.
The U.S. dollar price fell further below 8-week lows on 7/7/10. The USD chart appears still bearish for the short term.
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Spotlight on event stocks: Here is a stock screen I designed to pick out potential event stocks, both Bullish and Bearish. Sometimes, stocks with large changes in price and volume are revealed to be deal stocks, sooner or later, or are the subject of some other extraordinary events, positive or negative.
Bullish Stocks: Rising Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
6.82% , IIH , Internet Infrastructure H, IIH
2.32% , PBJ , Food & Beverage, PBJ
3.86% , BDH , Broadband H, BDH
6.42% , EWP , Spain Index, EWP
3.25% , ISI , LargeCap Blend S&P 1500 iS, ISI
3.21% , JKE , Growth LargeCap iS M, JKE
3.26% , EWN , Netherlands Index, EWN
9.87% , STT , STATE STREET
3.98% , EZU , EMU Europe Index, EZU
2.40% , EWK , Belgium Index, EWK
7.65% , HGSI , Human Genome Sciences Inc
5.57% , RKH , Bank Regional H, RKH
3.44% , UTH , Utilities H, UTH
10.79% , AES , AES
3.80% , JKL , Value SmallCap iS M, JKL
6.92% , NTRS , NORTHERN TRUST
3.54% , EWU , United Kingdom Index, EWU
7.52% , HP , Helmerich & Payne HP
8.12% , DYN , DYNEGY
2.64% , VOX , Telecom Services VIPERs, VOX
3.24% , IVW , Growth S&P 500/BARRA, IVW
7.77% , PNC , PNC FINL SVC
8.33% , BHH , Internet B2B H, BHH
2.47% , PPH , Pharmaceutical H, PPH
2.81% , IWC , Microcap Russell, IWC
3.76% , RPG , Growth S&P 500, RPG
6.78% , ALTR , ALTERA
5.53% , EWI , Italy Index, EWI
6.39% , BK , BANK OF NEW YORK
5.47% , VRSN , VeriSign Inc
3.14% , JKG , MidCap Blend Core iS M, JKG
1.92% , PSTL , Steel Global PS ETF, PSTL
6.15% , LXK , LEXMARK INTL STK A
6.73% , KG , KING PHARM
8.22% , STI , SUNTRUST BANKS
8.55% , MI , MARSHAL & ILSLEY
6.68% , NTAP , NETWK APPLIANCE
3.28% , PWP , Value MidCap Dynamic PS, PWP
3.79% , IYT , Transportation Av DJ, IYT
6.66% , CMA , COMERICA
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-17.28% , FNM , FANNIE MAE
-8.06% , FDO , FAMILY DLR STRS
-5.03% , FRE , FREDDIE MAC
-3.07% , DLTR , Dollar Tree Stores Inc
-5.69% , DXD , Short 200% Dow 30 PS, DXD
-6.36% , SDS , Short 200% S&P 500 PS, SDS
-6.30% , QID , Short 200% QQQ PS, QID
-1.12% , WAT , WATERS
-3.52% , MYY , Short 100% MidCap 400, MYY
-1.29% , VMC , VULCAN MATERIALS
-3.14% , PSQ , Short 100% QQQ, PSQ
-0.67% , TMO , THERMO ELECTRON
-0.35% , NYT , NY TIMES STK A
-0.13% , AGG , Bond, Aggregate, AGG
-0.10% , PKI , PERKINELMER
-1.21% , ABK , AMBAC FINL GRP
-3.14% , SH , Short 100% S&P 500, SH
9 major U.S. stock sectors ranked in order of long-term relative strength:
Consumer Discretionary (XLY) Neutral, Market Weight. The Relative Strength Ratio (XLY/SPY) fell below its 50-day SMA on 6/17/10, thereby turning neutral. XLY/SPY remains above its 200-day SMA. Absolute price of XLY fell below 4-month lows intraday on 7/1/10. Support 28.64, 28.21, and 26.62. Resistance 33.12, 34.39, 36.13, 38.25 and 39.09.
Consumer Staples (XLP) Neutral, Market Weight. The Relative Strength Ratio (XLP/SPY) turned bullish on 7/6/10 when the 50-day SMA crossed above the 200-day SMA. In contrast, absolute price of XLP fell below 8-month lows intraday on 7/1/10 and is bearish. Support 25.30 and 24.95. Resistance 26.97, 27.83, 27.95, 28.20, 28.75, 29.29 and 30.29.
Utilities (XLU) Neutral, Market Weight. The Relative Strength Ratio (XLU/SPY) rose above 6-month highs on 7/6/10. The XLU/SPY Ratio’s 50-day SMA is still below the 200-day SMA, however, so the XLU/SPY remains neutral. Absolute price of XLU crossed above its 50-day SMA on 7/7/10, thereby turning neutral. Support 27.91, 27.44, and 25.76. Resistance 30.39, 30.59, 30.91, 31.64 and 32.08.
Technology (XLK) Neutral, Market Weight. The Relative Strength Ratio (XLK/SPY) has been consolidating gains since peaking on 12/31/09. Absolute price of XLK turned bearish on 7/6/10: the 50-day SMA crossed below the 200-day SMA, and price is below both SMAs. Support 20.01 and 19.51. Resistance 22.62, 23.27, 24.16, 24.68, and 25.69.
Industrial (XLI) Neutral, Market Weight. The Relative Strength Ratio (XLI/SPY) is stuck between 50- and 200-day SMAs and remains neutral. Absolute price of XLI fell below 4-month lows intraday on 7/6/10 but reversed to close higher on the day. Support 26.79 and 26.66. Resistance 30.60, 33.12, 33.46, 34.24, 34.50, and 35.00.
Health Care (XLV) Neutral, Market Weight. The Relative Strength Ratio (XLV/SPY) has been consolidating losses since making a low on 4/26/10. The XLV/SPY Ratio’s 50-day SMA is still below the 200-day SMA, so the XLV/SPY remains neutral. Absolute price of XLV fell below 11-month lows intraday on 7/1/10 and remains bearish because price is below both SMAs and the 50 is below the 200 SMA. Support 27.49. Resistance 29.93, 30.83, 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.
Financial (XLF) Neutral, Market Weight. The Relative Strength Ratio (XLF/SPY) remains bearish (below both SMAs and with the 50 below the 200 SMA). Absolute price of XLF turned bearish on 7/2/10: the 50-day SMA crossed below the 200-day SMA, and price is below both SMAs. Support 13.34 and 13.08. Resistance 15.05, 15.67, 16.13, 16.90, 17.12, 17.16, and 17.87.
Materials (XLB) Bearish, Under Weight. The Relative Strength Ratio (XLB/SPY) remains bearish below falling SMAs. Absolute price of XLB fell below 11-month lows intraday on 7/1/10 and remains bearish with the 50-day SMA below the 200-day SMA of price since 6/18/10. Support 27.67. Resistance 31.80, 33.06, 35.47, and 37.56.
Energy (XLE) Bearish, Under Weight. The Relative Strength Ratio (XLE/SPY) remains bearish, below SMAs. Absolute price of XLE fell below 10-month lows intraday on 7/1/10 and remains bearish below SMAs. Support 48.56, 46.16, and 43.66. Resistance 56.70, 58.11, 59.84, 62.30, 62.73, 69.95, and 78.10.
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) has been rising since its low on 5/20/10 but remains neutral, with the 50-day below the 200-day SMA. Absolute price of EEM crossed above its 50-day SMA on 7/7/10 thereby turning neutral.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) has been rising since its low on 5/26/10 but remains neutral, with the 50-day below the 200-day SMA. Absolute price of EFA has stabilized since its low on 5/25/10 but remains bearish due to negative SMA relationships.
NASDAQ Composite/S&P 500 Relative Strength Ratio is neutral between 50- and 200-day SMAs. Absolute price fell below 7-month lows on 7/1/10.
Russell 1000 Value ETF Relative Strength Ratio (IWD/SPY) has turned neutral since making a high on 5/3/10.
Growth Stock/Value Stock Relative Strength Ratio (IWF/IWD) has turned neutral since making a low on 4/14/10.
The S&P 500 Equally Weighted ETF Relative Strength Ratio (RSP/SPY) turned neural when it fell below its 50-day SMA on 6/29/10.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below the lows of the previous 30 years on 6/15/10 and remains bearish. Big caps have been out of favor for more than 10 years, since 3/29/2000.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) has turned neutral since making a high on 5/17/10.
The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) remains neutral but is very close to a bullish signal. Absolute price of MDY crossed below its 200 SMA on 6/29/10 and remains neutral.
Crude Oil nearest futures contract rose above 2-day highs on 7/7/10. Oil might have a chance for a bounce up toward resistance in days ahead. Support 71.09, 70.93, 69.51, 68.59, 67.15, 65.05, and 64.24. Resistance 79.38, 79.94, 81.29, 87.15, 90.51, 98.65, and 102.84.
Gold nearest futures contract fell further below 6-week lows on 7/7/10 before reversing to close moderately higher. Gold’s short-term bearish trend was not broken, however. Support 1185.0, 1168.0, 1156.2, 1124.3, 1084.8, 1045.2, 1026.9 and 989.3. Resistance: 1264.8, 1263.7, and 1266.5.
Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) fell sharply since 6/28/10. The Ratio is technically bearish, below both SMAs and with the 50-day SMA below the 200-day SMA.
Silver/Gold Ratio turned bearish on 5/17/10 when it crossed below both 50- and 200-day SMAs, and with the 50-day SMA already below the 200-day SMA.
Copper nearest futures price rose above 4-day highs on 7/7/10. Copper could have a chance for a further short-tem bounce. Weakness in Copper suggests doubts about prospects for the world economy, while strength suggests confidence. Support 2.8555, 2.8445, and 2.72. Resistance 3.123, 3.187, 3.2675, 3.3225, 3.795 and 4.27.
U.S. Treasury Bond nearest futures contract price rose further above 14-month highs on 7/1/10, again confirming a major uptrend. Support 124.19, 123.03, 121.28, 119.26, 118.24, 118.12, 115.15, 114.06. 113.04, and 112.15. Resistance 130.31, 133.20, 137.31, and 142.31.
Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) has recovered somewhat since making a low on 6/30/10 but remains bearish by strict interpretation of 50-day and 200-day SMA relationships.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell below 9-month lows on 7/2/10 and remains RELATIVELY bearish. This implies that investors are choosing less inflation protection. Absolute price of TIP turned from bullish to neutral as of 7/2/10.
The U.S. dollar nearest futures contract price fell further below 8-week lows on 7/7/10. The USD chart appears still bearish for the short term. Support 83.07, 81.74, 80.14, 79.73, 79.61, 78.83, 78.20, 76.74 and 75.90. Resistance 86.71, 89.22, 89.71, and 92.53.
The Art of Contrary Thinking: The various surveys of investor sentiment are best considered as background factors. The majority of investors can be right for a long time before a major trend finally changes course. The Art of Contrary Thinking is best used together with more precise market timing tools.
Advisory Service Sentiment: There were 41.1% Bulls versus 33.3% Bears as of 6/30/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio fell to1.23, down from 1.32 the previous week. The current Bull/Bear ratio has fallen substantially from its peak at 3.36 set on 1/13/10, which was the highest bullish sentiment in 6 years. The 20-year range is 0.41 to 3.74, the median is 1.51, and the mean is 1.57.
VIX Fear Index jumped up to 37.58 on 7/1/10, up from 22.87 on 6/21/10. A high and strongly rising VIX suggests increasing bearish sentiment. VIX is a market estimate of expected constant 30-day volatility, calculated by weighting S&P 500 Index CBOE option bid/ask quotes spanning a wide range of strike prices for the two nearest expiration dates.
VXN Fear Index jumped up to 38.29 on 7/1/10, up from 23.12 on 6/18/10. A high and strongly rising VXN suggests increasing bearish sentiment. VXN measures NASDAQ Volatility using a method comparable to that used for VIX.
ISEE Call/Put Ratio fell to .059 on 5/7/10, a low level that indicates bearish sentiment. Its 2-year mean is 1.20, and its typical range is 0.69 to 1.71, which represents two standard deviations from the mean.
CBOE Put/Call Ratio rose to 0.96 on 5/20/10, its highest level of the year. A high level indicates bearish sentiment. The 2-year mean is 0.70, and the typical range is 0.44 to 0.96, which represents two standard deviations from the mean.
The Dow Theory again confirmed a Bullish Major Trend on 4/26/10, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 18 months. The Dow Theory signaled the current Primary Tide Bull Market on 7/23/09, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 6 months. That 7/23/09 bullish signal reversed the previous bearish signal: the two Averages signaled a Primary Tide Bear Market on 11/21/07, when both Averages closed below their closing price lows of August 2007.
S&P 500 Composite (SPX) broke out above resistance at 1040.78, which was the low of 5/25/2010. SPX jumped up 3.13% to 1060.27 on 7/7/10, for its largest daily gain in 6 weeks, since 5/27/10. Short-term price momentum oscillators, such as RSI (14), MACD, Directional Movement, and McClellan Oscillator, still are showing bullish divergences. Sentiment has been quite bearish for many weeks. The market could squeeze the bears in a further oversold bounce to the 1070-1090 zone or higher. A critical number to watch for support for the SPX is 1008.55, which is the Fibonacci 38.2% retracement of 2009-2010 range. Support 1008.55, 991.97, 978.51, 956.23, and 943.29. Resistance 1040.78, 1131.23, 1173.57, and 1219.80.
S&P 500 Cash Index Potential Resistance
1576.09, high of 10/11/2007
1552.76, high of 10/31/2007
1523.57, high of 12/11/2007
1498.85, high of 12/26/2007
1440.24, high of 5/19/2008
1406.32, high of 5/29/2008
1381.50, Fibonacci 78.6% of 2007-2009 range
1366.59, high of 6/17/2008
1335.63, high of 6/25/2008
1313.15, high of 8/11/2008
1274.42, high of 9/8/2008
1255.09, high of 9/12/2008
1238.81, Fibonacci 78.6% of 1,576.09 high
1228.74, Fibonacci 61.8% of 2007-2009 range
1220.03, high of 9/25/2008
1219.80, high of 4/26/2010
1173.57, high of 5/13/2010
1131.23, high of 6/21/2010
S&P 500 Cash Index Potential Support
1010.91, low of 7/1/2010
1008.55, Fibonacci 38.2% of 2009-2010 range
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
943.29, Gann 50.0% of 2009-2010 range
878.04, Fibonacci 61.8% of 2009-2010 range
874.17, Gann 62.5% of 2009-2010 range
869.32, low of 7/8/2009
805.17, Gann 75.0% of 2009-2010 range
785.13, Fibonacci 78.6% of 2009-2010 range
666.79, intraday low of 3/6/2009
One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
6.42% Spain Index, EWP
5.53% Italy Index, EWI
5.33% Semiconductor iS GS, IGW
5.23% Metals & Mining SPDR, XME
5.14% Semiconductor SPDR, XSD
5.05% Realty Cohen & Steers, ICF
4.96% REIT Wilshire, RWR
4.86% REIT VIPERs, VNQ
4.77% Real Estate US DJ, IYR
4.55% Financial Services DJ, IYG
4.54% Homebuilders SPDR, XHB
4.47% Networking, IGN
4.45% Basic Materials DJ US, IYM
4.41% Financial SPDR, XLF
4.29% Financials VIPERs, VFH
4.28% Financial DJ US, IYF
3.99% Austria Index, EWO
3.99% Materials SPDR, XLB
3.98% EMU Europe Index, EZU
3.92% France Index, EWQ
3.86% Technology DJ US, IYW
3.83% Value SmallCap S&P 600, RZV
3.82% Value MidCap Russell, IWS
3.79% Transportation Av DJ, IYT
3.76% Capital Markets KWB ST, KCE
3.76% Info Tech VIPERs, VGT
3.67% Value SmallCap VIPERS, VBR
3.66% Value MidCap S&P 400 B, IJJ
3.63% MidCap Russell, IWR
3.60% MidCap S&P 400 SPDRs, MDY
3.60% Energy VIPERs, VDE
3.58% Natural Resource iS GS, IGE
3.58% European VIPERs, VGK
3.56% Small Cap VIPERs, VB
3.56% Growth SmallCap VIPERs, VBK
3.54% Europe 350 S&P Index, IEV
3.54% United Kingdom Index, EWU
3.53% Energy SPDR, XLE
3.52% Water Resources, PHO
3.49% SmallCap Russell 2000, IWM
3.47% Energy DJ, IYE
3.47% Industrial SPDR, XLI
3.46% MidCap S&P 400 iS, IJH
3.46% WilderHill Clean Energy PS, PBW
3.44% Growth SmallCap R 2000, IWO
3.43% Energy Global, IXC
3.41% Growth MidCap Russell, IWP
3.41% Value SmallCap Russell 2000, IWN
3.38% Value SmallCap S&P 600 B, IJS
3.38% LargeCap Blend S&P=Weight R, RSP
3.36% Value 1000 Russell, IWD
3.35% Global 100, IOO
3.34% Growth MidCap 400 B, IJK
3.33% Value EAFE MSCI, EFV
3.28% SmallCap S&P 600, IJR
3.28% Sweden Index, EWD
3.28% LargeCap Blend Russell 3000, IWV
3.27% Latin Am 40, ILF
3.26% Netherlands Index, EWN
3.25% Blend Total Market VIPERs, VTI
3.24% Growth S&P 500/BARRA, IVW
3.23% LargeCap 1000 R, IWB
3.23% Growth 1000 Russell, IWF
3.22% Technology SPDR, XLK
3.20% Value VIPERs, VTV
3.20% Value S&P 500 B, IVE
3.19% Growth LargeCap NASDAQ 100, QQQQ
3.19% Growth VIPERs, VUG
3.19% Oil, Crude, U.S. Oil Fund, USO
3.18% Growth BARRA Small Cap 600, IJT
3.17% LargeCap VIPERs, VV
3.15% S&P 500 iS LargeCap Blend, IVV
3.15% S&P 500 SPDRs LargeCap Blend, SPY
3.14% Utilities VIPERs, VPU
3.11% EAFE Index, EFA
3.11% Australia Index, EWA
3.09% Utilities SPDR, XLU
3.08% LargeCap Blend S&P 100, OEF
3.00% South Africa Index, EZA
3.00% Russia MV, RSX
2.95% Brazil Index, EWZ
2.91% DIAMONDS (DJIA), DIA
2.89% Dividend DJ Select, DVY
2.82% Consumer Discretionary SPDR, XLY
2.81% Microcap Russell, IWC
2.80% Telecom DJ US, IYZ
2.80% Value LargeCap Dynamic PS, PWV
2.80% Global ex US ACWI iS, ACWX
2.77% Dividend International, PID
2.75% Dividend High Yield Equity PS, PEY
2.73% Dividend Appreciation Vipers, VIG
2.67% Dividend SPDR, SDY
2.55% Pacific ex-Japan, EPP
2.52% Growth EAFE MSCI, EFG
2.50% Canada Index, EWC
2.49% Turkey MSCI iS, TUR
2.40% Belgium Index, EWK
2.39% Germany Index, EWG
2.38% Switzerland Index, EWL
2.35% Small Cap EAFE MSCI iS, SCZ
2.27% Biotech SPDR, XBI
2.26% Agriculture DB PS, DBA
2.26% Commodity Tracking, DBC
2.22% Pacific VIPERs, VPL
2.21% Emerging Markets, EEM
2.19% Emerging 50 BLDRS, ADRE
2.15% Mexico Index, EWW
2.14% Indonesia MV, IDX
2.14% China LargeCap Growth G D H USX PS, PGJ
1.95% Health Care SPDR, XLV
1.95% Emerging VIPERs, VWO
1.91% Consumer Staples SPDR, XLP
1.90% Japan Index, EWJ
1.72% Malaysia Index, EWM
1.66% Chile MSCI iS, ECH
1.58% Thailand MSCI iS, THD
1.50% India Earnings WTree, EPI
1.44% Silver Trust iS, SLV
1.36% Taiwan Index, EWT
1.28% South Korea Index, EWY
1.27% Hong Kong Index, EWH
1.21% Bond, High-Yield Corporate, HYG
1.12% Singapore Index, EWS
1.05% Gold Shares S.T., GLD
0.76% India PS, PIN
0.72% Preferred Stock iS, PFF
0.70% China 25 iS, FXI
0.64% Bond Ex-US Treas, BWX
0.61% Financial Preferred, PGF
0.40% Bond EmrgMkt JPM iS, EMB
0.19% Bond Muni ATM-Free S&P iS, MUB
0.06% Bond, Corp, LQD
-0.01% Bond, 1-3 Year Treasury, SHY
-0.13% Bond, Aggregate, AGG
-0.31% Bond, 10 Year Treasury, IEF
-0.42% Bond, TIPS, TIP
-1.17% Bond, 20+ Years Treasury, TLT
