An Insignificant Short-term Minor Ripple to the Downside

The Dow Theory suggests a Minor Ripple to the downside within a Bullish Secondary Wave within a Primary Tide Bull Market.

S&P 500 Composite (SPX) price broke down below 14-day lows on 8/12/10. SPX appears to be correcting and consolidating gains since the 1219.80 high of 4/26/2010. Further consolidation seems likely during the vacation month of August.
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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
62.95% , DYN , DYNEGY
2.44% , ADSK , AUTODESK
3.22% , AEE , AMEREN
4.79% , NVDA , NVIDIA
1.98% , MJN , Mead Johnson Nutrition
1.83% , EIX , EDISON INTL
0.90% , IIH , Internet Infrastructure H, IIH
0.58% , VWO , Emerging VIPERs, VWO
0.05% , PWP , Value MidCap Dynamic PS, PWP
0.26% , EWU , United Kingdom Index, EWU
1.20% , CPWR , COMPUWARE
0.69% , EPP , Pacific ex-Japan, EPP
0.14% , GVI , Bond Interm U.S. Gov, GVI
0.68% , PFF , Preferred Stock iS, PFF
1.31% , APD , AIR PRODS & CHEM
0.63% , XEL , XCEL ENERGY
0.71% , HAS , HASBRO
0.66% , AZO , AUTOZONE
1.31% , FE , FIRSTENERGY
0.90% , RDC , ROWAN COMPANIES
1.16% , IFF , INTL FLAV & FRAG
0.63% , CCE , COCA COLA ENTER
0.55% , MBI , MBIA
0.06% , EWH , Hong Kong Index, EWH
0.14% , EZA , South Africa Index, EZA
1.11% , CMS , CMS ENERGY
1.25% , TLT , Bond, 20+ Years Treasury, TLT
0.87% , GR , GOODRICH CORP
0.48% , AEP , AM ELEC POWER
0.28% , DVN , DEVON ENERGY
0.15% , CINF , CINCINNATI FIN
0.57% , PFG , PRINCIPAL FINL
0.07% , MUB , Bond Muni ATM-Free S&P iS, MUB
0.77% , PAYX , PAYCHEX
0.09% , IR , INGER RAND
0.07% , NOC , NORTHROP GRUMMAN
0.03% , WFMI , Whole Foods Market Inc
0.14% , UNM , UNUMPROVIDENT
0.14% , CNP , CENTERPNT ENERGY
0.09% , EMB , Bond EmrgMkt JPM iS, EMB

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-5.74% , DV , DeVry, Inc.
-1.14% , PZJ , SmallCap PS Zacks, PZJ
-7.15% , JWN , NORDSTROM
-5.07% , DDS , DILLARD STK A
-1.19% , PZI , Micro Cap Zachs, PZI
-3.78% , APOL , APOLLO GROUP
-0.92% , EWQ , France Index, EWQ
-4.71% , JCP , JC PENNEY
-1.24% , PWJ , Growth Mid Cap Dynamic PS, PWJ
-2.46% , LLY , ELI LILLY
-1.03% , EWN , Netherlands Index, EWN
-1.01% , PEY , Dividend High Yield Equity PS, PEY
-3.39% , GRMN , GARMIN LTD
-0.25% , SDY , Dividend SPDR, SDY
-4.08% , CECO , CAREER EDUCATION CORP
-1.73% , PXN , Nanotech Lux, PXN
-3.60% , GLW , CORNING
-0.90% , PST , 200% Short Bond 7-10 Yr T, PST
-1.14% , VBK , Growth SmallCap VIPERs, VBK
-0.35% , XLG , LargeCap Rydex Rus Top 50, XLG
-0.39% , JKG , MidCap Blend Core iS M, JKG
-1.19% , ROST , Ross Stores Inc
-1.58% , LTD , LIMITED BRANDS
-2.42% , RFMD , RF Micro Devices Inc
-1.99% , ININ , Interactive Intelligence ININ
-1.25% , EOG , EOG RESOURCES
-1.01% , SNI , Scripps Networks Interactive
-1.93% , JCI , JOHNSON CONTROLS
-0.58% , PBE , Biotech & Genome, PBE
-0.45% , SWH , Software H, SWH
-1.17% , MDT , MEDTRONIC
-0.76% , LOW , LOWES
-1.05% , VB , Small Cap VIPERs, VB
-1.37% , BWX , Bond Ex-US Treas, BWX
-0.67% , EWK , Belgium Index, EWK
-1.01% , MDP , MEREDITH
-0.25% , TYC , TYCO INTL
-1.78% , PNC , PNC FINL SVC
-0.53% , DUK , DUKE ENERGY
-0.98% , KCE , Capital Markets KWB ST, KCE

9 major U.S. stock sectors ranked in order of long-term relative strength:

Utilities (XLU) Bullish, Over Weight. The Relative Strength Ratio (XLU/SPY) rose to a new 8-month high on 8/11/10 and remains bullish: above 50-day and 200-day SMAs, and with the 50 above the 200. Absolute price of XLU remains neutral but is close to a SMA bullish crossover. Support 30.17, 29.66, 27.91, 27.44, and 25.76. Resistance 31.64 and 32.08.

Industrial (XLI) Bullish, Over Weight. The Relative Strength Ratio (XLI/SPY) rose to a new 2-month high on 7/30/10, after turning bullish on 7/22/10, when it crossed above the 50-day SMA. Absolute price rose to a new 2-month high on 8/9/10. XLI is slightly above both SMAs and therefore is bullish. Support 27.74, 26.79 and 26.66. Resistance 32.41, 33.46, 34.24, 34.50, and 35.00.

Consumer Discretionary (XLY) Neutral, Market Weight. The Relative Strength Ratio (XLY/SPY) is between 50- and 200-day SMAs, so XLY/SPY is to neutral. The 50-day SMA remains above the 200-day SMA. Absolute price of XLY turned bullish on 7/30/10, when price crossed above the 50-day SMA. Support 29.90, 28.64, 28.21, and 26.62. Resistance 33.12, 34.39, 36.13, 38.25 and 39.09. Absolute price of XLP crossed above the 200-day SMA on 7/22/10

Consumer Staples (XLP) Neutral, Market Weight. The Relative Strength Ratio (XLP/SPY) turned bullish on 8/11/10 when it crossed above the 50-day SMA. Absolute price of XLP remains neutral, above both 50-day SMA but below the 200-day SMA. The 50-day SMA remains below the 200-day SMA. Support 26.34, 25.30, and 24.95. Resistance 27.83, 27.95, 28.20, 28.75, 29.29 and 30.29.

Materials (XLB) Neutral, Market Weight. The Relative Strength Ratio (XLB/SPY) rose to a new 3-month high on 8/2/10 and remains neutral, with the 50-day SMA below the 200-day SMA. Absolute price rose to a new 2-month high on 8/2/10 and remains neutral, with the 50-day SMA below the 200-day SMA. Support 29.43, 27.67. Resistance 33.06, 35.47, and 37.56.

Technology (XLK) Neutral, Market Weight. The Relative Strength Ratio (XLK/SPY) fell to a new 2-month low on 8/13/10 and remains neutral. Absolute price of XLK is bearish, below both SMAs and with the 50-day SMA below the 200-day SMA. Support 20.01 and 19.51. Resistance 22.62, 23.27, 24.16, 24.68, and 25.69.

Health Care (XLV) Bearish, Under Weight. The Relative Strength Ratio (XLV/SPY) turned bearish again on 7/20/10, as it fell back below its 50-day SMA. Absolute price of XLV turned neutral on 8/2/10 as it crossed above the 50-day SMA. Price remains below the 200-day SMA. Support 27.49. Resistance 29.38, 29.93, 30.83, 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.

Energy (XLE) Bearish, Under Weight. The Relative Strength Ratio (XLE/SPY) turned neutral on 7/29/10 as it crossed above the 50-day SMA. It remains below the 200-day SMA, and the 50-day SMA remains below the 200-day SMA. Absolute price of XLE rose to a new 2-month high on 8/5/10 and remains neutral. Support 51.31, 48.56, 46.16, and 43.66. Resistance 56.70, 58.11, 59.84, 62.30, 62.73, 69.95, and 78.10.

Financial (XLF) Bearish, Under Weight. The Relative Strength Ratio (XLF/SPY) turned back to bearish on 8/3/10 as it crossed below both the 50-day SMA and the 200-day SMA. The 50-day SMA is below the 200-day SMA. Absolute price turned bearish again on 8/11/10 when it fell below the 50-day SMA. Support 13.34 and 13.08. Resistance 15.67, 16.13, 16.90, 17.12, 17.16, and 17.87.
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) rose to a new 7-month high on 8/2/02. It is bullish, with the 50-day above the 200-day SMA. Absolute price of EEM rose to a new 3-month high on 8/2/02. It remains neutral, with the 50-day below the 200-day SMA, but appears to be heading toward a bullish crossover as well.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) remains neutral, with the 50-day below the 200-day SMA. Absolute price of EFA also remains neutral, with the 50-day below the 200-day SMA.

NASDAQ Composite/S&P 500 Relative Strength Ratio fell below 6-month lows on 8/13/10, thereby confirming a significant correction to the downside.

The S&P 500 Equally Weighted ETF Relative Strength Ratio (RSP/SPY) appears neutral for the intermediate term, consolidating gains since peaking on 6/15/10. Longer term, RSP /SPY has been bullish, trending upward since 11/19/08.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) appears to be consolidating losses since its low on 6/15/10. 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) fell to 6-monthlows on 8/13/10, confirming a bearish trend for the intermediate term. This trend has been weakening since peaking on 5/17/10. Longer term, IWM/SPY has been bullish, trending upward since 4/8/99.

The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) appears neutral for the intermediate term, consolidating gains since peaking on 5/28/10. Longer term, MDY /SPY has been bullish, trending upward since 4/7/99.

Crude Oil nearest futures contract fell below 4-week lows on 8/13/10. Oil remains stuck in a correction/consolidation phase that started after the peak on 5/3/10. Support 74.25, 71.09, 70.93, 69.51, 68.59, 67.15, 65.05, and 64.24. Resistance 84.55, 87.15, 90.51, 98.65, and 102.84.

Gold nearest futures contract rose above 4-week highs on 8/13/10, confirming a minor upturn. The problem is the larger time frame: Gold fell below 12-week lows intraday on 7/28/10 and has been in an intermediate-term downside correction within a major bullish trend since 6/21/10. There is no convincing technical evidence that the correction might not resume. Support 1191.5, 1155.6, 1124.3, 1084.8, 1045.2, 1026.9 and 989.3. Resistance: 1218.8, 1220.8, 1264.8, 1263.7, and 1266.5.

Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) has been whipsawing sideways through moving averages in recent months. Best stand aside until a clear trend emerges.

Silver/Gold Ratio has been mostly neutral, consolidating losses since making a low on 2/8/10. Longer term, Silver has underperformed Gold since 4/19/06.

Copper nearest futures contract price consolidated gains short term since peaking at 3.4105 on 8/4/10. Copper remains in a significant uptrend for the intermediate-term. Strength in Copper suggests confidence about prospects for the world economy, while weakness in Copper suggests doubts. Support 2.9285, 2.8555, 2.8445, and 2.72. Resistance 3.3225, 3.795 and 4.27.

U.S. Treasury Bond nearest futures contract price rose to 17-month highs on 8/13/10, confirming a significant longer-term uptrend. Support 126.01, 125.07, 124.19, 123.03, 121.28, 119.26, 118.24, 118.12, 115.15, 114.06. 113.04, and 112.15. Resistance 133.20, 137.31, and 142.31.

Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) has turned bearish for the intermediate term, heading lower since the peak on 1/8/10 From 3/9/09 to 1/8/10, JNK/LQD was bullish, with the ratio moving upward and Junk outperforming.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell below 15-month lows on 8/13/10 and remains RELATIVELY bearish. This implies that investors are choosing less inflation protection.

The U.S. dollar nearest futures contract price rose to 3-week highs on 8/13/10, confirming a short-term bounce, or upside correction. Support 80.14, 79.73, 79.61, 78.83, 78.20, 76.74 and 75.90. Resistance 83.64, 85.36, 86.71, 89.22, 89.71, and 92.53.

Advisory Service Sentiment: There were 41.7% Bulls versus 27.5% Bears as of 8/11/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio rose to 1.52, up from 1.17 the previous week. This ratio has been rising since making a low at 0.94 on 7/14/10, which was the lowest since 0.82 on 4/1/09. The 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.

The Dow Theory suggests a Minor Ripple to the downside within a Bullish Secondary Wave within a Primary Tide Bull Market, in my interpretation. Both Averages broke down below 3-week lows on 8/13/10. This suggests nothing more than an insignificant short-term Minor Ripple to the downside. On 8/9/10, both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 3 months, again confirming a Secondary Wave to the upside. The Dow Theory last 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) price broke down below 14-day lows on 8/12/10. SPX appears to be correcting and consolidating gains since the 1219.80 high of 4/26/2010. Further consolidation seems likely during the vacation month of August.

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
1040.00, Fibonacci 61.8% of 2010 range
1131.23, high of 6/21/2010

S&P 500 Cash Index Potential Support
1071.07, Gann 50.0% of June-Aug. 2010 range
1060.21, Fibonacci 23.6% of 2010 range
1056.87, Fibonacci 38.2% of June-Aug. 2010 range
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
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

1.92% Chile MSCI iS, ECH
1.33% Malaysia Index, EWM
1.25% Bond, 20+ Years Treasury, TLT
1.12% India Earnings WTree, EPI
0.90% South Korea Index, EWY
0.90% India PS, PIN
0.84% Singapore Index, EWS
0.77% Australia Index, EWA
0.74% Taiwan Index, EWT
0.74% Indonesia MV, IDX
0.69% Pacific ex-Japan, EPP
0.68% Preferred Stock iS, PFF
0.58% Emerging VIPERs, VWO
0.55% China LargeCap Growth G D H USX PS, PGJ
0.54% Emerging Markets, EEM
0.44% Bond, High-Yield Corporate, HYG
0.43% Utilities VIPERs, VPU
0.43% Bond, 10 Year Treasury, IEF
0.39% Thailand MSCI iS, THD
0.39% Bond, Corp, LQD
0.36% Utilities SPDR, XLU
0.35% Turkey MSCI iS, TUR
0.28% Silver Trust iS, SLV
0.26% Bond, TIPS, TIP
0.26% United Kingdom Index, EWU
0.23% Bond, Aggregate, AGG
0.20% Latin Am 40, ILF
0.14% South Africa Index, EZA
0.10% China 25 iS, FXI
0.09% Bond EmrgMkt JPM iS, EMB
0.08% Agriculture DB PS, DBA
0.07% REIT Wilshire, RWR
0.07% Bond Muni ATM-Free S&P iS, MUB
0.06% Hong Kong Index, EWH
0.00% Global ex US ACWI iS, ACWX
0.00% Pacific VIPERs, VPL
0.00% Realty Cohen & Steers, ICF
0.00% REIT VIPERs, VNQ
0.00% Russia MV, RSX
-0.01% Bond, 1-3 Year Treasury, SHY
-0.01% Brazil Index, EWZ
-0.03% Gold Shares S.T., GLD
-0.04% Consumer Staples SPDR, XLP
-0.04% Mexico Index, EWW
-0.08% Value MidCap Russell, IWS
-0.08% Small Cap EAFE MSCI iS, SCZ
-0.09% Commodity Tracking, DBC
-0.10% Growth EAFE MSCI, EFG
-0.10% DIAMONDS (DJIA), DIA
-0.11% Japan Index, EWJ
-0.11% Dividend DJ Select, DVY
-0.12% Canada Index, EWC
-0.13% Energy Global, IXC
-0.14% Industrial SPDR, XLI
-0.14% Emerging 50 BLDRS, ADRE
-0.17% MidCap Russell, IWR
-0.17% Energy SPDR, XLE
-0.17% Financial Preferred, PGF
-0.17% Austria Index, EWO
-0.22% Real Estate US DJ, IYR
-0.23% Value 1000 Russell, IWD
-0.23% Energy VIPERs, VDE
-0.23% Global 100, IOO
-0.25% Dividend SPDR, SDY
-0.27% Homebuilders SPDR, XHB
-0.27% Value S&P 500 B, IVE
-0.28% Financial SPDR, XLF
-0.28% S&P 500 iS LargeCap Blend, IVV
-0.29% Energy DJ, IYE
-0.29% S&P 500 SPDRs LargeCap Blend, SPY
-0.30% LargeCap VIPERs, VV
-0.32% Value VIPERs, VTV
-0.32% Sweden Index, EWD
-0.32% Financial DJ US, IYF
-0.33% Switzerland Index, EWL
-0.33% Value MidCap S&P 400 B, IJJ
-0.34% Dividend Appreciation Vipers, VIG
-0.34% LargeCap Blend S&P 100, OEF
-0.35% Telecom DJ US, IYZ
-0.35% LargeCap Blend S&P=Weight R, RSP
-0.35% EAFE Index, EFA
-0.37% Value LargeCap Dynamic PS, PWV
-0.37% LargeCap 1000 R, IWB
-0.38% Health Care SPDR, XLV
-0.38% Blend Total Market VIPERs, VTI
-0.38% Oil, Crude, U.S. Oil Fund, USO
-0.39% Growth 1000 Russell, IWF
-0.41% MidCap S&P 400 iS, IJH
-0.42% LargeCap Blend Russell 3000, IWV
-0.42% MidCap S&P 400 SPDRs, MDY
-0.43% Europe 350 S&P Index, IEV
-0.43% Dividend International, PID
-0.44% Growth MidCap Russell, IWP
-0.44% European VIPERs, VGK
-0.45% Growth VIPERs, VUG
-0.45% Financials VIPERs, VFH
-0.47% Growth S&P 500/BARRA, IVW
-0.47% Technology SPDR, XLK
-0.47% Financial Services DJ, IYG
-0.48% Materials SPDR, XLB
-0.51% Basic Materials DJ US, IYM
-0.52% Value EAFE MSCI, EFV
-0.54% Technology DJ US, IYW
-0.55% Natural Resource iS GS, IGE
-0.55% Semiconductor SPDR, XSD
-0.61% Growth MidCap 400 B, IJK
-0.67% Info Tech VIPERs, VGT
-0.67% Belgium Index, EWK
-0.67% Semiconductor iS GS, IGW
-0.71% Growth LargeCap NASDAQ 100, QQQQ
-0.74% Transportation Av DJ, IYT
-0.78% EMU Europe Index, EZU
-0.84% Germany Index, EWG
-0.85% Water Resources, PHO
-0.87% Networking, IGN
-0.92% France Index, EWQ
-0.92% Value SmallCap VIPERS, VBR
-0.95% Italy Index, EWI
-0.96% Metals & Mining SPDR, XME
-0.98% Microcap Russell, IWC
-0.98% Capital Markets KWB ST, KCE
-1.01% Dividend High Yield Equity PS, PEY
-1.03% Netherlands Index, EWN
-1.05% Small Cap VIPERs, VB
-1.06% Value SmallCap Russell 2000, IWN
-1.13% Consumer Discretionary SPDR, XLY
-1.13% SmallCap Russell 2000, IWM
-1.14% Growth SmallCap VIPERs, VBK
-1.19% Growth SmallCap R 2000, IWO
-1.20% Growth BARRA Small Cap 600, IJT
-1.23% Biotech SPDR, XBI
-1.24% SmallCap S&P 600, IJR
-1.36% Value SmallCap S&P 600 B, IJS
-1.37% Bond Ex-US Treas, BWX
-1.37% WilderHill Clean Energy PS, PBW
-1.57% Spain Index, EWP
-1.68% Value SmallCap S&P 600, RZV