Consumer Discretionary Stock Sector Relative Strength Ratio (XLY/SPY) rose above 12-year highs on 5/27/10 and remains bullish.

Industrial (XLI) Stock Sector Relative Strength Ratio (XLI/SPY) rose further above its 50-day SMA on 5/27/10 and remains bullish.

Health Care Stock Sector Relative Strength Ratio (XLV/SPY) fell steeply on 5/27/10 and remains bearish.

NASDAQ Composite/S&P 500 Relative Strength Ratio crossed above its 50-day simple moving average on 5/27/10 thereby turning bullish again. Absolute price of the NASDAQ crossed above its 50-day simple moving average.

Russell 1000 Value ETF Relative Strength Ratio (IWD/SPY) crossed above its 50-day simple moving average on 5/27/10 thereby turning bullish again. Absolute price of IWD crossed above its 200-day simple moving average.

Growth Stock/Value Stock Relative Strength Ratio (IWF/IWD) crossed below both its 50- and 200-day simple moving averages on 5/27/10 thereby turning bearish again.

The S&P 500 Equally Weighted ETF Relative Strength Ratio (RSP/SPY) rose to challenge its highs on 5/27/10 and remains bullish.

The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose to challenge its highs on 5/27/10 and remains bullish.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below the lows of the previous 22 months on 5/27/10 and remains bearish.

U.S. Treasury Bond nearest futures contract price suffered a minor breakdown on 5/27/10 which might signal a correction.

The U.S. dollar nearest futures contract price appears to have hit resistance near its 87.625 high set on 05/19/10, which followed a big 5-week price run-up.

Crude Oil and Copper both broke out above 6-day highs on 5/27/10. Both look due for oversold bounces.

S&P 500 Composite (SPX) absolute price rose strongly above 4-day highs on 5/27/10. This week, SPX turn up from a deeply oversold position and previous support, suggesting that bargain hunting demand appeared where it should have, technically speaking.

Clearly, excessive bullish sentiment has been wrung out of the stock market. This is a major change from last month. On 4/26/10, I wrote: “Investors Intelligence survey of stock market newsletter advisors, Call/Put Volume Ratios, and implied option volatility have shown bullish complacency in recent weeks. Excessive bullish sentiment sometimes precedes a shakeout to the downside.” We got that shakeout, and now it appears to be over.
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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
2.90% , DGT , Global Titans, DGT
6.33% , EWU , United Kingdom Index, EWU
5.27% , PSI , Semiconductors, PSI
17.70% , NTAP , NETWK APPLIANCE
2.27% , FPX , IPOs, First Tr IPOX-100, FPX
7.41% , TBH , Telebras HOLDRS, TBH
4.50% , EPU , Peru MSCI iS, EPU
4.89% , RYAAY , Ryanair Holdings plc
3.14% , RPV , Value S&P 500, RPV
6.22% , IEV , Europe 350 S&P Index, IEV
4.36% , PXQ , Networking, PXQ
7.19% , EWQ , France Index, EWQ
4.31% , RFV , Value MidCap S&P 400, RFV
4.22% , IJS , Value SmallCap S&P 600 B, IJS
7.38% , EWO , Austria Index, EWO
4.06% , PWJ , Growth Mid Cap Dynamic PS, PWJ
3.78% , PIV , Value Line Timeliness MidCap Gr, PIV
2.04% , VDC , Consumer Staples VIPERs, VDC
2.70% , PBJ , Food & Beverage, PBJ
8.48% , HP , Helmerich & Payne HP
2.38% , PIC , Insurance, PIC
6.36% , KEY , KEYCORP
9.22% , RSX , Russia MV, RSX
12.83% , CAR , Avis Budget Group, Inc. (CAR)
3.92% , PEJ , Leisure & Entertainment, PEJ
3.22% , OEF , LargeCap Blend S&P 100, OEF
7.86% , PFG , PRINCIPAL FINL
5.72% , WHR , WHIRLPOOL
6.98% , NBR , NABORS
4.18% , APC , ANADARKO PETRO
7.89% , CTB , COOPER TIRE
6.71% , GNTX , Gentex Corporation
4.29% , HAL , HALLIBURTON
7.50% , TIF , TIFFANY
5.14% , PIN , India PS, PIN
3.62% , JKG , MidCap Blend Core iS M, JKG
4.76% , LVLT , LEVEL 3 COMMUNICATIONS
5.56% , WOR , WORTHINGTON INDS
5.47% , PGJ , China LargeCap Growth G D H USX PS, PGJ
4.93% , COST , COSTCO WHOLESAL

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-4.54% , MON , MONSANTO
-1.43% , TLH , Bond 10-20 Year US Treas, TLH
-1.06% , JNJ , JOHNSON&JOHNSON
-2.62% , NE , NOBLE
-0.38% , GVI , Bond Interm U.S. Gov, GVI
-0.52% , LQD , Bond, Corp, LQD
-7.54% , QID , Short 200% QQQ PS, QID
-0.24% , AGG , Bond, Aggregate, AGG

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

Consumer Discretionary (XLY) Bullish, Overweight. The Relative Strength Ratio (XLY/SPY) rose above 12-year highs on 5/27/10 and remains bullish. Absolute price of XLY rose above 6-day highs. XLY rose further above its 200-day SMA and February low and remains neutral. Support 30.34. Resistance 34.39, 36.13, 38.25 and 39.09.

Industrial (XLI) Bullish, Overweight. The Relative Strength Ratio (XLI/SPY) rose further above its 50-day SMA on 5/27/10 and remains bullish. Absolute price of XLI rose above 5-day highs. XLI rose further above its 200-day SMA and February low and remains neutral. Support 27.91. Resistance 32.41, 33.46, 34.24, 34.50, and 35.00.

Technology (XLK) Neutral, Market Weight. The Relative Strength Ratio (XLK/SPY) has been chopping sideways and remains neutral. Absolute price of XLK above 5-day highs. XLK held above its previous 5/6/10 low and remains neutral. Support 20.64. Resistance 23.27, 24.16, 24.68, and 25.69.

Consumer Staples (XLP) Neutral, Market Weight. The Relative Strength Ratio (XLP/SPY) rose to a 7-month high on 5/20/10 but has had a mild correction since and remains neutral. Absolute price of XLP also remains neutral. Support 25.87 and 24.95. Resistance 27.83, 27.95, 28.20, 28.75, 29.29 and 30.29.

Financial (XLF) Neutral, Market Weight. The Relative Strength Ratio (XLF/SPY) and absolute price of XLF both rose above 5-day highs and remain neutral. Support 13.84 and 13.51. Resistance 15.67, 16.13, 16.90, 17.12, 17.16, and 17.87.

Materials (XLB) Neutral, Market Weight. The Relative Strength Ratio (XLB/SPY) fell below 10-month lows on 5/20/10 and remains bearish. Absolute price of XLB crossed below the 200-day SMA on 5/14/10 and remains neutral. Support 28.87. Resistance 33.06, 35.47, and 37.56.

Health Care (XLV) Neutral, Market Weight. The Relative Strength Ratio (XLV/SPY) fell steeply on 5/27/10 and remains bearish. Absolute price of XLV fell below 6-month lows on 5/25/10 and remains neutral. Support 27.96. Resistance 30.83, 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.

Energy (XLE) Neutral, Market Weight. The Relative Strength Ratio (XLE/SPY) had a big oversold bounce on 5/27/10 but remains bearish. Absolute price of XLE fell below its 8-month lows on 5/25/10 and remains neutral. Support 50.15 Resistance 58.11, 59.84, 62.30, 62.73, 69.95, and 78.10.

Utilities (XLU) Neutral, Market Weight. The Relative Strength Ratio (XLU/SPY) fell below 2-week lows 5/27/10 and remains neutral. Absolute price of XLU fell below 9-month lows on 5/6/10 and remains neutral. Support 27.44, 25.76. Resistance 30.59, 30.91, 31.64 and 32.08.
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell to a 12-month low on 5/20/10. EEM/SPY trend turned bearish on 4/16/10, according to strict moving average analysis. Absolute price of EEM fell to an 8-month low on 5/25/10.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below 5-year lows on 5/26/10 and remains bearish. Absolute price of EFA fell below 10-month lows on 5/25/10 and remains bearish.

NASDAQ Composite/S&P 500 Relative Strength Ratio crossed above its 50-day simple moving average on 5/27/10 thereby turning bullish again. Absolute price of the NASDAQ crossed above its 50-day simple moving average on 5/27/10 and has been holding above its low of 2/5/10.

Russell 1000 Value ETF Relative Strength Ratio (IWD/SPY) crossed above its 50-day simple moving average on 5/27/10 thereby turning bullish again. Absolute price of IWD crossed above its 200-day simple moving average on 5/27/10 and remains neutral.

Growth Stock/Value Stock Relative Strength Ratio (IWF/IWD) crossed below both its 50- and 200-day simple moving averages on 5/27/10 thereby turning bearish again. Absolute price of IWF remains neutral.

The S&P 500 Equally Weighted ETF Relative Strength Ratio (RSP/SPY) rose to challenge its highs on 5/27/10 and remains bullish. Absolute price of RSP tested its 200-day SMA on 5/25/10 and closed above it.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below the lows of the previous 22 months on 5/27/10 and remains bearish. Absolute price of OEX remains neutral.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) remains bullish. Absolute price of IWM tested its 200-day SMA on 5/25/10 and closed above it.

The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose to challenge its highs on 5/27/10 and remains bullish. Absolute price of MDY tested its 200-day SMA on 5/25/10 and closed above it.

Crude Oil nearest futures contract price broke out above 6-day highs on 5/27/10. Oil looks due for an oversold bounce. Support 67.15 and 65.05. Resistance 77.74, 78.81, 81.29, 87.15, 90.51, 98.65, and 102.84.

Gold nearest futures contract price appears to be consolidating gains following a big 7-week price run-up to a new all-time high at 1249.7 on 5/14/10. Support 1156.2, 1124.3, 1084.8, 1045.2, 1026.9 and 989.3. Resistance: 1249.7.

Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) fell below 2-month lows and both 50 & 200 SMAs on 5/20/10 and remains bearish. Absolute price fell below 3-week lows on 5/20/10 and is neutral.

Silver/Gold Ratio turned bearish on 5/17/10 when it crossed below both 50- and 200-day SMAs, with the 50-day SMA below the 200-day SMA.

Copper nearest futures price broke out above 6-day highs on 5/27/10. Copper looks due for an oversold bounce. Copper found support above its February lows and could resume its longer-term uptrend. Strength in Copper suggests renewed hope about prospects for the world economy, while weakness suggests doubts. Support 2.9 and 2.811. Resistance 3.2675, 3.3225, 3.795 and 4.27.

U.S. Treasury Bond nearest futures contract price suffered a minor breakdown on 5/27/10 which might signal a correction. Support 119.26, 118.24, 118.12, 115.15, 114.06. 113.04 and 112.15. Resistance 130.31.

Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) has been moving with the stock market and remains neutral.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell below 6-month lows on 5/20/10 but still remains neutral for the intermediate-term trend. This implies that investors are choosing somewhat less inflation protection. Absolute price of TIP remains bullish.

The U.S. dollar nearest futures contract price appears to have hit resistance near its 87.625 high set on 05/19/10, which followed a big 5-week price run-up. USD main trend remains bullish. Support 85.325, 83.07, 81.74, 80.14, 79.73, 79.61, 78.83, 78.20, 76.74 and 75.90. Resistance 87.625, 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 39.3% Bulls versus 29.2% Bears as of 5/26/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio fell to 1.35, down from 1.77 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 rose to a 14-month high of 48.20 on 5/21/10. A high and 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 rose to a 14-month high of 48.89 on 5/21/10. A high and rising VIX 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) absolute price tested its low of 2/5/10 and closed higher on 5/25/10. SPX rose strongly above 4-day highs on 5/27/10. This week, SPX turn up from a deeply oversold position and previous support, suggesting that bargain hunting demand appeared where it should have, technically speaking. Support 1040.78, 1029.38, 1019.95, 1012.42, and 1008.55. Resistance 1173.57, 1219.80, 1220.03 and 1228.74.

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

S&P 500 Cash Index Potential Support
1040.78, low of 5/25/2010
1029.38, low of 11/2/2009
1019.95, low of 10/2/2009
1012.42, Gann 37.5% of 2009-2010 range
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

9.22% Russia MV, RSX
8.38% Italy Index, EWI
7.38% Austria Index, EWO
7.33% Spain Index, EWP
7.19% France Index, EWQ
7.09% EMU Europe Index, EZU
6.86% Australia Index, EWA
6.76% Belgium Index, EWK
6.57% Sweden Index, EWD
6.56% European VIPERs, VGK
6.46% South Korea Index, EWY
6.43% Netherlands Index, EWN
6.33% United Kingdom Index, EWU
6.27% South Africa Index, EZA
6.22% Europe 350 S&P Index, IEV
6.12% Brazil Index, EWZ
6.05% Emerging Markets, EEM
5.99% Turkey MSCI iS, TUR
5.96% Germany Index, EWG
5.94% Pacific ex-Japan, EPP
5.93% WilderHill Clean Energy PS, PBW
5.93% Metals & Mining SPDR, XME
5.84% Value EAFE MSCI, EFV
5.78% Emerging VIPERs, VWO
5.69% Small Cap EAFE MSCI iS, SCZ
5.68% EAFE Index, EFA
5.65% Latin Am 40, ILF
5.64% Realty Cohen & Steers, ICF
5.56% Global ex US ACWI iS, ACWX
5.55% REIT Wilshire, RWR
5.49% REIT VIPERs, VNQ
5.48% Energy Global, IXC
5.48% Indonesia MV, IDX
5.47% China LargeCap Growth G D H USX PS, PGJ
5.43% Real Estate US DJ, IYR
5.29% Growth EAFE MSCI, EFG
5.28% Oil, Crude, U.S. Oil Fund, USO
5.14% Basic Materials DJ US, IYM
5.14% India PS, PIN
5.10% Emerging 50 BLDRS, ADRE
5.05% Mexico Index, EWW
5.04% India Earnings WTree, EPI
4.84% Value SmallCap S&P 600, RZV
4.77% China 25 iS, FXI
4.75% Global 100, IOO
4.67% Malaysia Index, EWM
4.66% Microcap Russell, IWC
4.64% Switzerland Index, EWL
4.63% Value SmallCap Russell 2000, IWN
4.55% Natural Resource iS GS, IGE
4.53% Financial SPDR, XLF
4.52% Dividend International, PID
4.49% Semiconductor iS GS, IGW
4.47% Financials VIPERs, VFH
4.46% Semiconductor SPDR, XSD
4.38% Value SmallCap VIPERS, VBR
4.33% Hong Kong Index, EWH
4.30% SmallCap Russell 2000, IWM
4.30% Value MidCap Russell, IWS
4.28% Financial DJ US, IYF
4.24% Energy SPDR, XLE
4.22% Value SmallCap S&P 600 B, IJS
4.22% Water Resources, PHO
4.18% Energy VIPERs, VDE
4.08% Small Cap VIPERs, VB
4.07% Energy DJ, IYE
4.07% Taiwan Index, EWT
4.01% Singapore Index, EWS
4.01% Growth SmallCap R 2000, IWO
3.98% SmallCap S&P 600, IJR
3.98% Financial Services DJ, IYG
3.97% MidCap Russell, IWR
3.95% Materials SPDR, XLB
3.93% Growth SmallCap VIPERs, VBK
3.87% Networking, IGN
3.82% MidCap S&P 400 SPDRs, MDY
3.81% Homebuilders SPDR, XHB
3.81% Value MidCap S&P 400 B, IJJ
3.81% MidCap S&P 400 iS, IJH
3.80% Growth BARRA Small Cap 600, IJT
3.80% Technology DJ US, IYW
3.79% Growth MidCap Russell, IWP
3.79% Growth MidCap 400 B, IJK
3.78% Growth LargeCap NASDAQ 100, QQQQ
3.72% LargeCap Blend S&P=Weight R, RSP
3.72% Value 1000 Russell, IWD
3.72% Pacific VIPERs, VPL
3.70% Info Tech VIPERs, VGT
3.64% Capital Markets KWB ST, KCE
3.63% Thailand MSCI iS, THD
3.61% Canada Index, EWC
3.59% Consumer Discretionary SPDR, XLY
3.55% LargeCap Blend Russell 3000, IWV
3.50% Blend Total Market VIPERs, VTI
3.41% Technology SPDR, XLK
3.41% S&P 500 iS LargeCap Blend, IVV
3.39% LargeCap 1000 R, IWB
3.39% Growth S&P 500/BARRA, IVW
3.39% Value VIPERs, VTV
3.38% Industrial SPDR, XLI
3.37% Value S&P 500 B, IVE
3.36% LargeCap VIPERs, VV
3.35% S&P 500 SPDRs LargeCap Blend, SPY
3.22% LargeCap Blend S&P 100, OEF
3.21% Transportation Av DJ, IYT
3.19% Growth VIPERs, VUG
3.18% Telecom DJ US, IYZ
3.17% Chile MSCI iS, ECH
3.09% Dividend DJ Select, DVY
3.05% DIAMONDS (DJIA), DIA
3.05% Growth 1000 Russell, IWF
3.04% Value LargeCap Dynamic PS, PWV
2.93% Commodity Tracking, DBC
2.76% Dividend SPDR, SDY
2.70% Dividend Appreciation Vipers, VIG
2.57% Dividend High Yield Equity PS, PEY
2.54% Biotech SPDR, XBI
2.44% Japan Index, EWJ
2.14% Silver Trust iS, SLV
2.04% Consumer Staples SPDR, XLP
2.04% Health Care SPDR, XLV
2.02% Utilities VIPERs, VPU
1.95% Financial Preferred, PGF
1.92% Utilities SPDR, XLU
1.61% Preferred Stock iS, PFF
1.38% Bond, High-Yield Corporate, HYG
1.10% Agriculture DB PS, DBA
0.63% Bond EmrgMkt JPM iS, EMB
0.57% Bond Ex-US Treas, BWX
0.19% Gold Shares S.T., GLD
-0.07% Bond, 1-3 Year Treasury, SHY
-0.18% Bond Muni ATM-Free S&P iS, MUB
-0.24% Bond, Aggregate, AGG
-0.37% Bond, TIPS, TIP
-0.52% Bond, Corp, LQD
-0.95% Bond, 10 Year Treasury, IEF
-2.27% Bond, 20+ Years Treasury, TLT