Highlights based on trading on Friday, May 11, 2012:

The S&P 500 (SPX: 1,353.39) fell 4.60 points or 0.34% on Friday to its lowest closing price in 9 weeks, since 3/7/12.

NYSE trading volume rose 4% on Friday. Volume has been increasing when stock prices decline and decreasing when stock prices advance, suggesting that selling pressure is greater than buying pressure.

Volume is showing a bearish divergence versus price. The Cumulative Line of NYSE Volume of Advancing Stocks minus NYSE Volume of Declining Stocks broke down below its March lows, while SPX held above its March lows. The same holds true for On Balance Volume.

Since peaking at 1422.38 intraday on 4/2/12, SPX has made a lower high and a lower low, which is the very definition of a downtrend. SPX also broken down below any and all up trendlines that can be drawn since the low on 10/4/11.

SPX remained below its 50-day SMA all last week, after breaking down below it on Friday, 5/4/12. SPX has lost 4.62% from its high of 1,419.04 on 4/2/12, based on closing prices.

Popular momentum indicators based on the SPX daily close price have been relatively weak and are trending down bearishly. RSI(14), now at 38.08, has been relatively bearish since it closed at 75.38 on 2/9/12. Stochastic(14,3,3) fell to 16.89, down from 90.04 on 4/30/12. MACD(12,26,9) fell to -6.38, is below its Signal Line, and is down from 19.08 on 2/9/12.

With all up trendlines and the 50-day SMA now broken, probabilities appear to favor further downside risk.

The Reward to Risk Ratio for the stock market remains unattractive.

The following ETFs, ranked by Relative Strength, with the weakest at the bottom of the list, closed below their closing price lows of the previous 13 weeks:

LargeCap Value S&P 500 iS, IVE
Global LargeCap Blend MSCI iS, ACWI
Global 100, IOO
South Korea Index, EWY
Switzerland Index, EWL
Dividend International, PID
South Africa Index, EZA
Hong Kong Index, EWH
Materials SPDR, XLB
Growth EAFE MSCI, EFG
Gold Shares S.T., GLD
Pacific ex-Japan, EPP
Capital Markets KWB ST, KCE
Energy DJ, IYE
Energy SPDR, XLE
Energy VIPERs, VDE
Oil Fund PowerShares, DBO
Basic Materials DJ US, IYM
Foreign LargeCap EAFE MSCI iS, EFA
Pacific VIPERs, VPL
Oil, Crude, U.S. Oil Fund, USO
Taiwan Index, EWT
Commodity Tracking, DBC
Japan Index, EWJ
Emerging Markets MSCI iS, EEM
Emerging VIPERs, VWO
Value EAFE MSCI, EFV
Emerging 50 BLDRS, ADRE
Latin Am 40, ILF
China 25 iS, FXI
Energy & Nat Res iS GS, IGE
China LargeCap Growth G D H USX PS, PGJ
Networking, IGN
Agriculture DB PS, DBA
Silver Trust iS, SLV
Brazil Index, EWZ
India PS, PIN
India Earnings WTree, EPI
Metals & Mining SPDR, XME
WilderHill Clean Energy PS, PBW
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Equity Mutual Funds lost 6% in 2011, according to Lipper Research Services.
Hedge funds lost 5%, according to COO Connect.
Hedge funds suffered their second-worst year on record in 2011, according to an index maintained by Eurekahedge, an independent research firm that specializes in hedge fund data. Some of the world’s largest and best-known hedge funds suffered huge losses, down 20% to 50%.

But not all money managers were down in 2011; see:
Robert W. Colby Asset Management, Inc. (click here).
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9 major U.S. stock sectors ranked in order of long-term relative strength:
Full report available by subscription only (click here).
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Sentiment for Contrary Thinking

Investor sentiment data indicated alarming degrees of optimism and bullish complacency at the 2012 market highs. That is bearish because when the majority of investors has been bullish for some time, investors are already fully invested in the market. Once everyone who is going to buy has already bought, stocks are vulnerable to a downside shakeout. The pendulum of emotion tends to swing too far in one direction, but market mood always reverts to the mean. Some of the most recent data suggests that investors’ sentiment may be beginning to shift away from bullish complacency.

AAII Sentiment: There were 51.64% Bulls and 20.19% Bears, according to the AAII weekly survey reported on 2/9/12. This was the highest level of bullish sentiment in more than a year, since 52.34% Bulls on 1/13/11. As of 5/10/12, however, sentiment had reversed, with only 25.40% Bulls and 42.06% Bears.

Investors Intelligence Sentiment: according to the Investors Intelligence weekly survey of stock market newsletter advisors, there were 54.8% Bulls reported on 2/15/11, the highest since the stock market top in May, 2011. On 5/9/12, there were only 20.4% Bears, the lowest level since 6/1/11. This is still suggesting too many bulls.

VIX Fear Index rose to an intraday peak of 21.59 on 5/9/12, the highest level since 2/16/12, suggesting the beginning of a shift toward skepticism from bullish complacency. VIX fell to 13.66 intraday on 3/16/12, its lowest level since 6/20/07, and down from a peak of 48.00 on 8/8/11. That large drop indicated a shift away from fear to bullish complacency. 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.

The S&P 500 Composite 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
1422.38, high of 4/2/2012
1415.32, high of 5/1/2012
1388.71, low of 5/3/2012
1385.72, 50-day SMA
1381.50, Fibonacci 78.6% of 2007-2009 range

The S&P 500 Composite Potential Support
1343.13, low of 5/9/2012
1340.34, Fibonacci 23.6% R of 2011-12 range
1340.03, low of 3/6/2012
1337.35, low of 2/10/2012
1300.49, low of 1/30/2012
1289.59, Fibonacci 38.2% R of 2011-12 range
1277.58, low of 1/13/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1277.22, 200-day SMA
1257.58, Fibonacci 61.8% of 2011 range
1248.58, Fibonacci 50.0% R of 2011-12 range
1244.80, low of 12/7/2011
1239.73, low of 12/1/2011
1238.81, Fibonacci 78.6% of 1,576.09 high
1234.81, low of 11/3/2011
1231.04, high of 12/16/2011
1226.64, low of 11/9/2011
1222.68, Fibonacci 50% of 2011 range
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1207.56, Fibonacci 61.8% R of 2011-12 range
1204.49, Fibonacci 23.6% of 2009-11 range
1202.37, low of 12/19/2011
1187.77, Fibonacci 38.2% of 2011 range
1158.66, low of 11/25/2011
1144.38, Fibonacci 23.6% of 2011 range
1101.73, Fibonacci 38.2% of 2009-11 range
1074.77, low of 10/4/2011
1149.16, Fibonacci 78.6% R of 2011-12 range
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
1018.69, Fibonacci 50% of 2009-11 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
935.64, Fibonacci 61.8% of 2009-11 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
817.40, Fibonacci 78.6% of 2009-11 range
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
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Fixed-Income Investments

Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA every day since 6/24/11. Support 117.44, 115.69, 114.82, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 120.35, 121.20, 123.05, and 123.43.

Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA every day since 6/21/11. Support 105.85, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance 106.66.

Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) could stay longer in its neutral trading range of the past 5 months.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) turned down after 3/19/12 and fell below its lows of the previous 3 months on 5/11/12. Systematically, TIP/IEF remains neutral: below its 50-day SMA, below its 200-day SMA, but the 50-day SMA has been above the 200-day SMA every day since 3/14/12.
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) closed above its closing price highs of the previous 8 weeks on 5/11/12. UUP is systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA. Support 22.14, 21.89, 21.74, 21.58, 21.07, and 20.84. Resistance 22.24, 22.47, 22.85, 23.52, 25.84, 27.19, 28.97.

CRB Commodity Price Index fell below its lows of the previous 19 months on 5/11/12, for another a bearish trend confirmation. Systematically, CRB remains bearish: below its 50-day SMA, below its 200-day SMA, and with the 50-day SMA below the 200-day SMA every day since 8/18/11.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below the lows of the previous 20 months on 5/11/12, for another a bearish trend confirmation. Systematically, DBA remains bearish, below both its 50-day SMA and 200-day SMAs, and with the 50-day SMA consistently below the 200-day SMA every day since 8/8/11.

Crude Oil, United States Oil ETF (USO) fell below its lows of the previous 4 months on 5/9/12. USO still looks bearish on the chart. Systematically, however, USO remains neutral: below its 50-day SMA, below its 200-day SMA, but the 50-day SMA has remained above the 200-day SMA consistently every day since 1/3/12. Support 35.73, 34.54, 32.52, 29.10, 26.28, and 22.74. Resistance 40.29, 41.38, 42.30, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) broke down below its lows of the previous 4 months and fell further below its 50-day and 200-day SMAs on 5/11/12. Systematically, GLD turned bearish on 4/17/12, when its 50-day SMA crossed below its 200-day SMA. Support: 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 162.18, 163.20, 164.89, 166.57, 174.00, 175.46, 177.40, and 185.85.

Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) fell below its lows of the previous 3 years on 5/8/12, thereby reconfirming a bearish major trend for the long term. Systematically, GDX/GLD remains bearish: below its 50-day and 200-day SMAs, and the 50-day SMA has remained bearishly below the 200-day SMA every day since 2/22/11.

Silver, iShares Silver Trust ETF (SLV) broke down below its lows of the previous 4 months on 5/11/12. Systematically, SLV remains bearish: below its 50-day and 200-day SMAs, and with the 50-day SMA below the 200-day SMA every day since 10/27/11. Support 25.65 and 24.44. Resistance: 30.52, 31.64, 32.34, 33.44, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71 and 48.35.

Silver/Gold ETFs Ratio (SLV/GLD) fell below its lows of the previous 4 months on 5/10/12, reconfirming a downtrend for the medium term. SLV/GLD remains below its 50-day SMA, below its 200-day SMA, and the 50-day SMA has remained bearishly below the 200-day SMA every day since 8/30/11.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below the lows of the previous 11 trading days on 5/9/12, fell below its 200-day SMA on 5/3/12, and fell below its 50-day SMA on 5/2/12. JJC remains far below its 2011 high at 61.69 and has underperformed the stock market since JJC peaked at 51.41 on 2/9/12. Given that “Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy, this weakness may be suggesting rising doubts about prospects going forward.
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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
6.41% , DDS , DILLARD STK A
6.85% , NFLX , Netflix, NFLX
8.38% , PWER , POWER ONE
6.36% , NVDA , NVIDIA
8.62% , CIEN.O , CIENA
4.07% , BBBY , BED BATH BEYOND
1.75% , XBI , Biotech SPDR, XBI
2.40% , LRCX , LAM RESEARCH CORP
1.06% , PBE , Biotech & Genome, PBE
0.54% , DXD , Short 200% Dow 30 PS, DXD
1.40% , ESRX , EXPRESS SCRIPTS
1.54% , IGT , INTL GAME TECH
3.17% , GNW , GENWORTH FINANCIAL
0.19% , IYZ , Telecom DJ US, IYZ
0.11% , PWB , Lg Cap Growth PSD, PWB
1.39% , T , AT&T Corp., T
0.62% , XSD , Semiconductor SPDR, XSD
2.09% , WHR , WHIRLPOOL
1.52% , ASH , ASHLAND
1.33% , PSI , Semiconductors, PSI
0.94% , USB , US BANCORP
1.79% , BIIB , BIOGEN IDEC
1.16% , ZION , ZIONS
0.15% , IWP , Growth MidCap Russell, IWP
0.47% , TLH , Bond 10-20 Year US Treas, TLH
0.32% , RPG , Growth S&P 500, RPG
1.50% , VZ , VERIZON COMMS
1.15% , GILD , Gilead Sciences Inc
0.27% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
0.24% , ICF , Realty Cohen & Steers, ICF
1.66% , HGSI , Human Genome Sciences Inc
0.36% , RWR , REIT Wilshire, RWR
1.63% , S , SPRINT NEXTEL

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-9.28% , JPM , J P MORGAN CHASE
-11.29% , CECO , CAREER EDUCATION CORP
-3.87% , GWW , WW GRAINGER
-3.71% , HOG , HARLEY DAVIDSON
-4.17% , MS , MORGAN STANLEY
-1.08% , AIV , APT INV MNGMT
-3.94% , GS , GOLDMAN SACHS
-4.80% , JWN , NORDSTROM
-4.58% , MBI , MBIA
-4.24% , C , CITIGROUP
-1.41% , EWW , Mexico Index, EWW
-0.72% , ITF , Japan LargeCap Blend TOPIX 150, ITF
-0.53% , EWO , Austria Index, EWO
-1.30% , NOC , NORTHROP GRUMMAN
-3.39% , APOL , APOLLO GROUP
-0.83% , RZV , Value SmallCap S&P 600, RZV
-5.70% , MTG , MGIC INVESTMENT
-1.27% , HSP , HOSPIRA
-1.62% , YHOO , YAHOO
-0.36% , JNJ , JOHNSON&JOHNSON
-0.34% , FDV , Value 40 Large Low P/E FT DB, FDV
-1.95% , BAC , BANK OF AMERICA
-2.38% , WAG , WALGREEN
-0.63% , IOO , Global 100, IOO
-2.35% , DV , DeVry, Inc.
-0.79% , RYAAY , Ryanair Holdings plc
-1.03% , WM , WASTE MANAGEMENT
-0.65% , EWQ , France Index, EWQ
-0.39% , XLG , LargeCap Rydex Rus Top 50, XLG
-1.01% , DBO , Oil Fund PowerShares, DBO
-0.48% , ADRU , Europe 100 BLDRS, ADRU
-0.24% , JKE , Growth LargeCap iS M, JKE
-2.40% , HMA , HEALTH MGMT STK A
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
1.75% Biotech SPDR, XBI
1.27% Homebuilders SPDR, XHB
0.83% Bond, 20+ Years Treasury, TLT
0.70% Semiconductor iS IGW, SOXX
0.62% Semiconductor SPDR, XSD
0.42% Real Estate US DJ, IYR
0.40% Netherlands Index, EWN
0.36% REIT Wilshire, RWR
0.33% Bond, 10 Year Treasury, IEF
0.30% Bond, Corp, LQD
0.30% Bear, Short S&P 500, SH
0.25% Bond, High-Yield Corporate, HYG
0.24% Realty Cohen & Steers, ICF
0.21% REIT VIPERs, VNQ
0.20% Bond, High-Yield Junk, JNK
0.19% Telecom DJ US, IYZ
0.17% Transportation Av DJ, IYT
0.16% Growth MidCap 400 B, IJK
0.16% Bond Muni ATM-Free S&P iS, MUB
0.16% Growth SmallCap VIPERs, VBK
0.15% Growth MidCap Russell, IWP
0.14% Germany Index, EWG
0.11% Water Resources, PHO
0.08% Technology DJ US, IYW
0.08% Utilities VIPERs, VPU
0.07% Bond, Aggregate, AGG
0.07% Technology SPDR, XLK
0.06% MidCap Russell, IWR
0.06% Utilities SPDR, XLU
0.05% Bond, TIPS, TIP
0.04% MidCap S&P 400 iS, IJH
0.03% MidCap S&P 400 SPDRs, MDY
0.01% Growth BARRA Small Cap 600, IJT
0.01% Bond, 1-3 Year Treasury, SHY
0.00% WilderHill Clean Energy PS, PBW
-0.01% Bond Treasury Short-Term iS, SHV
-0.02% QQQ Nasdaq 100 Trust, QQQ
-0.03% Chile MSCI iS, ECH
-0.03% Growth SmallCap R 2000, IWO
-0.06% Value MidCap Russell, IWS
-0.07% Growth S&P 500/BARRA, IVW
-0.07% Info Tech VIPERs, VGT
-0.07% Value MidCap S&P 400 B, IJJ
-0.08% Canada Index, EWC
-0.09% Growth 1000 Russell, IWF
-0.11% Health Care SPDR, XLV
-0.12% Bond Ex-US Treas, BWX
-0.12% LargeCap Blend S&P=Weight R, RSP
-0.13% Small Cap VIPERs, VB
-0.15% Growth VIPERs, VUG
-0.15% Networking, IGN
-0.17% Financial Preferred, PGF
-0.18% Italy Index, EWI
-0.19% Dividend Appreciation Vipers, VIG
-0.20% Industrial SPDR, XLI
-0.20% DIAMONDS (DJIA), DIA
-0.20% Consumer Discretionary SPDR, XLY
-0.21% Switzerland Index, EWL
-0.25% EMU Europe Index, EZU
-0.25% Value SmallCap VIPERS, VBR
-0.25% SmallCap Russell 2000, IWM
-0.26% Sweden Index, EWD
-0.26% Consumer Staples SPDR, XLP
-0.27% Dividend International, PID
-0.27% Blend Total Market VIPERs, VTI
-0.27% SmallCap S&P 600, IJR
-0.28% LargeCap 1000 R, IWB
-0.28% Materials SPDR, XLB
-0.29% LargeCap Blend Russell 3000, IWV
-0.29% Dividend DJ Select, DVY
-0.30% S&P 500 SPDRs LargeCap Blend, SPY
-0.31% LargeCap VIPERs, VV
-0.31% Dividend SPDR, SDY
-0.31% Bond EmrgMkt JPM iS, EMB
-0.32% Thailand MSCI iS, THD
-0.32% Capital Markets KWB ST, KCE
-0.34% S&P 500 iS LargeCap Blend, IVV
-0.34% Turkey MSCI iS, TUR
-0.34% Belgium Index, EWK
-0.35% Value LargeCap Dynamic PS, PWV
-0.36% Basic Materials DJ US, IYM
-0.36% Growth EAFE MSCI, EFG
-0.37% Value SmallCap Russell 2000, IWN
-0.39% LargeCap Blend S&P 100, OEF
-0.41% Preferred Stock iS, PFF
-0.41% Value SmallCap S&P 600 B, IJS
-0.41% Malaysia Index, EWM
-0.43% Value VIPERs, VTV
-0.47% Value 1000 Russell, IWD
-0.49% Europe 350 S&P Index, IEV
-0.49% Microcap Russell, IWC
-0.53% Austria Index, EWO
-0.56% European VIPERs, VGK
-0.56% Value S&P 500 B, IVE
-0.59% Energy DJ, IYE
-0.59% Hong Kong Index, EWH
-0.60% Silver Trust iS, SLV
-0.62% Energy Global, IXC
-0.62% EAFE Index, EFA
-0.63% China LargeCap Growth G D H USX PS, PGJ
-0.63% Global 100, IOO
-0.65% Dividend High Yield Equity PS, PEY
-0.65% United Kingdom Index, EWU
-0.65% France Index, EWQ
-0.68% Global ex US ACWI iS, ACWX
-0.69% Value EAFE MSCI, EFV
-0.69% Small Cap EAFE MSCI iS, SCZ
-0.71% Energy VIPERs, VDE
-0.72% Frontier Markets Guggenheim , FRN
-0.74% Energy SPDR, XLE
-0.74% Commodity Tracking, DBC
-0.78% Gold Shares S.T., GLD
-0.79% Financials VIPERs, VFH
-0.79% Singapore Index, EWS
-0.81% Russia MV, RSX
-0.82% Energy & Nat Res iS GS, IGE
-0.83% Indonesia MV, IDX
-0.86% Metals & Mining SPDR, XME
-0.89% Financial DJ US, IYF
-0.92% Australia Index, EWA
-0.96% Oil, Crude, U.S. Oil Fund, USO
-0.99% Emerging 50 BLDRS, ADRE
-0.99% Pacific ex-Japan, EPP
-1.00% Brazil Index, EWZ
-1.00% Pacific VIPERs, VPL
-1.01% Oil Fund PowerShares, DBO
-1.08% Japan Index, EWJ
-1.10% Latin Am 40, ILF
-1.12% Agriculture DB PS, DBA
-1.13% Financial SPDR, XLF
-1.18% Taiwan Index, EWT
-1.30% Emerging Markets, EEM
-1.30% India Earnings WTree, EPI
-1.34% China 25 iS, FXI
-1.37% Emerging VIPERs, VWO
-1.41% Mexico Index, EWW
-1.48% Financial Services DJ, IYG
-1.58% Spain Index, EWP
-1.66% South Africa Index, EZA
-1.77% South Korea Index, EWY
-1.83% India PS, PIN