The S&P 500 Composite (SPX, 1,308.87) fell 8.85 points or 0.67% on Thursday, July 14, 2011. SPX closed below its widely-watched 50-day SMA.

Price momentum indicators (such as the popular RSI 14) still show bearish divergence after registering an overbought condition on 7/7/11. I take that as a warning of downside risk.

Trading volume on the NYSE rose 7% above the previous day’s pace, confirming the price downtrend. Still, volume was 3% below its trailing 200-day SMA. Rising volume confirms the price direction, while low and falling volume indicate relatively poor demand for stocks and raises doubts about the significance of any rally attempt.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) suddenly reversed to the downside on 7/14/11–this just after IWM/SPY rose above the highs of the previous 3 months on 7/13/11. Although IWM/SPY appears uncertain about the short term, longer term the trend remains bullish.

Crude Oil reversed again, this time to the downside. Oil has been trading choppy/sideways. Too many reversals make Oil a risky market to trade at this time.

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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
9.15% , MBI , MBIA
1.63% , COP , CONOCOPHILLIPS
2.26% , LLY , ELI LILLY
2.61% , MZZ , Short 200% MidCap 400 PS, MZZ
0.44% , NI , NISOURCE
1.22% , PSQ , Short 100% QQQ, PSQ
1.84% , JPM , J P MORGAN CHASE
1.84% , CI , CIGNA
1.30% , GIS , GENERAL MILLS
1.23% , TAP , ADOLPH COORS STK B, TAP
1.08% , WMB , WILLIAMS
0.97% , DELL , DELL
1.42% , YUM , YUM BRANDS
1.42% , SNI , Scripps Networks Interactive
0.42% , DOG , Short 100% Dow 30, DOG
0.95% , DXD , Short 200% Dow 30 PS, DXD
0.65% , JWN , NORDSTROM
0.22% , SIRI , Sirius Satellite
1.04% , UNH , UNITEDHEALTH GRP
0.39% , ECH , Chile MSCI iS, ECH
1.26% , SDS , Short 200% S&P 500 PS, SDS
0.38% , OXY , OCCIDENTAL
1.83% , NCR , NCR
0.37% , MDT , MEDTRONIC
0.36% , SLE , SARA LEE
2.31% , QID , Short 200% QQQ PS, QID
0.55% , SWY , SAFEWAY
0.48% , GPS , GAP
1.04% , GT , GOODYEAR TIRE
0.21% , PPH , Pharmaceutical H, PPH
0.78% , MRK , MERCK & CO
0.32% , AZO , AUTOZONE
1.55% , WYNN , Wynn Resorts L

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.92% , JKK , Growth SmallCap iS M, JKK
-1.04% , RPG , Growth S&P 500, RPG
-6.60% , MAR , MARRIOTT INTL STK A
-4.17% , COF , CAPITAL ONE FNCL
-5.73% , BBY , BEST BUY
-1.31% , IJK , Growth MidCap 400 B, IJK
-3.97% , BHH , Internet B2B H, BHH
-1.45% , PSI , Semiconductors, PSI
-5.40% , NYT , NY TIMES STK A
-3.96% , RSH , RADIOSHACK
-3.78% , PGR , PROGRESSIVE OHIO
-1.29% , PXE , Energy Exploration & Prod, PXE
-3.63% , CIEN.O , CIENA
-2.25% , MAS , MASCO
-2.84% , JNS , JANUS CAPITAL
-1.10% , PNW , PINNACLE WEST
-3.35% , ROK , ROCKWELL AUTOMAT
-3.53% , ZION , ZIONS
-1.15% , PWC , LargeCap Blend Dynamic PS, PWC
-2.16% , HOT , STARWOOD HOTELS
-2.22% , S , SPRINT NEXTEL
-1.66% , IJR , SmallCap S&P 600, IJR
-0.74% , PRF , Value LargeCap Fundamental RAFI 1000, PRF
-1.63% , IGV , Software, IGV
-3.96% , NVDA , NVIDIA
-0.80% , IVW , Growth S&P 500/BARRA, IVW
-0.85% , VFH , Financials VIPERs, VFH
-2.16% , PLL , PALL
-2.97% , SVU , SUPERVALU
-1.64% , PZI , Micro Cap Zachs, PZI
-1.44% , PXN , Nanotech Lux, PXN
-0.67% , IVE , Value S&P 500 B, IVE
-5.03% , MTG , MGIC INVESTMENT
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ranked in order of long-term relative strength
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell further below 7-week lows on 7/12/11 after trading with a bearish bias since peaking on 10/14/10. The Ratio remains below the 200-day SMA, below the 50-day SMA, and the 50-day SMA remains below the 200-day SMA. Absolute price broke down below 14-week lows on 6/23/11.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell further below 4-month lows on 7/12/11. The Ratio has been trading with a bearish bias since peaking on 11/27/07, so this is a major long-term bearish trend. The Ratio remains below the 200-day SMA, below the 50-day SMA, and the 50-day SMA remains below the 200-day SMA. Absolute price broke down below 14-week lows on 6/23/11.

NASDAQ Composite/S&P 500 Relative Strength Ratio has been fluctuating neutral/sideways since peaking on 1/18/11. Long term, the trend remains bullish. Absolute price rose to test its yearly highs on 7/7/11 but failed and turned down.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) rose above the highs of the previous 10 weeks on 7/14/11, suggesting a minor recovery. But OEX/SPX fell below 28-year lows on 5/26/11, confirming its preexisting bearish long-term major trend.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) suddenly reversed to the downside on 7/14/11–this just after IWM/SPY rose above the highs of the previous 3 months on 7/13/11. Although IWM/SPY appears uncertain about the short term, longer term the trend remains bullish.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) has been fluctuating neutral/sideways since peaking on 4/5/11. Long term, the trend remains bullish.

Crude Oil nearest futures contract price reversed again, this time to the downside. Oil has been trading choppy/sideways. Too many reversals make Oil a risky market to trade at this time. Support 93.55, 93.45, 87.09, 83.85, 83.55, 80.28, 80.06, 79.84, 79.25, 78.86, 73.52, 72.63, 70.76, 70.35, 69.51, 68.59, 67.15, 65.05, and 64.24. Resistance 99.42, 103.39, 104.60, 105.16, 114.83, 115.27, 120.42, 130.0, and 147.27.

Gold nearest futures contract price rose above previous all-time price highs on 7/14/11, confirming a major long-term uptrend. Support: 1478.3, 1462.5, 1445.0, 1411.5, 1380.7, 1419.5, 1351.4, 1309.1, 1307.7, 1297.0, 1274.8, 1270.5, 1232.4, 1210.9, 1191.5, and 1155.6. Resistance: none.

Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) has bounced moderately in recent weeks after falling below 27-month lows on 6/17/11. The Ratio is still down substantially since its peak on 4/8/11, and the main trend remains bearish. GDX has established a clear bearish divergence relative to GLD, and that normally should be taken as a warning about prospects for GLD, Gold futures, Gold bullion, and Gold coins.

Silver nearest futures contract price rose above the highs of the previous 8 weeks on 7/14/11, suggesting a short-term minor price uptrend. Support 34.81, 33.38, 32.3, 31.695, 31.61, 30.265, 29.635, 26.30, 24.98, and 22.84. Resistance: 38.825, 39.40, 39.47, 49.82, 49.845 and 50.35.

Silver/Gold Ratio rose above the highs of the previous 5 weeks on 7/14/11, confirming a short-term minor uptrend. The Ratio entered a steep downtrend since the peak on 4/28/11 and fell below the lows of the previous 4 months in 6/27/11, reconfirming a more significant downtrend for the medium term.

Copper nearest futures contract price consolidated recent price gains. Strength in Copper suggests confidence in the economic outlook, while Weakness suggests doubts about the future. Support 4.3145, 4.0505, 4.0240, 3.9505, 3.8725, 3.8535, 3.846, 3.6065, 3.3930, 3.1775, 2.9285, 2.8555, 2.8445, and 2.72. Resistance: 4.4565, 4.533, 4.554, 4.6350, 4.6495, 4.6535, and 4.6575.

U.S. Treasury Bond nearest futures contract price fell below the lows of the previous 2 trading days on 7/14/11, suggesting a short-term minor price pullback. Technically, larger trends still appear bullish. Support 122.05, 120.20, 119.15, 117.28, 117.04, 116.26, 115.15, 114.06, 113.04, and 112.15. Resistance 127.15, 127.19, 128.00 129.14, 129.27, 132.26, 133.00, 135.12, 135.19, 136.31, 137.31, and 142.31.

Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) fell below the lows of the previous 2 weeks on 7/12/11, confirming a minor downtrend. JNK/LQD broke down below 9-month lows on 6/16/11, confirming a major downtrend.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell below the lows of the previous 7 trading days on 7/11/11, and the Ratio fell below the lows of the previous 6 months on 6/20/11. This downtrend means that fixed-income investors prefer the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs.

The U.S. dollar nearest futures contract price fell below the lows of the previous 5 trading days on 7/14/11, suggesting a short-term minor price pullback. USD rose above the highs of the previous 16 weeks on 7/12/11, reconfirming a more significant, medium-term rally attempt. Longer term, USD has stabilized since making a low at 73.325 on 5/2/11. That stabilization appears to be base building for a more significant upside reversal. Support 74.505, 73.88, 73.515, 73.325, 72.86, and 70.80. Resistance 77.175, 77.675, 78.98, 79.34, 81.635, 81.935, 82.02, 83.64, 84.73, 85.36, 86.71, 88.80, 89.22, 89.71, and 92.53.

Advisory Service Sentiment: There were 44.1% Bulls versus 22.6% Bears as of 7/13/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio rose to 1.95, which suggests moderate bullish complacency when compared to 20-year range of 0.41 to 3.74, a median of 1.56, and a mean of 1.64.

VIX Fear Index collapsed below the lows of the previous 8-weeks, plunging to 15.12 intraday on 7/1/11, in a surprisingly rapid swing 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 Dow Theory signaled a 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.

As of the close on June 6, 2011, the Dow Theory confirmed a Secondary Reaction (a significant downside correction) for the general stock market, as the Dow Industrials and Transports both closed below 10-week lows. Previously, as of June 1, 2011, the Dow Theory gave a warning of a significant downside correction for the general stock market, as the Dow Industrials and Transports both closed below 5-week lows.

As of the close on July 1, 2011, the Dow Theory suggested a divergence and non-confirmation as the Dow-Jones Transportation Average closed above all previous closing price highs but the Dow-Jones Industrial Average failed to confirm. The Dow Industrials currently suggest nothing more than an insignificant Minor Ripple.

On 5/2/11, when the S&P 500 Composite (SPX) was 1,358.59, I warned, “The majority of major stock price indexes opened higher on gaps but reversed to close with losses on the day. This may signal exhaustion of the short-term uptrend. Sentiment indicators have been suggesting that the stock market may be over loved and overbought. And in view of the sharp reversals in the metal commodities, the so-called “inflation trade”, when speculators buy stocks and sell fixed-income instruments based on expectations of rising price levels for goods and services, may be on thin ice.”

Based on the daily SPX, momentum indicators gave bearish divergence warnings in April; that is, they never made it back to their February peaks when the price indexes rose to higher highs.

The S&P 500 Composite (SPX, 1,308.87) fell 8.85 points or 0.67% on Thursday, July 14, 2011. SPX closed below its widely-watched 50-day SMA.

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
1370.50, high of 5/2/11
1359.44, high of 5/10/11
1356.48, high of 7/7/11

S&P 500 Cash Index Potential Support
1258.07, low of 6/16/11
1249.05, low of 3/16/11
1246.73, high of 12/13/10
1238.81, Fibonacci 78.6% of 1,576.09 high
1235.05, high of 12/7/10
1232.85, low of 12/16/10
1228.74, Fibonacci 61.8% of 2007-2009 range
1227.08, high of 11/5/10
1173.00, low of 11/16/10
1171.70, low of 10/27/10
1166.74, low of 10/20/10
1159.71, low of 10/19/10
1,151.41, low of 10/7/10
1,131.87, low of 10/4/10
1122.79, low of 9/23/2010
1114.63, low of 9/15/2010
1110.88, low of 9/10/2010
1091.15, low of 9/7/2010
1039.70, low of 8/27/10
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
0.48% Silver Trust iS, SLV
0.46% Silver Miners Global X, SIL
0.39% Chile MSCI iS, ECH
0.30% Bond EmrgMkt JPM iS, EMB
0.26% Bond Ex-US Treas, BWX
0.26% Gold Shares S.T., GLD
0.12% Bond, High-Yield Junk, JNK
0.01% Bond Treasury Short-Term iS, SHV
-0.04% Bond, 1-3 Year Treasury, SHY
-0.05% Bond, High-Yield Corporate, HYG
-0.06% South Africa Index, EZA
-0.13% Bond Muni ATM-Free S&P iS, MUB
-0.15% Singapore Index, EWS
-0.16% Frontier Markets Guggenheim , FRN
-0.17% Financial Preferred, PGF
-0.17% Health Care SPDR, XLV
-0.23% Preferred Stock iS, PFF
-0.25% Bond, Aggregate, AGG
-0.26% India Earnings WTree, EPI
-0.29% Thailand MSCI iS, THD
-0.34% Global 100, IOO
-0.34% Energy Global, IXC
-0.35% Value LargeCap Dynamic PS, PWV
-0.38% Biotech SPDR, XBI
-0.39% Hong Kong Index, EWH
-0.39% Malaysia Index, EWM
-0.45% Consumer Staples SPDR, XLP
-0.45% Utilities SPDR, XLU
-0.47% DIAMONDS (DJIA), DIA
-0.48% India PS, PIN
-0.49% LargeCap Blend S&P 100, OEF
-0.51% United Kingdom Index, EWU
-0.54% Taiwan Index, EWT
-0.54% Utilities VIPERs, VPU
-0.56% Commodity Tracking, DBC
-0.57% Bond, 10 Year Treasury, IEF
-0.57% Value VIPERs, VTV
-0.60% Bond, TIPS, TIP
-0.60% Dividend Appreciation Vipers, VIG
-0.61% Switzerland Index, EWL
-0.61% South Korea Index, EWY
-0.62% Bond, Corp, LQD
-0.65% Energy DJ, IYE
-0.66% Energy SPDR, XLE
-0.67% Value S&P 500 B, IVE
-0.67% Value 1000 Russell, IWD
-0.67% Indonesia MV, IDX
-0.68% LargeCap VIPERs, VV
-0.68% Dividend DJ Select, DVY
-0.68% Belgium Index, EWK
-0.69% Dividend International, PID
-0.69% S&P 500 SPDRs LargeCap Blend, SPY
-0.70% S&P 500 iS LargeCap Blend, IVV
-0.70% Energy & Nat Res iS GS, IGE
-0.72% LargeCap 1000 R, IWB
-0.72% Europe 350 S&P Index, IEV
-0.72% China 25 iS, FXI
-0.72% Growth EAFE MSCI, EFG
-0.73% China LargeCap Growth G D H USX PS, PGJ
-0.73% Financial SPDR, XLF
-0.74% Canada Index, EWC
-0.74% Germany Index, EWG
-0.75% Small Cap EAFE MSCI iS, SCZ
-0.75% Energy VIPERs, VDE
-0.75% EMU Europe Index, EZU
-0.76% Consumer Discretionary SPDR, XLY
-0.79% Mexico Index, EWW
-0.79% Financial Services DJ, IYG
-0.79% Dividend High Yield Equity PS, PEY
-0.80% Global ex US ACWI iS, ACWX
-0.80% LargeCap Blend Russell 3000, IWV
-0.80% Growth S&P 500/BARRA, IVW
-0.83% Dividend SPDR, SDY
-0.84% Homebuilders SPDR, XHB
-0.84% Netherlands Index, EWN
-0.85% Blend Total Market VIPERs, VTI
-0.85% Technology SPDR, XLK
-0.85% Financials VIPERs, VFH
-0.85% Russia MV, RSX
-0.87% Growth 1000 Russell, IWF
-0.87% EAFE Index, EFA
-0.88% European VIPERs, VGK
-0.88% Financial DJ US, IYF
-0.89% Growth VIPERs, VUG
-0.90% Emerging VIPERs, VWO
-0.93% REIT VIPERs, VNQ
-0.94% Japan Index, EWJ
-0.94% France Index, EWQ
-0.95% Realty Cohen & Steers, ICF
-0.95% Pacific VIPERs, VPL
-0.95% Value EAFE MSCI, EFV
-0.96% Materials SPDR, XLB
-0.97% Emerging 50 BLDRS, ADRE
-0.97% Spain Index, EWP
-0.98% Info Tech VIPERs, VGT
-1.00% REIT Wilshire, RWR
-1.01% Italy Index, EWI
-1.01% LargeCap Blend S&P=Weight R, RSP
-1.03% Technology DJ US, IYW
-1.03% Pacific ex-Japan, EPP
-1.06% MidCap Russell, IWR
-1.07% Capital Markets KWB ST, KCE
-1.07% Emerging Markets, EEM
-1.08% Value MidCap Russell, IWS
-1.08% Basic Materials DJ US, IYM
-1.08% Industrial SPDR, XLI
-1.11% Real Estate US DJ, IYR
-1.11% Agriculture DB PS, DBA
-1.15% Growth MidCap Russell, IWP
-1.16% Semiconductor SPDR, XSD
-1.16% QQQ Nasdaq 100 Trust, QQQ
-1.19% Transportation Av DJ, IYT
-1.21% Austria Index, EWO
-1.25% Latin Am 40, ILF
-1.28% Value MidCap S&P 400 B, IJJ
-1.30% Australia Index, EWA
-1.31% Growth MidCap 400 B, IJK
-1.33% MidCap S&P 400 SPDRs, MDY
-1.36% Microcap Russell, IWC
-1.37% MidCap S&P 400 iS, IJH
-1.41% Value SmallCap VIPERS, VBR
-1.43% Bond, 20+ Years Treasury, TLT
-1.46% Small Cap VIPERs, VB
-1.48% Semiconductor iS IGW, SOXX
-1.52% Turkey MSCI iS, TUR
-1.54% Value SmallCap S&P 600 B, IJS
-1.54% Brazil Index, EWZ
-1.56% Value SmallCap Russell 2000, IWN
-1.58% Growth SmallCap VIPERs, VBK
-1.59% SmallCap Russell 2000, IWM
-1.59% Water Resources, PHO
-1.61% Growth SmallCap R 2000, IWO
-1.65% Telecom DJ US, IYZ
-1.66% SmallCap S&P 600, IJR
-1.68% Growth BARRA Small Cap 600, IJT
-1.69% Oil Fund PowerShares, DBO
-1.74% WilderHill Clean Energy PS, PBW
-1.78% Networking, IGN
-1.88% Sweden Index, EWD
-2.09% Oil, Crude, U.S. Oil Fund, USO
-2.45% Metals & Mining SPDR, XME