Consumer Discretionary (XLY) Stock Sector Relative Strength Ratio (XLY/SPY) rose above 4-week highs on 5/25/10 and remains bullish. Absolute price of XLY remains above its 200-day SMA.

Industrial (XLI) Stock Sector absolute price tested its 200-day SMA on 5/25/10 and closed above it.

Technology (XLK) Stock Sector absolute price held above its previous May low on 5/25/10.

Consumer Staples (XLP) Stock Sector absolute price held above its previous May low on 5/25/10.

Financial (XLF) Stock Sector absolute price fell below its 2-month lows 5/25/10.

Energy (XLE) Stock Sector absolute price fell below its 8-month lows on 5/25/10. XLE Relative Strength Ratio remains bearish.

Emerging Markets Stocks ETF (EEM) absolute price fell to a 8-month low on 5/25/10. EEM Relative Strength Ratio remains bearish.

Foreign Stocks ETF (EFA) absolute price a fell below 10-month lows on 5/25/10 and remains bearish. EFA Relative Strength Ratio remains bearish.

NASDAQ Composite absolute price held above its low of 2/5/10.

The S&P 500 Equally Weighted ETF, the Small Cap Russell 2000 Index, and the S&P MidCap 400 absolute prices tested 200-day SMAs on 5/25/10 and closed above them.

U.S. Treasury Bond nearest futures contract price jumped up to a new 13-month high of 126.15 on 5/25/10 and remains bullish.

S&P 500 Composite (SPX) absolute price tested its low of 2/5/10 and closed slightly higher on 5/25/10. Although further bottom testing cannot be ruled out, holding the line and closing higher (even if only slightly) suggest that bargain hunting demand appeared where it should have, technically speaking. SPX is still looking oversold for the short term.

Sentiment is bearish. 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 may be over—or the worst of it, at least.
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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
5.60% , AZO , AUTOZONE
6.83% , NCR , NCR
5.37% , CMCSA , COMCAST HOLDINGS STK A
5.53% , GENZ , GENZYME
6.55% , ATI , ALLEGHENY TECH
1.02% , PXJ , Oil & Gas, PXJ
3.87% , KEY , KEYCORP
10.44% , S , SPRINT NEXTEL
3.19% , TJX , TJX
2.62% , LUV , SOUTHWEST AIRLS
3.47% , RF , REGIONS FINAN
3.74% , WYNN , Wynn Resorts L
3.66% , X , US STEEL CORP
2.85% , CLF , CLIFFS NATURAL RESOURCES, CLF
0.34% , PWB , Lg Cap Growth PSD, PWB
1.89% , AA , ALCOA
2.15% , LBTYA , Liberty Global Inc. (LBTYA)
4.50% , MTG , MGIC INVESTMENT
0.52% , IYZ , Telecom DJ US, IYZ
3.04% , XME , Metals & Mining SPDR, XME
3.60% , DOW , DOW CHEMICAL
2.99% , AES , AES
2.13% , NTAP , NETWK APPLIANCE
0.57% , RPG , Growth S&P 500, RPG
1.01% , PPL , PPL
2.68% , PLD , PROLOGIS TRUST
1.71% , XL , XL CAPITAL STK A
0.24% , PKB , Building & Construction, PKB
2.29% , NEM , NEWMONT MINING
0.52% , IGN , Networking, IGN
2.09% , APD , AIR PRODS & CHEM
0.25% , IXP , Telecommunications Global, IXP
3.23% , PWER , POWER ONE
2.57% , RDC , ROWAN COMPANIES
2.24% , AMZN , Amazoncom Inc
1.98% , WOR , WORTHINGTON INDS
4.29% , GS , GOLDMAN SACHS
2.23% , ODP , OFFICE DEPOT
2.67% , NVDA , NVIDIA
1.16% , ISIL , INTERSIL CORP

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.45% , EWQ , France Index, EWQ
-3.10% , LVLT , LEVEL 3 COMMUNICATIONS
-1.49% , PBJ , Food & Beverage, PBJ
-1.06% , BDH , Broadband H, BDH
-0.85% , ADRA , Asia 50 BLDRS, ADRA
-1.34% , KWT , Solar Energy MV, KWT
-3.46% , TXT , TEXTRON
-2.29% , RFMD , RF Micro Devices Inc
-1.76% , SIRI , Sirius Satellite
-0.36% , ACWX , Global ex US ACWI iS, ACWX
-2.68% , HNZ , HJ HEINZ
-3.03% , EWY , South Korea Index, EWY
-1.88% , IDX , Indonesia MV, IDX
-0.77% , IXN , Technology Global, IXN
-1.57% , CMS , CMS ENERGY
-1.80% , PUI , Utilities, PUI
-1.77% , PXN , Nanotech Lux, PXN
-1.86% , ROK , ROCKWELL AUTOMAT
-1.62% , EPI , India Earnings WTree, EPI
-2.02% , EWO , Austria Index, EWO
-2.91% , KG , KING PHARM
-0.48% , DGT , Global Titans, DGT
-2.58% , NI , NISOURCE
-2.74% , ETFC.O , E*TRADE FINANCIAL
-1.44% , AMP , Ameriprise Financial Inc.
-2.20% , CTXS , CITRIX SYSTEMS
-2.40% , BSX , BOSTON SCIENT
-1.47% , BMC.O , BMC SOFTWARE
-1.23% , PIN , India PS, PIN
-0.81% , TBH , Telebras HOLDRS, TBH
-1.67% , EWT , Taiwan Index, EWT
-3.36% , FRE , FREDDIE MAC
-2.61% , HMA , HEALTH MGMT STK A
-1.03% , IAH , Internet Architecture H, IAH
-1.53% , FPL , FPL GROUP INC
-1.73% , CVG , CONVERGYS
-0.67% , FDL , Dividend Leaders, FDL
-0.19% , EPU , Peru MSCI iS, EPU
-1.17% , XLP , Consumer Staples SPDR, XLP
-3.26% , CAR , Avis Budget Group, Inc. (CAR)

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 4-week highs on 5/25/10 and remains bullish. Absolute price of XLY remains above its 200-day SMA 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) crossed slightly below its 50-day SMA on 5/24/10 and so turned neutral, strictly speaking. Absolute price of XLI tested its 200-day SMA on 5/25/10, closed above it, 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 held above its previous May low on 5/25/10 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 and remains neutral. Absolute price of XLP held above its previous May low on 5/25/10 and 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) fell below its 2-month lows 5/20/10 and remains neutral. Absolute price of XLF fell below its 2-month lows 5/25/10 and remains 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 below 18-month lows on 4/26/10 and remains bearish. Absolute price of XLV fell below its 200-day SMA on 5/14/10 and remains neutral. Support 27.96. Resistance 30.83, 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.

Utilities (XLU) Neutral, Market Weight. The Relative Strength Ratio (XLU/SPY) rose above 2-month highs 5/20/10 and remains neutral. Absolute price of XLU fell back below its 200-day SMA on 5/18/10 and remains neutral. Support 27.44, 25.76. Resistance 30.59, 30.91, 31.64 and 32.08.

Energy (XLE) Neutral, Market Weight. The Relative Strength Ratio (XLE/SPY) fell below 7-week lows on 5/24/10 and 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.
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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 5/18/10 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 whipsawed back down slightly below its 50-day simple moving average on 5/25/10 thereby turning neutral again. Absolute price of the NASDAQ whipsawed back below its 200-day SMA on 5/24/10. NASDAQ price held above its low of 2/5/10.

Growth Stock/Value Stock Relative Strength Ratio (IWF/IWD) rose above 2-month highs on 5/24/10 and, although it is gaining strength, it remains neutral. Absolute price of IWF also remains neutral.

Russell 1000 Value ETF Relative Strength Ratio (IWD/SPY) has underperformed since 5/3/10 and remains neutral.

The S&P 500 Equally Weighted ETF Relative Strength Ratio (RSP/SPY) lost very little upside momentum in recent weeks 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 5/12/10 and remains bearish. Absolute price of OEX fell below its 200-day SMAs on 5/19/10 and 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) lost very little upside momentum in recent weeks 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 remains in a steep 3-week short-term downtrend. This trend appears oversold. Support 67.15 and 65.05. Resistance 78.81, 81.29, 87.15, 90.51, 98.65, and 102.84.

Gold nearest futures contract price pulled back after setting 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 fell below the lows of the previous 3 months on 5/17/10, again confirming a bearish trend for the short-term. Copper entered a correction phase since peaking at 3.68 on 4/12/10. Longer term, Copper remains bullish. Strength in Copper suggests renewed hope about prospects for the world economy, while weakness suggests doubts. Support 2.8525 and 2.811. Resistance 3.2675, 3.3225, 3.795 and 4.27.

U.S. Treasury Bond nearest futures contract price jumped up to a new 13-month high of 126.15 on 5/25/10 and remains bullish. Support 124.04, 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) fell below 8-month lows on 5/20/10 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 moved further above 12-month highs on 5/18/10 and remains bullish. Support 85.46, 83.07, 81.74, 80.14, 79.73, 79.61, 78.83, 78.20, 76.74 and 75.90. Resistance 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 43.8% Bulls versus 24.7% Bears as of 5/192/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio fell to 1.77, down from 1.91 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 slightly higher on 5/25/10. Although further bottom testing cannot be ruled out, holding the line and closing higher (even if only slightly) suggest that bargain hunting demand appeared where it should have, technically speaking. SPX is still looking oversold for the short term. 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

3.04% Metals & Mining SPDR, XME
1.87% Basic Materials DJ US, IYM
1.68% Materials SPDR, XLB
1.05% Real Estate US DJ, IYR
1.04% Realty Cohen & Steers, ICF
1.04% REIT Wilshire, RWR
1.02% Consumer Discretionary SPDR, XLY
0.91% Financial SPDR, XLF
0.83% Natural Resource iS GS, IGE
0.80% REIT VIPERs, VNQ
0.78% Homebuilders SPDR, XHB
0.75% Financial Services DJ, IYG
0.58% Financial DJ US, IYF
0.58% Financials VIPERs, VFH
0.52% Networking, IGN
0.52% Telecom DJ US, IYZ
0.49% Bond, 20+ Years Treasury, TLT
0.47% Capital Markets KWB ST, KCE
0.45% Gold Shares S.T., GLD
0.37% Switzerland Index, EWL
0.34% Bond, 10 Year Treasury, IEF
0.32% Semiconductor iS GS, IGW
0.28% LargeCap Blend S&P=Weight R, RSP
0.28% Canada Index, EWC
0.27% Bond Muni ATM-Free S&P iS, MUB
0.24% Value MidCap Russell, IWS
0.23% Energy DJ, IYE
0.23% Energy SPDR, XLE
0.22% Growth MidCap Russell, IWP
0.22% MidCap Russell, IWR
0.18% Value 1000 Russell, IWD
0.17% Value S&P 500 B, IVE
0.16% Semiconductor SPDR, XSD
0.15% Growth S&P 500/BARRA, IVW
0.14% LargeCap VIPERs, VV
0.13% Value SmallCap Russell 2000, IWN
0.13% Energy Global, IXC
0.13% Value VIPERs, VTV
0.12% Bond, Aggregate, AGG
0.11% Bond Ex-US Treas, BWX
0.10% S&P 500 SPDRs LargeCap Blend, SPY
0.09% Growth LargeCap NASDAQ 100, QQQQ
0.08% LargeCap 1000 R, IWB
0.08% S&P 500 iS LargeCap Blend, IVV
0.08% LargeCap Blend S&P 100, OEF
0.08% Dividend International, PID
0.08% Transportation Av DJ, IYT
0.06% LargeCap Blend Russell 3000, IWV
0.02% Value SmallCap VIPERS, VBR
0.01% Growth VIPERs, VUG
0.00% Blend Total Market VIPERs, VTI
0.00% Energy VIPERs, VDE
0.00% Spain Index, EWP
-0.01% Bond, 1-3 Year Treasury, SHY
-0.02% SmallCap Russell 2000, IWM
-0.03% Value MidCap S&P 400 B, IJJ
-0.04% Growth 1000 Russell, IWF
-0.05% European VIPERs, VGK
-0.07% Industrial SPDR, XLI
-0.07% Microcap Russell, IWC
-0.10% Growth MidCap 400 B, IJK
-0.10% Growth SmallCap R 2000, IWO
-0.11% Silver Trust iS, SLV
-0.12% Bond, High-Yield Corporate, HYG
-0.14% Hong Kong Index, EWH
-0.15% United Kingdom Index, EWU
-0.15% Technology DJ US, IYW
-0.16% MidCap S&P 400 SPDRs, MDY
-0.16% Europe 350 S&P Index, IEV
-0.16% Dividend Appreciation Vipers, VIG
-0.16% MidCap S&P 400 iS, IJH
-0.17% Global 100, IOO
-0.18% Growth SmallCap VIPERs, VBK
-0.18% Value LargeCap Dynamic PS, PWV
-0.19% Biotech SPDR, XBI
-0.19% Info Tech VIPERs, VGT
-0.19% SmallCap S&P 600, IJR
-0.20% Small Cap VIPERs, VB
-0.20% Growth BARRA Small Cap 600, IJT
-0.22% DIAMONDS (DJIA), DIA
-0.23% Value SmallCap S&P 600 B, IJS
-0.28% Mexico Index, EWW
-0.28% Technology SPDR, XLK
-0.30% Value EAFE MSCI, EFV
-0.31% Water Resources, PHO
-0.33% Bond, TIPS, TIP
-0.34% South Africa Index, EZA
-0.36% Global ex US ACWI iS, ACWX
-0.37% Latin Am 40, ILF
-0.37% Dividend DJ Select, DVY
-0.37% Growth EAFE MSCI, EFG
-0.40% EAFE Index, EFA
-0.42% Health Care SPDR, XLV
-0.42% Agriculture DB PS, DBA
-0.43% Italy Index, EWI
-0.43% Dividend SPDR, SDY
-0.45% France Index, EWQ
-0.48% Bond, Corp, LQD
-0.53% Utilities SPDR, XLU
-0.54% Belgium Index, EWK
-0.54% EMU Europe Index, EZU
-0.58% Pacific VIPERs, VPL
-0.62% Japan Index, EWJ
-0.63% Preferred Stock iS, PFF
-0.65% Utilities VIPERs, VPU
-0.70% Emerging 50 BLDRS, ADRE
-0.76% Value SmallCap S&P 600, RZV
-0.76% Dividend High Yield Equity PS, PEY
-0.78% Australia Index, EWA
-0.79% Commodity Tracking, DBC
-0.81% Financial Preferred, PGF
-0.82% Bond EmrgMkt JPM iS, EMB
-0.83% Brazil Index, EWZ
-0.83% Pacific ex-Japan, EPP
-0.86% Sweden Index, EWD
-0.92% Emerging VIPERs, VWO
-0.96% Germany Index, EWG
-0.98% Netherlands Index, EWN
-0.99% Oil, Crude, U.S. Oil Fund, USO
-1.01% Singapore Index, EWS
-1.05% Small Cap EAFE MSCI iS, SCZ
-1.08% Emerging Markets, EEM
-1.13% Thailand MSCI iS, THD
-1.17% Consumer Staples SPDR, XLP
-1.20% China 25 iS, FXI
-1.23% India PS, PIN
-1.54% WilderHill Clean Energy PS, PBW
-1.55% Malaysia Index, EWM
-1.62% India Earnings WTree, EPI
-1.67% Taiwan Index, EWT
-1.73% Turkey MSCI iS, TUR
-1.88% Indonesia MV, IDX
-1.91% Chile MSCI iS, ECH
-1.92% China LargeCap Growth G D H USX PS, PGJ
-2.02% Austria Index, EWO
-3.03% South Korea Index, EWY
-3.15% Russia MV, RSX