Contrary Opinion: The largest Proportion of Bulls in 3 Months

Sentiment has shifted toward bullish confidence since May. According to the Investors Intelligence weekly survey of stock market newsletter advisors, there were 44.7% Bulls, which was the largest proportion in 3 months, since 4/11/12. There were 24.5% Bears, which was the lowest since 5/30/12.

Technology stock sector price whipsawed back down below its 50-day SMA.

Financial stock sector whipsawed back to systematically bullish, based on SMA crossovers. In view of repeated whipsaw SMA crossovers (false signals) in recent days, however, I am keeping my Neutral rating unchanged.

Industrial stock sector Relative Strength Ratio (XLI/SPY) plunged to a 2-year low and remains systematically bearish.

Energy stock sector Relative Strength Ratio (XLE/SPY) and absolute price both whipsawed back above 50-day SMAs, thereby turning systematically neutral again. Due to false signals this year, however, I am keeping my Bearish rating unchanged.

The S&P 500 (SPX: 1,341.45) closed down just 0.02 points or 0.00% on Wednesday, after breaking down below the lows of the previous 7 trading days, then recovering in the final 90 minutes.

NYSE volume fell 1% and remains at a relatively low level. For months, I have been noting here a general tendency for rising volume on price declines and shrinking volume on price advances. This is a divergence that suggests a bearish demand-supply balance for stocks.

Downside risk still may exceed upside potential for the stock market.

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Hedge funds and equity mutual funds both lost money last year, 2011, and some are down again this year as well.

Meanwhile, one money manager made gains for 5 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).

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Sentiment for Contrary Thinking

Investor sentiment data indicated alarming degrees of optimism and bullish complacency at the February to May 2012 market highs. That was 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, as it did during the April-June downside stock market correction. In recent weeks investors have been growing more confident again, as they usually do when stock prices bounce back.

Hulbert Stock Newsletter Sentiment Index showed that the average recommended equity exposure among a subset of the shortest-term stock market timers jumped 24 percentage points (in just one week) to 47.0% as stocks ran up to their highs of 7/3/12. That was greater bullish exposure than at the May high and “is a worrisome sign”, according to Mark Hulbert.

Corporate Insiders Are Bearish. Insiders sold 5.5 shares for each share bought. This is up from 1.6-to-1 in May and an long-term average of 2.25-to-1. This data is as of 7/6/12 and was reported by Vickers Weekly Insider Report, published by Argus Research, and Mark Hulbert.

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
1389.07, Fibonacci 78.6% of April-June 2012 range
1388.71, low of 5/3/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1374.81, high of 7/3/2012
1370.58, high of 5/2/2011
1363.49, high of 6/19/2012
1362.93, Fibonacci 61.8% of April-June 2012 range
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
1344.56, Fibonacci 50% of April-June 2012 range

The S&P 500 Composite Potential Support
1340.34, Fibonacci 23.6% of 2011-12 range
1340.03, low of 3/6/2012
1335.97, 50-day SMA
1335.52, high of 6/11/2012
1334.93, high of 5/31/2012
1329.05, high of 6/7/2012
1328.49, high of 5/22/2012
1326.19, Fibonacci 38.2% of April-June 2012 range
1306.62, low of 6/12/2012
1303.47, Fibonacci 23.6% of April-June 2012 range
1291.98, low of 5/18/2012
1289.59, Fibonacci 38.2% of 2011-12 range
1305.74, 200-day SMA
1266.74, low of 6/4/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1257.58, Fibonacci 61.8% of 2011 range
1248.58, Fibonacci 50.0% 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
1228.74, Fibonacci 61.8% of 2007-2009 range
1226.64, low of 11/9/2011
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1207.56, Fibonacci 61.8% of 2011-12 range
1202.37, low of 12/19/2011
1158.66, low of 11/25/2011
1121.44, Fibonacci 50% of 2007-2009 range
1074.77, low of 10/4/2011
1149.16, Fibonacci 78.6% R of 2011-12 range
1014.14, Fibonacci 38.2% of 2007-2009 range
1010.91, low of 7/1/2010
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
881.38, Fibonacci 23.6% of 2007-2009 range
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
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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
2.66% , NCR , NCR
2.14% , DBO , Oil Fund PowerShares, DBO
4.03% , IP , INTL PAPER
0.69% , FEU , Value LargeCap Euro STOXX 50 DJ, FEU
1.99% , EWP , Spain Index, EWP
0.63% , RPV , Value S&P 500, RPV
3.88% , FHN , First Horizon National
1.88% , NTRS , NORTHERN TRUST
0.82% , IXP , Telecommunications Global, IXP
1.40% , CTL , CENTURYTEL
1.71% , ETR , ENTERGY
1.50% , IXC , Energy Global, IXC
2.48% , WY , WEYERHAEUSER
3.04% , HPQ , HEWLETT PACKARD
0.50% , VPU , Utilities VIPERs, VPU
2.79% , APC , ANADARKO PETRO
2.57% , USO , Oil, Crude, U.S. Oil Fund, USO
1.85% , EWS , Singapore Index, EWS
1.27% , MTB , M&T BANK
2.35% , MDP , MEREDITH
1.39% , FRN , Frontier Markets Guggenheim , FRN
0.74% , THD , Thailand MSCI iS, THD
0.93% , IGE , Energy & Nat Res iS GS, IGE
2.28% , MRO , MARATHON OIL
3.57% , RDC , ROWAN COMPANIES
1.65% , COP , CONOCOPHILLIPS
1.09% , PCG , PG&E
1.20% , PXE , Energy Exploration & Prod, PXE
1.09% , MON , MONSANTO
2.58% , HP , Helmerich & Payne HP
0.70% , EFV , Value EAFE MSCI, EFV
0.67% , EIX , EDISON INTL
2.01% , BAC , BANK OF AMERICA

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.11% , FDV , Value 40 Large Low P/E FT DB, FDV
-8.37% , BBY , BEST BUY
-7.88% , CIEN.O , CIENA
-4.48% , WM , WASTE MANAGEMENT
-1.90% , XBI , Biotech SPDR, XBI
-0.71% , FPX , IPOs, First Tr IPOX-100, FPX
-3.00% , GWW , WW GRAINGER
-6.02% , ODP , OFFICE DEPOT
-4.35% , APOL , APOLLO GROUP
-3.42% , DISH , EchoStar Communications
-3.42% , RL , Polo Ralph Lauren
-1.66% , IGN , Networking, IGN
-1.80% , GILD , Gilead Sciences Inc
-1.14% , CB , CHUBB
-2.33% , PXQ , Networking, PXQ
-1.23% , PPG , PPG INDUSTRIES
-1.81% , GOOG , Google
-1.90% , COH , COACH
-1.84% , LOW , LOWES
-2.40% , CCE , COCA COLA ENTER
-2.09% , CBS , CBS CORP.
-1.97% , IGT , INTL GAME TECH
-2.80% , BIG , BIG LOTS
-1.85% , SPLS , STAPLES
-1.29% , AGN , ALLERGAN
-1.38% , ACE , ACE
-0.45% , IYM , Basic Materials DJ US, IYM
-1.60% , TUP , TUPPERWARE
-2.81% , EMN , EASTMAN CHEM
-5.84% , OMX , OFFICEMAX INC., OMX
-0.53% , IGV , Software, IGV
-1.45% , QCOM , QUALCOMM
-1.58% , NWL , NEWELL RUBBER
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.57% Oil, Crude, U.S. Oil Fund, USO
2.14% Oil Fund PowerShares, DBO
1.99% Spain Index, EWP
1.85% Singapore Index, EWS
1.50% Energy Global, IXC
1.39% Frontier Markets Guggenheim , FRN
1.36% Energy DJ, IYE
1.35% Energy VIPERs, VDE
1.35% Energy SPDR, XLE
1.21% Pacific ex-Japan, EPP
1.11% Commodity Tracking, DBC
1.05% Russia MV, RSX
1.03% Hong Kong Index, EWH
1.00% Indonesia MV, IDX
0.97% Australia Index, EWA
0.93% Energy & Nat Res iS GS, IGE
0.92% Malaysia Index, EWM
0.84% Financial SPDR, XLF
0.80% China 25 iS, FXI
0.77% Chile MSCI iS, ECH
0.76% Italy Index, EWI
0.74% Turkey MSCI iS, TUR
0.74% Thailand MSCI iS, THD
0.73% Silver Trust iS, SLV
0.71% WilderHill Clean Energy PS, PBW
0.70% Value EAFE MSCI, EFV
0.69% Financial Services DJ, IYG
0.68% Germany Index, EWG
0.62% Mexico Index, EWW
0.55% Gold Shares S.T., GLD
0.55% Pacific VIPERs, VPL
0.55% Canada Index, EWC
0.52% Emerging Markets, EEM
0.52% Financials VIPERs, VFH
0.52% Utilities SPDR, XLU
0.52% Financial DJ US, IYF
0.50% Utilities VIPERs, VPU
0.49% United Kingdom Index, EWU
0.48% Bond EmrgMkt JPM iS, EMB
0.47% India Earnings WTree, EPI
0.46% Emerging VIPERs, VWO
0.46% EMU Europe Index, EZU
0.46% Bond, High-Yield Junk, JNK
0.44% Austria Index, EWO
0.41% China LargeCap Growth G D H USX PS, PGJ
0.38% Global ex US ACWI iS, ACWX
0.38% European VIPERs, VGK
0.37% Europe 350 S&P Index, IEV
0.36% Belgium Index, EWK
0.34% Latin Am 40, ILF
0.33% Value VIPERs, VTV
0.32% Bond, High-Yield Corporate, HYG
0.31% EAFE Index, EFA
0.29% Realty Cohen & Steers, ICF
0.26% Telecom DJ US, IYZ
0.25% Value S&P 500 B, IVE
0.24% Emerging 50 BLDRS, ADRE
0.24% Global 100, IOO
0.22% Switzerland Index, EWL
0.22% Bond Ex-US Treas, BWX
0.22% Japan Index, EWJ
0.21% Value 1000 Russell, IWD
0.21% South Korea Index, EWY
0.21% Dividend International, PID
0.18% Netherlands Index, EWN
0.18% Preferred Stock iS, PFF
0.17% Bond, Corp, LQD
0.16% Real Estate US DJ, IYR
0.12% Bond, 20+ Years Treasury, TLT
0.12% Sweden Index, EWD
0.11% Value MidCap Russell, IWS
0.11% REIT VIPERs, VNQ
0.11% Dividend High Yield Equity PS, PEY
0.10% Financial Preferred, PGF
0.09% Growth EAFE MSCI, EFG
0.08% Taiwan Index, EWT
0.07% REIT Wilshire, RWR
0.05% France Index, EWQ
0.04% Dividend DJ Select, DVY
0.03% LargeCap Blend S&P 100, OEF
0.02% LargeCap Blend S&P=Weight R, RSP
0.01% S&P 500 SPDRs LargeCap Blend, SPY
0.01% Bond, 1-3 Year Treasury, SHY
0.00% Value LargeCap Dynamic PS, PWV
0.00% Small Cap EAFE MSCI iS, SCZ
0.00% LargeCap 1000 R, IWB
0.00% Bond Treasury Short-Term iS, SHV
0.00% Bear, Short S&P 500, SH
-0.01% Bond, Aggregate, AGG
-0.02% Dividend SPDR, SDY
-0.04% S&P 500 iS LargeCap Blend, IVV
-0.04% LargeCap Blend Russell 3000, IWV
-0.06% South Africa Index, EZA
-0.07% LargeCap VIPERs, VV
-0.07% Capital Markets KWB ST, KCE
-0.07% Blend Total Market VIPERs, VTI
-0.08% Health Care SPDR, XLV
-0.09% Bond, 10 Year Treasury, IEF
-0.10% Bond, TIPS, TIP
-0.10% Metals & Mining SPDR, XME
-0.10% Value SmallCap VIPERS, VBR
-0.12% Growth S&P 500/BARRA, IVW
-0.14% Consumer Staples SPDR, XLP
-0.15% Value MidCap S&P 400 B, IJJ
-0.15% MidCap Russell, IWR
-0.18% Dividend Appreciation Vipers, VIG
-0.20% Transportation Av DJ, IYT
-0.23% Value SmallCap Russell 2000, IWN
-0.24% Bond Muni ATM-Free S&P iS, MUB
-0.24% Brazil Index, EWZ
-0.24% Microcap Russell, IWC
-0.27% MidCap S&P 400 iS, IJH
-0.30% MidCap S&P 400 SPDRs, MDY
-0.32% Materials SPDR, XLB
-0.33% Growth VIPERs, VUG
-0.34% SmallCap Russell 2000, IWM
-0.35% DIAMONDS (DJIA), DIA
-0.36% Growth MidCap 400 B, IJK
-0.36% Value SmallCap S&P 600 B, IJS
-0.38% Small Cap VIPERs, VB
-0.40% SmallCap S&P 600, IJR
-0.40% Growth BARRA Small Cap 600, IJT
-0.41% India PS, PIN
-0.45% Basic Materials DJ US, IYM
-0.45% Semiconductor SPDR, XSD
-0.46% Technology SPDR, XLK
-0.46% Growth 1000 Russell, IWF
-0.48% Growth MidCap Russell, IWP
-0.51% Agriculture DB PS, DBA
-0.55% QQQ Nasdaq 100 Trust, QQQ
-0.55% Water Resources, PHO
-0.58% Consumer Discretionary SPDR, XLY
-0.62% Info Tech VIPERs, VGT
-0.63% Technology DJ US, IYW
-0.64% Growth SmallCap R 2000, IWO
-0.67% Growth SmallCap VIPERs, VBK
-0.81% Industrial SPDR, XLI
-0.99% Homebuilders SPDR, XHB
-1.11% Semiconductor iS IGW, SOXX
-1.66% Networking, IGN
-1.90% Biotech SPDR, XBI