By Robert W. Colby, Senior Analyst TraderPlanet.com

Short-term momentum indicators turned down.

Technology stock sector made a new 6-year closing price high.

NASDAQ Composite index price made a new 6-year high.

U.S. dollar had an oversold bounce.

Foreign stocks stalled out as the U.S. dollar bounced.

My Top 10 ETF Relative Strength Ranks are all Foreign (see below).

Gold reversed to the downside.

Crude Oil futures downside momentum slowed.


On Tuesday, major stock price indices opened higher but closed mixed. Breadth was modestly Bullish, with more Advances than Declines, and Up Volume was greater than Down Volume. New Highs/New Lows ratios were about 3 to 1 Bullish on the NYSE. Short-term momentum indicators turned down.

Excessive strength begets weakness. Temporary minor sinking spells are to be expected in any uptrend. The stock market has absorbed 1- to 4-day bouts of normal profit taking with minimal damage and with resilience since the low on 8/16/07. That indicates underlying demand and a Bullish intermediate-term trend for stocks. Finally, the long-term Primary Tide Trend remains Bullish, according to the Dow Theory.

Seasonal tendencies are a concern in days ahead. The month of October has suffered some notable downside shakeouts in past history. So, we definitely do not want to get complacent. Be alert and flexible.

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
% Price Change, Symbol, Name

0.90% , RFV , Value MidCap S&P 400, RFV
0.46% , EWP , Spain Index, EWP
8.91% , CIEN.O , CIENA
1.00% , RFG , Growth MidCap S&P 400, RFG
0.77% , JKK , Growth SmallCap iS M, JKK
0.76% , DSG , Growth Small Cap DJ, DSG
4.44% , XHB , Homebuilders SPDR, XHB
2.75% , LAMR , Lamar Advertising Company
0.47% , JKH , MidCap Growth iS M, JKH
6.54% , DHI , D.R. HORTON, DHI
2.25% , TRB , TRIBUNE
0.38% , SLM , SLM CORP
4.68% , TUP , TUPPERWARE
3.88% , MU , MICRON TECH
2.52% , EWW , Mexico Index, EWW
3.56% , SEE , SEALED AIR
2.75% , X , US STEEL CORP
1.09% , LNCR , Lincare Holdings Inc
2.10% , PBG , PEPSI BOTTLING
4.93% , KBH , KB HOME
1.39% , MYL , MYLAN LABS
4.80% , PHM , PULTE HOMES
4.14% , FNM , FANNIE MAE
6.23% , LEN , Lennar Corp. (LEN)
0.76% , PXQ , Networking, PXQ
1.83% , MDP , MEREDITH
2.06% , PMTC.O , PARAMETRIC
0.67% , PMR , Retail, PMR
4.21% , ODP , OFFICE DEPOT
2.35% , RFMD , RF Micro Devices Inc
2.60% , HPC , HERCULES
0.63% , PZI , Micro Cap Zachs, PZI
3.80% , CTX , CENTEX
0.83% , EWM , Malaysia Index, EWM
2.89% , CECO , CAREER EDUCATION CORP
2.27% , AIV , APT INV MNGMT
1.01% , IYF , Financial DJ US, IYF
1.53% , EWY , South Korea Index, EWY
0.58% , ITF , Japan LargeCap Blend TOPIX 150, ITF
3.21% , PLD , PROLOGIS TRUST
0.70% , MCO , MOODYS CORP
4.37% , SHLD , SEARS HOLDINGS
2.04% , MAR , MARRIOTT INTL STK A
1.79% , KSS , KOHLS
2.51% , SYMC , SYMANTEC
1.46% , DLX , DELUXE
3.44% , MRVL , MARVELL TECHNOLOGY
0.38% , EWK , Belgium Index, EWK
2.69% , EMC , EMC
0.17% , VOX , Telecom Services VIPERs, VOX

Bearish Stocks: Falling Price and Rising Volume
% Price Change, Symbol, Name

-3.71% , MXIM , MAXIM INTEGRATED
-0.41% , XSD , Semiconductor SPDR, XSD
-3.44% , HSY , HERSHEY FOODS
-0.78% , EWC , Canada Index, EWC
-0.77% , SLR , SOLECTRON
-3.18% , PKI , PERKINELMER
-0.24% , EWO , Austria Index, EWO
-1.12% , IXC , Energy Global, IXC
-0.33% , PBJ , Food & Beverage, PBJ
-1.10% , IYE , Energy DJ, IYE
-2.67% , SHW , SHERWIN WILLIAMS
-3.46% , AMCC , APPLD MICRO CIRC
-1.14% , CDWC , CDW Corporation
-0.08% , IGN , Networking, IGN
-1.44% , GNTX , Gentex Corporation
-2.76% , HES , AMERADA HESS
-2.10% , GLD , Gold Shares S.T., GLD
-2.07% , IAU , Gold COMEX iS, IAU
-2.44% , APD , AIR PRODS & CHEM
-0.48% , EFG , Growth EAFE MSCI, EFG
-1.64% , TBH , Telebras H, TBH
-0.41% , IXP , Telecommunications Global, IXP
-1.93% , WLP , WELLPOINT HEALTH
-0.69% , IGE , Natural Resource iS GS, IGE
-1.25% , XME , Metals & Mining SPDR, XME
-0.45% , VPL , Pacific VIPERs, VPL
-1.61% , VIA , VIACOM INC. (New)
-2.04% , SSCC , Smurfit-Stone Container Corporation
-2.12% , PX , PRAXAIR
-1.91% , ROH , ROHM & HAAS
-3.19% , STT , STATE STREET
-2.54% , CSC , COMPUTER SCIENCE
-1.61% , HRB , H&R BLOCK
-0.56% , IYM , Basic Materials DJ US, IYM
-0.11% , PIV , Value Line Timeliness MidCap Gr, PIV
-1.16% , OMC , OMNICOM
-0.16% , PWB , Lg Cap Growth PSD, PWB
-0.71% , CMS , CMS ENERGY
-0.44% , EPP , Pacific ex-Japan, EPP
-2.37% , SYY , SYSCO
-0.46% , RPG , Growth S&P 500, RPG
-2.20% , COP , CONOCOPHILLIPS
-1.47% , APA , APACHE
-1.01% , EWA , Australia Index, EWA
-0.14% , OEF , LargeCap Blend S&P 100, OEF
-1.07% , BBH , Biotech H, BBH
-3.36% , BIIB , BIOGEN IDEC
-0.59% , MYY , Short 100% MidCap 400, MYY
-1.58% , VIA.B , VIACOM STK B
-1.54% , NBR , NABORS

Sectors: among the 9 major U.S. sectors, 4 rose and 5 fell.
Major Sectors Ranked for the Day
% Price Change, Sector

1.06% Financial
0.37% Technology
0.37% Utilities
0.04% Consumer Staples
-0.03% Consumer Discretionary
-0.56% Health Care
-0.70% Materials
-0.79% Industrial
-1.45% Energy

Looking beyond the daily fluctuation to the major trends (listed in order of relative strength):

Energy (XLE) Bullish, Overweight. XLE made an all-time closing price high on 10/1/07. Relative strength made a new all-time high on 9/21/07. XLE has been strong compared to the S&P since 3/12/03.

Materials (XLB) Bullish, Overweight. Relative strength made a new 10-week high on 10/1/07. The relative strength trend strongly outperformed since the price shakeout low on 8/16/07, and its long term trend has been Bullish since 9/27/2000.

Technology (XLK) Bullish, Overweight. XLK closed at a new 6-year closing price high on 10/2/07, and relative strength made a new 2-year high on 9/26/07. Long term, XLK has been relatively strong compared to the S&P since its low on 7/24/06.

Industrial (XLI) Bullish, Overweight. Industrial stock sector price hit an all-time price high on 10/2/07 but reversed to close lower. Longer term, XLI has been relatively strong compared to the S&P since 8/9/06.

Utilities (XLU) Bearish, Underweight. This defensive sector’s relative strength made a new 8-week low on 9/28/07.

Consumer Staples (XLP) Bearish, Underweight. This defensive sector’s relative strength broke down to a new 9-week low on 10/1/07.

Health Care (XLV) Bearish, Underweight. Relative strength has been trending down since 10/9/02, and it made a new 5-year low on 7/19/07, thereby confirming a major downtrend.

Financial (XLF) Bearish, Underweight. Relative strength has been trending down since 2/20/07. down to a new 8 week low on 9/26/07, and the long-term trend of relative strength has been down since 2/20/07.

Consumer Discretionary (XLY) Bearish, Underweight. Price hit a new 10-month low on 8/16/07. Relative strength made another new 6-year low on 9/27/07.

Foreign stocks stalled out as the U.S. dollar bounced. The EFA (the EAFE, international developed country stock markets, ex the U.S. and Canada) has substantially outperformed long term, since the Bull market started in 2002, and the secular trend is probably still Bullish. My Top 10 ETF Relative Strength Ranks are all Foreign (see below).

NASDAQ Composite index price made a new 6-year high. Relative strength rose each of the past 9 trading days and made a new 17-month high. Longer term, NASDAQ has outperformed for more than a year, since 8/8/06.

Growth stocks made a new 6-year high and substantially outperformed Value stocks since 9/19/07. Also, Growth has outperformed Value since 8/8/06. The main trend is Bullish.

Small Caps bounced since 9/28/07. But they substantially underperformed Large Caps since 4/19/06.The main trend is Bearish.

Crude Oil futures fell for the third consecutive session—but downside momentum slowed. Oil help above the 9/26/07 minor low at 78.44. Note that the U.S. OIL FUND ETF (AMEX: USO) is not a pure play on Crude Oil. The longer-term trends for both remain Bullish.

The Energy stock sector underperformed the USO and the SPY for the day. Longer term, since 3/12/03, the stocks in the Energy Select Sector SPDR ETF (XLE) have significantly outperformed crude oil as a commodity, as well as the S&P 500. So, the Relative Strength major trend is Bullish for the energy stocks.

Gold broke sharply lower after making a new 28-year high on 10/1/07. The Gold Trust ETF (NYSE: GLD) confirmed. These major trends remain Bullish.

Silver underperformed again. Compared to Gold, the main trend has remained relatively Bearish for iShares Silver Trust (AMEX: SLV) since 12/7/06.

The Gold Miners ETF (GDX) underperformed Gold since 9/20/07. Before 8/16/07, Gold Mining stocks substantially underperformed both Gold and the S&P 500 for more than 20 years.

Inflation expectations turned down and appear choppy and uncertain since 6/22/07.

U.S. Treasury Bond prices appear to be consolidating. Bonds lack momentum and volume and, therefore, are not impressive. Long-term, it seems possible that the iShares Lehman 20+ Year U.S. Treasury Bond ETF (AMEX: TLT) ended a normal oversold bounce in a Bearish trend on 9/10/07. Bonds remain reactive to news about the credit crisis: the worse the credit crisis, the higher the Bond prices; the better the credit crisis, the lower the Bond prices.

U.S. dollar bounced from oversold. The dollar has fallen 16% over the past 23 months and its main trend remains very Bearish.

Daily Rankings of Major Global Markets, Ranked from Strongest to Weakest of the Day:

3.04% Airlines
2.52% Mexico
1.66% REITs
1.52% South Korea
1.49% Broker Dealers
1.45% Hong Kong
1.06% Financial
0.89% Retailers
0.88% Russell 2000
0.88% Insurance
0.83% Malaysia
0.78% S&P Small Caps
0.55% Internet
0.54% S&P Mid Caps
0.52% Taiwan
0.50% Banks
0.48% Value Line
0.47% US Dollar Index
0.46% Spain
0.39% Network
0.38% Belgium
0.37% Technology
0.37% Utilities
0.36% 30Y T-Bond
0.28% Dow Transports
0.27% Biotechs
0.22% Nasdaq Composite
0.21% Natural Gas
0.19% Paper
0.18% Hospitals
0.12% Wilshire 5000
0.11% Switzerland
0.09% Russell 3000
0.09% Computer Tech
0.04% Consumer Staples
0.02% Russell 1000
0.02% DOT
-0.01% Drugs
-0.01% Semiconductors
-0.03% S&P 500
-0.03% S&P 100
-0.03% Consumer Discretionary
-0.05% Nasdaq 100
-0.09% NYSE Composite
-0.09% Dow Composite
-0.13% Singapore
-0.15% Dow Utilities
-0.16% Japanese Yen
-0.16% British Pound
-0.17% Disk Drives
-0.24% Austria
-0.28% Japan
-0.29% Dow Industrial
-0.33% Health Care Products
-0.36% Health Care
-0.38% France
-0.39% AMEX Composite
-0.50% Hardware
-0.54% Germany
-0.54% United Kingdom
-0.56% Health Care
-0.57% Swiss Franc
-0.60% Euro Index
-0.63% Canadian Dollar
-0.64% Oil Services
-0.67% Sweden
-0.70% Materials
-0.78% Canada
-0.79% Industrial
-0.87% Brazil
-0.89% Chemicals
-0.98% Commodity Related
-0.98% Italy
-0.98% Australian Dollar
-1.01% Australia
-1.23% Netherlands
-1.45% Energy
-1.51% Oil
-3.26% Gold Mining