The S&P 500 (SPX: 1,365.51) rose 3.35 points or 0.25% on Monday. Dow Jones Industrial and Transportation Averages both declined slightly, however.

NYSE volume fell 26% to a level well-below average, suggesting a substantial decline in the demand for stocks. Volume patterns generally have been bearish for months, with a tendency toward lower volume on rallies and higher volume on declines, indicating the dominance of selling pressure over buying pressure.

Seasonal tendencies are generally bullish at the beginning of a new month and before the 4th of July Independence Day holiday in the U.S. This time, however, most of the fireworks already may have been spent last Friday.

Friday was the end of the second quarter, and the price markup had the appearance of window dressing to make portfolio managers look better after a dismal quarter. The SPX still lost 3.29% in 2Q, even after Friday’s big +2.49% painted tape.

SPX has recovered slightly more than a 61.8% Fibonacci ratio of its April-June loss, which is normal for a counter-trend move and a natural point of technical resistance.

It seems that much depends on the news out of Europe. That news has proved to be unpredictable, making trading risky. At this time, it might be best to trade nimble and quick, and keep risk well contained. Or, even better, take a vacation.

For extensive coverage of major global markets with illustrative charts, take a free trial for my weekly report —
click here.
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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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Stock Market Indicators

The Dow Theory signaled a Primary Tide Bear Market on 5/17/12 when both Industrials and Transports closed below their closing price lows of the previous 4 months, including the critical lows of March and April, 2012. The Averages gave an early warning by diverging after 2/3/12, as the Transports turned corrective and failed to confirm higher highs by the Industrials. Again on 5/1/12, the Industrials rose to a higher closing price high while the Transports failed to rise to a higher closing price high, thereby indicating a non-confirmation and bearish divergence.

NASDAQ Composite/S&P 500 Relative Strength Ratio whipsawed up above its 50-day SMA on 7/2/12, thereby turning systematically bullish: above its 50-day SMA, above its 200-day SMA, and its 50-day SMA has been above its 200-day SMA since 2/3/12.With resistance nearby, however, there appears to be risk of further whipsaws ahead.

iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its lows of the previous 3 years on 6/25/12, reconfirming its bearish trend. Systematically, BKF/SPY 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 1/13/11.

Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below its lows of the previous 3 years on 5/25/12, reconfirming its bearish trend. EEM/SPY remains below its 50-day and 200-day SMAs. Longer term, the 50-day SMA has remained below the 200-day SMA every day since 2/3/11.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) reconfirmed a bearish major trend when it fell below its lows of the previous 9 years on 6/25/12. Systematically, EFA/SPY remains bearish below its 50-day and 200-day SMAs, and the 50-day SMA has remained below the 200-day SMA consistently every day since 1/14/11.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) rose above its highs of the previous 2 years on 6/27/12, reconfirming its preexisting major bullish trend. OEX/SPX remains systematically bullish above its 50-day SMA, above its 200-day SMA, and the 50-day SMA has been above the 200-day SMA consistently every day since 8/24/11. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative safety of large size. On the other side of the coin, Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors prefer riskier and more volatile stocks.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) whipsawed back up above its 200-day SMA on 7/2/12. IWM/SPY remains systematically neutral with its 50-day SMA below its 200-day SMA since 4/20/12. Longer term, IWM/SPY has been relatively weak for more than a year, since 4/5/11.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below its lows of the previous 8 months on 6/14/12, reconfirming its preexisting major bearish trend. MDY/SPY turned systematically bearish on 6/6/12, when its 50-day SMA crossed below its 200-day SMA. MDY/SPY remains below its 50-day SMA and below its 200-day SMA.
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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. Some of the most recent data suggests that investors’ sentiment may be beginning to shift away from bullish complacency. The evidence is mixed, however, and there still is plenty of room for the pendulum of emotion to swing too far in the direction of bearish excess.

VIX Fear Index fell to 16.66 intraday on 7/2/12, its lowest level since 5/1/12. VIX fell from an intraday peak of 27.73 on 6/4/12. This large drop suggests a rapid shift from worried concern 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
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
1363.49, high of 6/19/2012

The S&P 500 Composite Potential Support
1362.93, Fibonacci 61.8% of April-June 2012 range
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
1339.95, 50-day SMA
1344.56, Fibonacci 50% of April-June 2012 range
1340.34, Fibonacci 23.6% of 2011-12 range
1340.03, low of 3/6/2012
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
1300.36, 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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Fixed-Income Investments

Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) whipsawed back down below its 50-day SMA on 7/2/12, thereby turning systematically bearish again. JNK/LQD remains below its 200-day SMA. The 50-day SMA fell below the 200-day SMA on 6/1/12.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below its lows of the previous 9 months on 7/2/12, reconfirming its major downtrend and suggesting disinflation or deflation. TIP/IEF is systematically bearish: below its 50-day SMA, below its 200-day SMA, and the 50-day SMA crossed below the 200-day SMA on 6/27/12.
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) price remains systematically bullish: above its 50-day SMA, above its 200-day SMA, and with the 50-day SMA above the 200-day SMA. Support 22.38, 22.14, 21.89, 21.74, 21.58, 21.07, and 20.84. Resistance 23.02, 23.52, 25.84, 27.19, 28.97.

CRB Commodity Price Index whipsawed back above its 50-day SMA on 7/2/12, thereby turning systematically neutral again. CRB remains below its 200-day SMA, and the 50-day SMA has remained below the 200-day SMA every day since 8/18/11.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) whipsawed back above its 50-day SMA on 6/25/12, thereby turning systematically neutral again. DBA is now above its 50-day SMA, below its 200-day SMAs, and the 50-day SMA has been consistently below the 200-day SMA every day since 8/8/11.

Crude Oil, United States Oil ETF (USO) fell below the lows of the previous 3 years on 6/28/12, again confirming a major downtrend. USO turned systematically bearish on 6/7/12, when the 50-day SMA fell below the 200-day SMA. USO remains below its 50-day and 200-day SMAs. Support 29.02, 26.28, and 22.74. Resistance 32.80, 34.76, 35.19, 36.97, 40.29, 41.38, 42.30, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) fell below its 50-day SMA on 6/20/12, turning systematically bearish again. GLD remains below its 200-day SMA, and its 50-day SMA remains below its 200-day SMA. Support: 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 159.20, 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) whipsawed back up above its 50-day SMA on 6/29/12, turning systematically neutral again. GDX/GLD remains below its 200-day SMA, 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) fell below its lows of the previous 19 months on 6/28/12, thereby confirming its preexisting major bearish trend. SLV remains systematically 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 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 26.88, 28.26, 29.02, 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 20 months on 6/28/12, reconfirming its major downtrend. SLV/GLD remains systematically bearish: below its 50-day SMA, below its 200-day SMA, and the 50-day SMA has remained below the 200-day SMA every day since 8/30/11.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) fell below its lows of the previous 5 months on 6/8/12, reconfirming its major downtrend. JJC turned systematically bearish on 5/31/12, when the 50-day SMA crossed below the 200-day SMA. JJC 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
21.52% , LNCR , Lincare Holdings Inc
2.37% , VOX , Telecom Services VIPERs, VOX
2.12% , KWT , Solar Energy MV, KWT
1.13% , IXP , Telecommunications Global, IXP
5.92% , BBY , BEST BUY
3.96% , CHRW.O , CH Robinson Worldwide Inc, CHRWD
1.24% , DGT , Global Titans, DGT
7.30% , SIRI , Sirius Satellite
4.00% , XBI , Biotech SPDR, XBI
0.58% , TLH , Bond 10-20 Year US Treas, TLH
0.45% , VCR , Consumer D. VIPERs, VCR
0.78% , PEJ , Leisure & Entertainment, PEJ
1.74% , IYZ , Telecom DJ US, IYZ
0.73% , IXJ , Healthcare Global, IXJ
1.11% , EWO , Austria Index, EWO
0.79% , IDU , Utilities DJ, IDU
0.69% , VDC , Consumer Staples VIPERs, VDC
6.17% , JNY , JONES APPAREL
3.80% , MU.O , MICRON TECH
0.59% , IYC , Consumer Cyclical DJ, IYC
3.34% , LTD , LIMITED BRANDS
0.86% , IJS , Value SmallCap S&P 600 B, IJS
1.95% , WPO , Washington Post
0.08% , JKI , Value MidCap iS M, JKI
0.62% , VHT , Health Care VIPERs, VHT
0.49% , IOO , Global 100, IOO
0.45% , RFG , Growth MidCap S&P 400, RFG
4.20% , AN , AUTONATION
0.96% , VB , Small Cap VIPERs, VB
3.20% , STLD , Steel Dynamics, STLD
1.00% , PBJ , Food & Beverage, PBJ
2.52% , FDV , Value 40 Large Low P/E FT DB, FDV
3.27% , HGSI , Human Genome Sciences Inc

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-7.30% , PMTC.O , PARAMETRIC
-0.73% , MUB , Bond Muni ATM-Free S&P iS, MUB
-0.44% , PXQ , Networking, PXQ
-0.37% , PPA , Aerospace & Defense, PPA
-3.10% , DLTR , Dollar Tree Stores Inc
-2.42% , ROK , ROCKWELL AUTOMAT
-0.63% , PGJ , China LargeCap Growth G D H USX PS, PGJ
-3.18% , FAST , Fastenal Company
-1.29% , EMN , EASTMAN CHEM
-2.39% , LVLT.K , LEVEL 3 COMMUNICATIONS
-0.06% , PIC , Insurance, PIC
-3.83% , UNH , UNITEDHEALTH GRP
-1.57% , ITW , ILLINOIS TOOL
-1.64% , KR , KROGER
-2.25% , DD , DU PONT
-0.71% , IGN , Networking, IGN
-0.41% , JNK , Bond, High-Yield Junk, JNK
-0.24% , PMR , Retail, PMR
-1.58% , MSI , Motorola Solutions, MSI
-1.34% , PPG , PPG INDUSTRIES
-3.78% , CROX , CROCS Inc., CROX
-0.08% , TIP , Bond, TIPS, TIP
-0.51% , XLB , Materials SPDR, XLB
-0.20% , XSD , Semiconductor SPDR, XSD
-1.51% , BA , BOEING
-0.34% , IYJ , Industrial LargeCap Blend DJ US, IYJ
-0.89% , RYAAY , Ryanair Holdings plc
-0.08% , BWX , Bond Ex-US Treas, BWX
-0.44% , AVY , AVERY DENNISON
-0.11% , IYT , Transportation Av DJ, IYT
-0.35% , EPU , Peru MSCI iS, EPU
-1.94% , R , RYDER SYSTEM
-0.16% , THD , Thailand MSCI iS, THD
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
4.00% Biotech SPDR, XBI
2.26% WilderHill Clean Energy PS, PBW
1.74% Telecom DJ US, IYZ
1.71% Brazil Index, EWZ
1.70% Microcap Russell, IWC
1.41% United Kingdom Index, EWU
1.21% Growth SmallCap R 2000, IWO
1.16% SmallCap Russell 2000, IWM
1.15% Russia MV, RSX
1.11% Austria Index, EWO
1.10% REIT VIPERs, VNQ
1.07% France Index, EWQ
1.07% Real Estate US DJ, IYR
0.97% Capital Markets KWB ST, KCE
0.97% Realty Cohen & Steers, ICF
0.96% REIT Wilshire, RWR
0.96% Small Cap VIPERs, VB
0.94% Value SmallCap Russell 2000, IWN
0.93% Utilities VIPERs, VPU
0.92% Europe 350 S&P Index, IEV
0.89% Agriculture DB PS, DBA
0.87% Homebuilders SPDR, XHB
0.86% Value SmallCap S&P 600 B, IJS
0.86% Germany Index, EWG
0.85% Value SmallCap VIPERS, VBR
0.82% Australia Index, EWA
0.82% SmallCap S&P 600, IJR
0.81% Bond, 20+ Years Treasury, TLT
0.75% Financial Services DJ, IYG
0.72% Water Resources, PHO
0.72% Growth SmallCap VIPERs, VBK
0.71% Financial DJ US, IYF
0.70% European VIPERs, VGK
0.70% Latin Am 40, ILF
0.69% MidCap S&P 400 SPDRs, MDY
0.69% Belgium Index, EWK
0.68% Dividend International, PID
0.67% Growth MidCap 400 B, IJK
0.67% Netherlands Index, EWN
0.66% Value MidCap S&P 400 B, IJJ
0.66% EAFE Index, EFA
0.65% Growth EAFE MSCI, EFG
0.64% Dividend High Yield Equity PS, PEY
0.64% Emerging 50 BLDRS, ADRE
0.62% Utilities SPDR, XLU
0.62% Financial SPDR, XLF
0.61% Financials VIPERs, VFH
0.59% MidCap S&P 400 iS, IJH
0.59% Pacific ex-Japan, EPP
0.58% EMU Europe Index, EZU
0.57% Technology SPDR, XLK
0.57% Singapore Index, EWS
0.56% Global ex US ACWI iS, ACWX
0.56% Consumer Staples SPDR, XLP
0.54% Sweden Index, EWD
0.50% Financial Preferred, PGF
0.49% Value EAFE MSCI, EFV
0.49% Global 100, IOO
0.48% Dividend DJ Select, DVY
0.44% Small Cap EAFE MSCI iS, SCZ
0.44% Mexico Index, EWW
0.43% MidCap Russell, IWR
0.41% Frontier Markets Guggenheim , FRN
0.41% Canada Index, EWC
0.41% India Earnings WTree, EPI
0.41% Growth MidCap Russell, IWP
0.38% Info Tech VIPERs, VGT
0.35% Switzerland Index, EWL
0.32% Health Care SPDR, XLV
0.32% Bond, 10 Year Treasury, IEF
0.31% Metals & Mining SPDR, XME
0.30% Hong Kong Index, EWH
0.30% Silver Trust iS, SLV
0.30% LargeCap Blend Russell 3000, IWV
0.30% S&P 500 SPDRs LargeCap Blend, SPY
0.30% Consumer Discretionary SPDR, XLY
0.30% QQQ Nasdaq 100 Trust, QQQ
0.28% Growth 1000 Russell, IWF
0.27% Blend Total Market VIPERs, VTI
0.27% Growth BARRA Small Cap 600, IJT
0.27% Growth S&P 500/BARRA, IVW
0.27% Technology DJ US, IYW
0.26% Value MidCap Russell, IWS
0.24% LargeCap Blend S&P=Weight R, RSP
0.23% Bond EmrgMkt JPM iS, EMB
0.22% Growth VIPERs, VUG
0.21% LargeCap 1000 R, IWB
0.21% S&P 500 iS LargeCap Blend, IVV
0.20% Bond, Corp, LQD
0.19% LargeCap VIPERs, VV
0.18% Chile MSCI iS, ECH
0.17% Energy Global, IXC
0.16% Value 1000 Russell, IWD
0.16% Value S&P 500 B, IVE
0.16% LargeCap Blend S&P 100, OEF
0.15% Value LargeCap Dynamic PS, PWV
0.14% Value VIPERs, VTV
0.14% South Africa Index, EZA
0.12% Energy VIPERs, VDE
0.12% Spain Index, EWP
0.10% Emerging VIPERs, VWO
0.10% Pacific VIPERs, VPL
0.05% Energy SPDR, XLE
0.03% Energy & Nat Res iS GS, IGE
0.03% Energy DJ, IYE
0.00% Bond, 1-3 Year Treasury, SHY
0.00% Taiwan Index, EWT
-0.01% Bond, Aggregate, AGG
-0.01% Bond Treasury Short-Term iS, SHV
-0.03% Emerging Markets, EEM
-0.04% Dividend Appreciation Vipers, VIG
-0.04% Dividend SPDR, SDY
-0.06% China 25 iS, FXI
-0.06% Gold Shares S.T., GLD
-0.07% DIAMONDS (DJIA), DIA
-0.07% Indonesia MV, IDX
-0.08% Bond, TIPS, TIP
-0.08% Bond Ex-US Treas, BWX
-0.09% Italy Index, EWI
-0.11% Transportation Av DJ, IYT
-0.13% Turkey MSCI iS, TUR
-0.15% Semiconductor iS IGW, SOXX
-0.15% Preferred Stock iS, PFF
-0.16% Thailand MSCI iS, THD
-0.19% Commodity Tracking, DBC
-0.20% Semiconductor SPDR, XSD
-0.30% Bear, Short S&P 500, SH
-0.32% Japan Index, EWJ
-0.41% Bond, High-Yield Junk, JNK
-0.46% Bond, High-Yield Corporate, HYG
-0.46% Basic Materials DJ US, IYM
-0.49% Malaysia Index, EWM
-0.51% Materials SPDR, XLB
-0.63% China LargeCap Growth G D H USX PS, PGJ
-0.64% India PS, PIN
-0.71% Networking, IGN
-0.73% Bond Muni ATM-Free S&P iS, MUB
-0.87% Industrial SPDR, XLI
-1.04% South Korea Index, EWY
-1.26% Oil, Crude, U.S. Oil Fund, USO
-1.59% Oil Fund PowerShares, DBO