Stocks gapped higher on the open on Thursday in reaction to a report from Automatic Data Processing stating that private companies added 93,000 more jobs than economists expected. This naturally sets up expectations for a good Nonfarm Payrolls report on Friday. Anything less than the +80,000 consensus could knock stock prices back down, while a report greater than +80,000 might support the recent short-term minor stock price uptrend.

S&P 500 Composite (SPX, 1,353.22) rose 14.00 points or 1.05% on Thursday 7/7/11. SPX shows substantial chart Resistance in a 3% band from 1331 to 1371. Support 1249 to 1279.

Trading volume on the NYSE rose 11% above the previous day’s slow pace but still was 10% below the 200-day SMA. Low and falling volume raises doubts about the significance of any rally attempt.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) broke down further below 6-week lows on 7/7/11.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose above 13-week highs on 7/7/11. Absolute price has been rising for 3 weeks.
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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

2.13% , SWH , Software H, SWH
1.52% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
9.46% , DDS , DILLARD STK A
6.67% , TGT , TARGET
5.86% , JNS , JANUS CAPITAL
7.02% , KLAC , KLA TENCOR
2.60% , PSI , Semiconductors, PSI
2.00% , DBO , Oil Fund PowerShares, DBO
1.82% , IWC , Microcap Russell, IWC
7.08% , KSS , KOHLS
2.49% , PMR , Retail, PMR
1.91% , IDX , Indonesia MV, IDX
1.52% , PXJ , Oil & Gas, PXJ
2.04% , PXE , Energy Exploration & Prod, PXE
4.21% , BIG , BIG LOTS
1.45% , PXQ , Networking, PXQ
1.16% , PXN , Nanotech Lux, PXN
4.29% , JWN , NORDSTROM
1.53% , FDV , Value 40 Large Low P/E FT DB, FDV
2.11% , DBC , Commodity Tracking, DBC
1.37% , IYW , Technology DJ US, IYW
2.67% , LTD , LIMITED BRANDS
5.42% , RFMD , RF Micro Devices Inc
3.97% , LVLT , LEVEL 3 COMMUNICATIONS
2.25% , RTH , Retail H, RTH
3.89% , AN , AUTONATION
1.28% , RFG , Growth MidCap S&P 400, RFG
3.20% , PIN , India PS, PIN
4.32% , SVU , SUPERVALU
2.91% , LSI , LSI LOGIC
1.12% , XLG , LargeCap Rydex Rus Top 50, XLG
3.68% , FCX , FREEPRT MCMORAN STK B
1.01% , RYAAY , Ryanair Holdings plc

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

-2.65% , PFE , PFIZER
-2.14% , NOC , NORTHROP GRUMMAN
-2.13% , WLP , WELLPOINT HEALTH
-2.17% , HUM , HUMANA
-1.35% , JCP , JC PENNEY
-1.48% , WPI , WATSON PHARM
-2.77% , QID , Short 200% QQQ PS, QID
-2.71% , DPS , Dr Pepper Snapple Group
-1.00% , YUM , YUM BRANDS
-1.09% , SH , Short 100% S&P 500, SH
-1.09% , AET , AETNA
-1.49% , HANS , Hansen Natural, HANS
-0.98% , ADM , ARCHER DANIELS
-0.78% , GIS , GENERAL MILLS
-0.19% , TLH , Bond 10-20 Year US Treas, TLH
-2.35% , GT , GOODYEAR TIRE
-0.76% , DOG , Short 100% Dow 30, DOG
-2.08% , MZZ , Short 200% MidCap 400 PS, MZZ
-1.72% , NE , NOBLE
-0.94% , UNH , UNITEDHEALTH GRP
-0.70% , COST , COSTCO WHOLESAL
-0.21% , MUB , Bond Muni ATM-Free S&P iS, MUB
-2.10% , SDS , Short 200% S&P 500 PS, SDS
-0.71% , EL , Estee Lauder
-0.33% , MAS , MASCO
-0.25% , SBUX , STARBUCKS
-1.47% , CPB , CAMPBELL SOUP
-0.39% , SO , SOUTHERN
-0.21% , FRN , Frontier Markets Guggenheim , FRN
-0.60% , AGN , ALLERGAN
-1.09% , COH , COACH
-0.73% , MHS , MEDCO HEALTH
-1.51% , DXD , Short 200% Dow 30 PS, DXD
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9 Major U.S. Stock Sectors
ranked in order of long-term relative strength
Now available by subscription at a 33% discount.
The Colby Global Markets Report (click here)

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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) has been 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) broke down further below 6-week lows on 7/7/11. The Ratio has been trading with a bearish bias since peaking on 11/27/07. 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 entered a correction since peaking on 1/18/11. The Ratio fell below 8-month lows on 6/20/11.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell further below 28-year lows on 5/26/11, again reconfirming its preexisting bearish major trend.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) recovered substantially since breaking down below 4-month lows on 6/13/11. The Ratio was in a clear downside correction from 4/5/11 to 6/13/11.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose above 13-week highs on 7/7/11. Absolute price has been rising for 3 weeks.

Crude Oil nearest futures contract price rose above the highs of the previous 14 trading days on 7/7/11, confirming a minor rally. Oil penetrated a 2-month downtrend line on 7/5/11, overcoming resistance. And this just after Oil broke down below the lows of the past 4 months on 6/27/11, reconfirming a significant downtrend. Unpredictable reversals like this make Oil a risky market to trade at this time. At this moment, the bulls have regained the momentum advantage–but who knows for how long? Support 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 103.39, 104.60, 105.16, 114.83, 115.27, 120.42, 130.0, and 147.27.

Gold nearest futures contract price rose above the highs of the previous 8 trading days on 7/7/11, confirming a minor rally attempt. But Gold broke down below the lows of the past 6 weeks on 7/1/11, reconfirming a preexisting short-term downtrend. On 6/9/11, when Gold was 1542.7, I noted that Gold “appears to have stalled out since 6/6/11. Gold’s 5-week countertrend bounce might be weakening. Reward/Risk does not appear attractive. It seems possible that Gold has finally topped out at 1577.4 after rising 132% from 681 in October, 2008.” 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: 1559.3 and 1577.4.

Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) fell further below 27-month lows on 6/17/11. The Ratio has been falling steeply since 4/8/11 and remains bearish. GDX is offering a bearish divergence relative to GLD, and that might be taken as a warning about prospects for GLD, Gold futures, bullion, and coins.

Silver nearest futures contract price rose above the highs of the previous 8 trading days on 7/7/11, confirming a minor rally attempt. But Silver broke down below the lows of the past 5 weeks on 6/27/11, confirming a short-term downtrend. Silver fell 35% from 49.82 on 4/25/11 to 32.3 on 5/12/11, breaking down below 10-week lows. On 5/2/11, when Silver was 46.084, I wrote, “Silver nearest futures contract price broke sharply below the lows of the previous 2 weeks. The short-term price trend has turned down. If this downtrend continues, it could have implications for inflation expectations.” Support 33.38, 32.3, 31.695, 31.61, 30.265, 29.635, 26.30, 24.98, and 22.84. Resistance: 36.77, 37.86, 38.845, 39.38, 39.47, 49.82, 49.845 and 50.35.

Silver/Gold Ratio fell below the lows of the previous 4 months in 6/27/11, reconfirming a preexisting downtrend for the medium term. The Ratio entered a steep downtrend since the peak on 4/28/11 and remains bearish.

Copper nearest futures contract price rose above the highs of the previous 2 months on 7/7/11, and thereby reconfirming a short-term bounce. Longer term, Copper broke down below previous 5-month lows on 5/12/11. Weakness in Copper suggests doubts about the economic outlook, while strength suggests confidence in the future. Support 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: 4.533, 4.554, 4.6495, 4.6535, and 4.6575.

U.S. Treasury Bond nearest futures contract price fell below the low of the previous trading day on 7/7/11 but recovered much of its loss by the close. On 7/5/11, the Bond penetrated above a 5-day downtrend line, suggesting an oversold bounce. Support 122.05, 120.20, 119.15, 117.28, 117.04, 116.26, 115.15, 114.06, 113.04, and 112.15. Resistance 127.01, 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) bounced back to the neutral zone after breaking down below 9-month lows on 6/16/11. Absolute price of JNK also bounced back after breaking down below 9-month lows on 6/16/11.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell below the lows of the previous 6 months on 6/20/11, again reconfirming a significant downtrend. TIP/IEF entered a downtrend after peaking on 4/8/11. 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 reversed to the downside a day after rising above the highs of the previous 3 trading days on 7/6/11. USD has stabilized since making a low at 73.325 on 5/2/11, and that may be base building for a more significant upside reversal in a longer time frame. Support 74.505, 73.88, 73.515, 73.325, 72.86, and 70.80. Resistance 76.59, 76.87, 76.98, 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 40.9% Bulls versus 24.7% Bears as of 7/6/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio rose to 1.66, which is normal, with a 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.

S&P 500 Composite (SPX, 1,353.22) rose 14.00 points or 1.05% on Thursday 7/7/11.

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

S&P 500 Cash Index Potential Support
1330.92, low of 7/6/11
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

3.20% India PS, PIN
2.96% India Earnings WTree, EPI
2.42% Thailand MSCI iS, THD
2.31% Sweden Index, EWD
2.27% Turkey MSCI iS, TUR
2.18% Russia MV, RSX
2.16% Semiconductor SPDR, XSD
2.11% Commodity Tracking, DBC
2.00% Oil Fund PowerShares, DBO
1.99% Capital Markets KWB ST, KCE
1.97% Networking, IGN
1.91% Indonesia MV, IDX
1.90% Oil, Crude, U.S. Oil Fund, USO
1.90% Semiconductor iS IGW, SOXX
1.84% South Korea Index, EWY
1.82% Microcap Russell, IWC
1.77% Metals & Mining SPDR, XME
1.72% Australia Index, EWA
1.71% Basic Materials DJ US, IYM
1.62% Financial SPDR, XLF
1.61% Financials VIPERs, VFH
1.57% Financial Services DJ, IYG
1.55% South Africa Index, EZA
1.52% Value SmallCap Russell 2000, IWN
1.51% Financial DJ US, IYF
1.51% Energy SPDR, XLE
1.51% SmallCap Russell 2000, IWM
1.49% Materials SPDR, XLB
1.49% Pacific ex-Japan, EPP
1.48% Value SmallCap S&P 600 B, IJS
1.46% Singapore Index, EWS
1.41% SmallCap S&P 600, IJR
1.41% Growth BARRA Small Cap 600, IJT
1.41% Growth SmallCap R 2000, IWO
1.41% Info Tech VIPERs, VGT
1.39% Consumer Discretionary SPDR, XLY
1.38% Value SmallCap VIPERS, VBR
1.38% REIT Wilshire, RWR
1.38% Emerging Markets, EEM
1.38% Belgium Index, EWK
1.37% QQQ Nasdaq 100 Trust, QQQ
1.37% Technology DJ US, IYW
1.36% Water Resources, PHO
1.35% Energy DJ, IYE
1.34% Small Cap VIPERs, VB
1.34% Energy VIPERs, VDE
1.33% Energy & Nat Res iS GS, IGE
1.31% Growth SmallCap VIPERs, VBK
1.28% Energy Global, IXC
1.27% Realty Cohen & Steers, ICF
1.26% REIT VIPERs, VNQ
1.26% Real Estate US DJ, IYR
1.22% Technology SPDR, XLK
1.21% LargeCap Blend S&P=Weight R, RSP
1.21% Emerging VIPERs, VWO
1.20% Value MidCap Russell, IWS
1.18% Growth MidCap 400 B, IJK
1.18% Growth VIPERs, VUG
1.14% Agriculture DB PS, DBA
1.14% Silver Trust iS, SLV
1.12% Mexico Index, EWW
1.11% Growth 1000 Russell, IWF
1.11% LargeCap VIPERs, VV
1.10% S&P 500 iS LargeCap Blend, IVV
1.10% LargeCap Blend Russell 3000, IWV
1.09% Dividend Appreciation Vipers, VIG
1.08% Blend Total Market VIPERs, VTI
1.08% MidCap S&P 400 SPDRs, MDY
1.07% Growth S&P 500/BARRA, IVW
1.07% Value S&P 500 B, IVE
1.06% MidCap Russell, IWR
1.06% LargeCap Blend S&P 100, OEF
1.06% Industrial SPDR, XLI
1.04% LargeCap 1000 R, IWB
1.04% S&P 500 SPDRs LargeCap Blend, SPY
1.03% Growth MidCap Russell, IWP
1.03% MidCap S&P 400 iS, IJH
1.02% Pacific VIPERs, VPL
1.01% Germany Index, EWG
0.99% Value 1000 Russell, IWD
0.98% Value MidCap S&P 400 B, IJJ
0.98% Biotech SPDR, XBI
0.98% Transportation Av DJ, IYT
0.97% Value VIPERs, VTV
0.96% European VIPERs, VGK
0.94% Netherlands Index, EWN
0.93% Chile MSCI iS, ECH
0.92% EMU Europe Index, EZU
0.91% Global ex US ACWI iS, ACWX
0.90% China 25 iS, FXI
0.89% Value LargeCap Dynamic PS, PWV
0.89% Austria Index, EWO
0.89% Value EAFE MSCI, EFV
0.89% Silver Miners Global X, SIL
0.87% Homebuilders SPDR, XHB
0.87% Small Cap EAFE MSCI iS, SCZ
0.87% Growth EAFE MSCI, EFG
0.87% EAFE Index, EFA
0.85% France Index, EWQ
0.85% Malaysia Index, EWM
0.83% China LargeCap Growth G D H USX PS, PGJ
0.81% Emerging 50 BLDRS, ADRE
0.80% DIAMONDS (DJIA), DIA
0.80% Global 100, IOO
0.79% Europe 350 S&P Index, IEV
0.78% Spain Index, EWP
0.75% Dividend SPDR, SDY
0.75% Dividend DJ Select, DVY
0.70% Consumer Staples SPDR, XLP
0.67% Dividend High Yield Equity PS, PEY
0.67% WilderHill Clean Energy PS, PBW
0.66% Japan Index, EWJ
0.65% Italy Index, EWI
0.60% Canada Index, EWC
0.57% Bond, High-Yield Junk, JNK
0.50% United Kingdom Index, EWU
0.49% Dividend International, PID
0.48% Hong Kong Index, EWH
0.47% Telecom DJ US, IYZ
0.46% Taiwan Index, EWT
0.41% Utilities SPDR, XLU
0.40% Utilities VIPERs, VPU
0.39% Bond, High-Yield Corporate, HYG
0.36% Brazil Index, EWZ
0.31% Latin Am 40, ILF
0.28% Bond EmrgMkt JPM iS, EMB
0.20% Preferred Stock iS, PFF
0.16% Gold Shares S.T., GLD
0.13% Bond Ex-US Treas, BWX
0.06% Financial Preferred, PGF
0.03% Bond, Corp, LQD
-0.02% Bond Treasury Short-Term iS, SHV
-0.04% Bond, TIPS, TIP
-0.06% Health Care SPDR, XLV
-0.09% Bond, 1-3 Year Treasury, SHY
-0.15% Switzerland Index, EWL
-0.21% Frontier Markets Guggenheim , FRN
-0.21% Bond Muni ATM-Free S&P iS, MUB
-0.28% Bond, Aggregate, AGG
-0.30% Bond, 20+ Years Treasury, TLT
-0.38% Bond, 10 Year Treasury, IEF