The S&P 500 Composite (SPX, 1,123.53) fell 17.12 points or 1.50% on Friday, August 19, 2011, continuing its well-established downtrend.

Typically, there is no safe place to hide in a Dow Theory Primary Tide Bear Market. Even those stocks that have held up relatively well through most of the Bear Market eventually succumb to the relentless tide of selling.

Bear Markets typically unfold in three down moves in stock prices. The first move down occurs when far-sighted investors sell based on their experienced judgment that high valuations and booming corporate earnings are unsustainable. The second move down reflects panic as a now fearful public dumps at any price the same stock they just recently bought at much higher prices. The final move down results from distress selling and the need to raise cash.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
There is a strategy that gained this month and each of the past 3 months, while most other strategies lost —
NOW WITH A NO-RISK FREE TRIAL.
The Colby Global Markets Report
(click here for a no-risk free trial)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock Market Indicators

NASDAQ Composite/S&P 500 Relative Strength Ratio underperformed sharply since 8/12/11, breaking down below 2-month lows and the 20-, 50-, and 200-day SMAs. Absolute price broke down below 10-month closing price lows on 8/19/11 and remains bearish.

Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) remains bearish. The EEM/SPY Ratio has been in a downtrend since peaking on 10/14/10. EEM/SPY broke down below 5-month lows on 8/8/11, remains below its 50- and 200-day SMAs, and the 50-day SMA remains below the 200-day SMA. Absolute price has been weak since 5/2/11 and broke down below 13-month lows on 8/8/11.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) remains bearish. The EFA/SPY Ratio has been in a major long-term downtrend since peaking on 11/27/07. EFA/SPY remains below its 50- and 200-day SMAs, and the 50-day SMA remains below the 200-day SMA. Absolute price has been weak since 5/2/11 and broke down below 11-month lows on 8/8/11.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) has lost upside momentum since peaking on 8/8/11. Longer term, OEX/SPX fell below 28-year lows on 5/26/11, confirming a bearish major trend. Absolute price of OEX fell below the lows of the previous 11 months on 8/9/11 and remains bearish.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) remains bearish. IWM/SPY fell below 11-month lows on 8/19/11.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) remains bearish. MDY/SPY fell below 11-month lows on 8/8/11, confirming a bearish major trend.

Advisory Service Sentiment: There were 46.2% Bulls versus 23.7% Bears as of 8/17/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio was 1.95, down slightly from 2.00 the previous week–and still indicating surprising bullish complacency in the face of dramatic stock price weakness. The 20-year median is 1.56 and the mean is 1.64.

VIX Fear Index rose to 48.00 on 8/8/11, its highest level in 14 months, since 5/21/10. VIX is in an uptrend, and it is possible for VIX to rise much higher: VIX was 89.53 on 10/24/08 during the financial crisis. Options players tend to grow more fearful as stock prices decline, and the trend of stock prices is down. 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 Bear Market on 8/2/11, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed below their closing price lows of June, 2011.

The S&P 500 Composite (SPX, 1,123.53) fell 17.12 points or 1.50% on Friday, August 19, 2011, continuing its well-established downtrend.

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
1370.58, high of 5/2/11
1359.44, high of 5/10/11
1356.48, high of 7/7/11
1347.00, high of 7/21/11
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
1234.56, low of 8/3/11
1232.85, low of 12/16/10
1228.74, Fibonacci 61.8% of 2007-2009 range
1227.08, high of 11/5/10
1208.47, high of 8/17/2010

S&P 500 Cash Index Potential Support
1101.54, low of 8/9/2010
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
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fixed-Income Investments

Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) rose above the highs of the previous 2 years on 8/18/11, confirming a major uptrend. Although minor price consolidations and corrections are to be expected in bullish price trends, the dominant trend remains bullish. Support 108.10, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 116.92, and 123.15.

Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below 2-year lows and fell further below its 20-, 50-, and 200-day simple moving averages on 8/10/11, confirming a major bearish trend.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) has been weak since peaking on 4/8/11 and remains below 3 key SMAs, of 20, 50, and 200 days. This means fixed-income investors have been choosing the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs. Fixed-income investors are not worried about inflation.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tangible Assets, Commodities

U.S. dollar ETF (UUP) fell below 3-month lows on 8/17/11, suggesting a medium-term downtrend. The sideways Continuation Pattern (which suggests that the previous major long-term downtrend probably will resume) since the low of 20.84 on 5/4/11 now appears to be “rolling over”, that is, showing a bearish bias. Support 20.84. Resistance 21.41, 21.74, 21.86, and 22.21.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price rose above a downtrend line falling from the peak set on 3/4/11. The probability of another whipsaw appears high, however. Avoid.

Crude Oil, United States Oil ETF (USO) turned down again last week. Oil fell below the lows of the previous 2 years on 8/9/11, again confirming a major downtrend. Support 30.31, 26.28, 22.74. Resistance 34.63, 35.14, 39.25, 40.74, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) rose above all-time highs on 8/19/11, confirming its major long-term uptrend. Although minor price consolidations and corrections are to be expected in any trend, the dominant trend remains persistently bullish. In a world of too much debt, weak currencies, and self-serving politicians running amok, investors around the globe seek the safety of gold as the only forever-true money. Support: 159.68, 156.11, 154.10, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: none.

Gold Mining Stocks ETF/ Gold Shares ETF Relative Strength Ratio (GDX/GLD) fell below 29-month lows on 8/8/11, again confirming a bearish major trend for the long term.

Silver, iShares Silver Trust ETF (SLV) rose above 3-month highs on 8/19/11, confirming a medium-term price uptrend. Support 36.04, 35.29, 34.02, and 31.97. Resistance: 44.71 and 48.35.

Silver/Gold ETFs Ratio (SLV/GLD) has been mostly weak since peaking on 4/28/11. This means investors prefer Gold over Silver.

Copper, iPath DJ-UBS Copper TR Sub-Idx ETN (JJC ) fell below the lows of the previous 8 months on 8/10/11, again confirming a significant downtrend. Weakness in Copper suggests doubts about the economic outlook. Support 50.59 and 49.00. Resistance: 53.32, 54.29, 56.64, 57.48, 59.06, 60.04, and 61.69.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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
8.31% , INTU , INTUIT
5.93% , MRVL , MARVELL TECHNOLOGY
5.09% , SLV , Silver Trust iS, SLV
0.68% , BBH , Biotech H, BBH
4.02% , AN , AUTONATION
2.39% , JCP , JC PENNEY
3.61% , RIMM , RESEARCH IN MOTION LTD
3.28% , AMD , ADV MICRO DEV
1.96% , DBO , Oil Fund PowerShares, DBO
3.58% , SIL , Silver Miners Global X, SIL
1.80% , BIIB , BIOGEN IDEC
2.33% , ERTS , ELECTRONIC ARTS
1.01% , ZMH , ZIMMER HLDGS
1.78% , DBC , Commodity Tracking, DBC
3.77% , MZZ , Short 200% MidCap 400 PS, MZZ
1.25% , GLD , Gold Shares S.T., GLD
0.99% , LO , Lorillard, Inc. LO
0.93% , SRCL , Stericycle, SRCL
0.98% , YUM , YUM BRANDS
0.77% , SUN , SUNOCO
2.84% , NEM , NEWMONT MINING
1.10% , GPS , GAP
0.39% , GRMN , GARMIN LTD
0.73% , LEG , LEGGETT & PLATT
0.35% , NI , NISOURCE
3.68% , QID , Short 200% QQQ PS, QID
0.34% , TIP , Bond, TIPS, TIP
1.24% , IAU , Gold COMEX iS, IAU
0.27% , EMB , Bond EmrgMkt JPM iS, EMB
0.60% , GCI , GANNETT
0.07% , GVI , Bond Interm U.S. Gov, GVI
0.14% , NIHD , NII Holdings, Inc.
1.89% , MCD , MCDONALDS

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.16% , VOX , Telecom Services VIPERs, VOX
-11.69% , ADSK , AUTODESK
-3.92% , PXJ , Oil & Gas, PXJ
-2.01% , IGV , Software, IGV
-1.11% , JKK , Growth SmallCap iS M, JKK
-9.51% , ININ , Interactive Intelligence ININ
-2.72% , BDH , Broadband H, BDH
-1.99% , EWQ , France Index, EWQ
-20.03% , HPQ , HEWLETT PACKARD
-1.86% , IWW , Value LargeCap Russell 3000, IWW
-1.90% , JKJ , SmallCap Core iS M, JKJ
-1.91% , PWV , Value LargeCap Dynamic PS, PWV
-1.89% , ADRD , Developed 100 BLDRS, ADRD
-1.03% , ADRA , Asia 50 BLDRS, ADRA
-4.52% , STI , SUNTRUST BANKS
-1.70% , MTK , Technology MS sT, MTK
-1.93% , VO , MidCap VIPERs, VO
-1.30% , IYK , Consumer Non-Cyclical, IYK
-1.18% , VPL , Pacific VIPERs, VPL
-6.21% , KWT , Solar Energy MV, KWT
-1.75% , XSD , Semiconductor SPDR, XSD
-1.38% , JKI , Value MidCap iS M, JKI
-4.13% , QLGC , QLOGIC
-1.57% , IGE , Energy & Nat Res iS GS, IGE
-2.38% , PXQ , Networking, PXQ
-4.62% , MJN , Mead Johnson Nutrition
-2.79% , IYW , Technology DJ US, IYW
-1.73% , JKG , MidCap Blend Core iS M, JKG
-7.88% , RF , REGIONS FINAN
-2.20% , HHH , Internet H, HHH
-3.16% , HUM , HUMANA
-1.97% , EWU , United Kingdom Index, EWU
-0.84% , IDU , Utilities DJ, IDU
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
5.09% Silver Trust iS, SLV
3.58% Silver Miners Global X, SIL
1.96% Oil Fund PowerShares, DBO
1.78% Commodity Tracking, DBC
1.26% Oil, Crude, U.S. Oil Fund, USO
1.25% Gold Shares S.T., GLD
1.13% Agriculture DB PS, DBA
1.12% Turkey MSCI iS, TUR
0.81% Bond, 20+ Years Treasury, TLT
0.34% Bond, TIPS, TIP
0.27% Bond EmrgMkt JPM iS, EMB
0.11% Bond, 10 Year Treasury, IEF
0.07% Biotech SPDR, XBI
0.05% Bond, Aggregate, AGG
0.02% Bond Treasury Short-Term iS, SHV
0.00% Bond, 1-3 Year Treasury, SHY
-0.07% Malaysia Index, EWM
-0.11% Bond Ex-US Treas, BWX
-0.12% Bond, Corp, LQD
-0.19% South Africa Index, EZA
-0.23% Bond Muni ATM-Free S&P iS, MUB
-0.26% Health Care SPDR, XLV
-0.35% Preferred Stock iS, PFF
-0.44% Thailand MSCI iS, THD
-0.44% Mexico Index, EWW
-0.47% Consumer Staples SPDR, XLP
-0.49% Chile MSCI iS, ECH
-0.50% Bond, High-Yield Junk, JNK
-0.57% Singapore Index, EWS
-0.61% Utilities SPDR, XLU
-0.72% Financial Preferred, PGF
-0.76% India Earnings WTree, EPI
-0.82% Dividend DJ Select, DVY
-0.82% India PS, PIN
-0.82% Latin Am 40, ILF
-0.85% Dividend SPDR, SDY
-0.85% Utilities VIPERs, VPU
-0.87% Bond, High-Yield Corporate, HYG
-0.88% China 25 iS, FXI
-0.95% Japan Index, EWJ
-0.98% Networking, IGN
-1.01% Emerging 50 BLDRS, ADRE
-1.08% Dividend Appreciation Vipers, VIG
-1.13% Pacific ex-Japan, EPP
-1.18% Pacific VIPERs, VPL
-1.24% Australia Index, EWA
-1.24% Emerging Markets, EEM
-1.32% Small Cap EAFE MSCI iS, SCZ
-1.38% Dividend High Yield Equity PS, PEY
-1.42% China LargeCap Growth G D H USX PS, PGJ
-1.42% Belgium Index, EWK
-1.45% Consumer Discretionary SPDR, XLY
-1.45% Brazil Index, EWZ
-1.47% Telecom DJ US, IYZ
-1.50% Growth EAFE MSCI, EFG
-1.51% S&P 500 iS LargeCap Blend, IVV
-1.52% Emerging VIPERs, VWO
-1.52% Canada Index, EWC
-1.54% Industrial SPDR, XLI
-1.54% SmallCap S&P 600, IJR
-1.54% Value MidCap Russell, IWS
-1.55% Microcap Russell, IWC
-1.57% Energy & Nat Res iS GS, IGE
-1.58% Switzerland Index, EWL
-1.60% Materials SPDR, XLB
-1.61% Value S&P 500 B, IVE
-1.63% Global ex US ACWI iS, ACWX
-1.63% S&P 500 SPDRs LargeCap Blend, SPY
-1.65% LargeCap Blend S&P=Weight R, RSP
-1.66% Growth BARRA Small Cap 600, IJT
-1.66% Dividend International, PID
-1.67% Hong Kong Index, EWH
-1.67% Value VIPERs, VTV
-1.67% Water Resources, PHO
-1.68% Growth 1000 Russell, IWF
-1.70% Value SmallCap S&P 600 B, IJS
-1.70% Growth SmallCap R 2000, IWO
-1.70% EAFE Index, EFA
-1.71% Transportation Av DJ, IYT
-1.72% Russia MV, RSX
-1.72% Growth MidCap Russell, IWP
-1.73% Frontier Markets Guggenheim , FRN
-1.74% LargeCap VIPERs, VV
-1.74% LargeCap Blend Russell 3000, IWV
-1.75% LargeCap 1000 R, IWB
-1.75% Semiconductor SPDR, XSD
-1.75% MidCap Russell, IWR
-1.75% Metals & Mining SPDR, XME
-1.76% Growth S&P 500/BARRA, IVW
-1.76% Value 1000 Russell, IWD
-1.76% SmallCap Russell 2000, IWM
-1.77% MidCap S&P 400 SPDRs, MDY
-1.77% Energy SPDR, XLE
-1.77% Growth VIPERs, VUG
-1.78% Realty Cohen & Steers, ICF
-1.79% LargeCap Blend S&P 100, OEF
-1.79% Blend Total Market VIPERs, VTI
-1.80% Basic Materials DJ US, IYM
-1.81% QQQ Nasdaq 100 Trust, QQQ
-1.82% Value EAFE MSCI, EFV
-1.83% Capital Markets KWB ST, KCE
-1.83% Netherlands Index, EWN
-1.83% Taiwan Index, EWT
-1.84% Semiconductor iS IGW, SOXX
-1.84% Small Cap VIPERs, VB
-1.84% REIT Wilshire, RWR
-1.87% Value MidCap S&P 400 B, IJJ
-1.88% MidCap S&P 400 iS, IJH
-1.89% Growth SmallCap VIPERs, VBK
-1.89% Value SmallCap Russell 2000, IWN
-1.90% Value SmallCap VIPERS, VBR
-1.91% Financials VIPERs, VFH
-1.91% Value LargeCap Dynamic PS, PWV
-1.91% Global 100, IOO
-1.92% REIT VIPERs, VNQ
-1.92% Spain Index, EWP
-1.92% Sweden Index, EWD
-1.94% Energy Global, IXC
-1.94% European VIPERs, VGK
-1.96% Growth MidCap 400 B, IJK
-1.96% DIAMONDS (DJIA), DIA
-1.97% Financial DJ US, IYF
-1.97% United Kingdom Index, EWU
-1.99% France Index, EWQ
-1.99% Energy VIPERs, VDE
-2.00% Real Estate US DJ, IYR
-2.00% Energy DJ, IYE
-2.01% Europe 350 S&P Index, IEV
-2.02% Financial SPDR, XLF
-2.15% Homebuilders SPDR, XHB
-2.20% Austria Index, EWO
-2.28% Financial Services DJ, IYG
-2.34% EMU Europe Index, EZU
-2.43% Technology SPDR, XLK
-2.61% Info Tech VIPERs, VGT
-2.69% Indonesia MV, IDX
-2.73% Germany Index, EWG
-2.79% Technology DJ US, IYW
-2.94% Italy Index, EWI
-3.01% WilderHill Clean Energy PS, PBW
-3.47% South Korea Index, EWY