The S&P 500 Composite (SPX, 1,178.81) rose 6.17 points or 0.53% on Friday, August 12, 2011. Stock prices opened higher but, after a dozen or so ups and downs, closed well below the mid-session high.

NYSE trading volume fell 29% below Thursday ‘s average pace. Declining volume on rallies might suggest some hesitation by large players to chase prices higher.

The 2-day bounce left much to be desired, in my opinion. Although minor price consolidations and corrections against the larger trend are normal and expected, the dominant trend remains persistently bearish.

Since its intraday low on 1101.54 on 8/9/11, the S&P 500 has recovered slightly more than one-third of its loss from the most recent peak at 1346.10 on 7/22/11. That is a sufficient bounce for a recovery against the larger trend.

Before the open on Thursday, August 11, 2011, I wrote: “The high-volume price drops in recent days might add up to a temporary selling climax that could clear the decks for recovery attempts in days ahead. Because it is now a Dow Theory Primary Tide Bear Market, however, playing Minor Ripple rally attempts against the Primary Tide probably will be difficult and risky. In days ahead, I would not be surprised to see two-way volatility as the bulls and bears struggle for dominance in an atmosphere of substantial uncertainty.”

Well, we had our “Minor Ripple rally attempts against the Primary Tide”, and now it is time to implement strategy for the dominant downtrend.
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Stock Market Indicators

NASDAQ Composite/S&P 500 Relative Strength Ratio rebounded in recent days. The Ratio’s 50-day SMA crossed above the 200-day SMA on 8/10/11, and the Ratio is above both SMAs, which might be encouraging for the long-term trend. Absolute price is another story, however, since price broke down below 10-month lows on 8/9/11 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, and it 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) rose above the highs of the previous 12 months on 8/8/11, confirming a relatively modest recovery in comparison to the previous major decline. 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 10-month lows on 8/8/11.

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 47.3% Bulls versus 23.7% Bears as of 8/10/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio actually rose to 2.00, up from 1.87 the previous week, 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, 1,178.81) rose 6.17 points or 0.53% on Friday, August 12, 2011.

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

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
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Fixed-Income Investments

Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) rose above the highs of the previous 11 months on 8/9/11, again confirming a significant uptrend. Although minor price consolidations and corrections are to be expected in bullish price trends, the dominant trend remains bullish. Support 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 109.37, 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; and so, these investors are not worried about inflation.
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) has been fluctuating sideways since hitting a low of 20.84 on 5/4/11. This chart could turn into either a Continuation Pattern (meaning that the previous downtrend might resume) or a Reversal Pattern (although a change from a downtrend to an uptrend is less likely, theoretically). For now, let’s just say USD is in no man’s land and let it be. Support 20.91 and 20.84. Resistance 21.74, 21.86, and 22.21.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) topped out on 3/4/11 and remains bearish.

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

Gold, SPDR Gold Shares ETF (GLD) fell below the previous day’s intraday low on 8/12/11 but rebounded to close above that low and near the high of the day. GLD rose above all-time highs on 8/10/11, 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: 175.13.

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) fell below 3-week lows on 8/9/11, confirming a short-term price pullback. Longer term, the price action in Silver appears choppy and erratic since the spike top at 48.35 on 4/28/11. Support 36.04, 35.29, 34.02, and 31.97. Resistance: 38.60, 41.19, 44.71, and 48.35.

Silver/Gold ETFs Ratio (SLV/GLD) fell below 6-month lows on 8/9/11, suggesting a significant downtrend. 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: 54.29, 56.64, 57.48, 59.06, 60.04, and 61.69.
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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
4.29% , EWK , Belgium Index, EWK
1.49% , IOO , Global 100, IOO
9.08% , NWL , NEWELL RUBBER
3.29% , ADRU , Europe 100 BLDRS, ADRU
3.35% , EWP , Spain Index, EWP
3.45% , PETM , PETsMART Inc
3.33% , EWQ , France Index, EWQ
4.61% , JWN , NORDSTROM
2.16% , EWO , Austria Index, EWO
0.40% , BWX , Bond Ex-US Treas, BWX
1.52% , CPB , CAMPBELL SOUP
5.10% , URBN , Urban Outfitters Inc.
0.80% , JKE , Growth LargeCap iS M, JKE
1.17% , RFG , Growth MidCap S&P 400, RFG
1.17% , VCR , Consumer D. VIPERs, VCR
4.93% , A , AGILENT TECH
2.25% , LNCR , Lincare Holdings Inc
3.51% , CHRW.O , CH Robinson Worldwide Inc, CHRWD
3.34% , CHKP , Check Point Software Technologies Ltd
3.42% , RIG , TRANSOCEAN
2.70% , EL , Estee Lauder
2.02% , EWU , United Kingdom Index, EWU
3.42% , ADRA , Asia 50 BLDRS, ADRA
4.49% , PLL , PALL
1.41% , PIV , Value Line Timeliness MidCap Gr, PIV
1.11% , EMN , EASTMAN CHEM
3.20% , SHW , SHERWIN WILLIAMS
1.74% , TAP , ADOLPH COORS STK B, TAP
1.68% , PDCO , Patterson Dental Company
1.79% , MDP , MEREDITH
0.93% , JKD , LargeCap Blend Core iS M, JKD
3.89% , UTX , UNITED TECH
2.91% , BIIB , BIOGEN IDEC

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.02% , TTH , Telecom H, TTH
-18.21% , DDS , DILLARD STK A
-16.67% , DV , DeVry, Inc.
-3.95% , NVDA , NVIDIA
-0.54% , UTH , Utilities H, UTH
-5.09% , BBY , BEST BUY
-0.82% , PZI , Micro Cap Zachs, PZI
-4.44% , RF , REGIONS FINAN
-0.64% , NY , Value LargeCap NYSE 100 iS, NY
-0.87% , IYF , Financial DJ US, IYF
-1.04% , JCP , JC PENNEY
-1.60% , CTXS , CITRIX SYSTEMS
-7.25% , MS , MORGAN STANLEY
-3.34% , ZION , ZIONS
-0.23% , RPV , Value S&P 500, RPV
-0.44% , FPX , IPOs, First Tr IPOX-100, FPX
-0.80% , LNC , LINCOLN NATL
-2.13% , ISIL , INTERSIL CORP
-0.13% , JNJ , JOHNSON&JOHNSON
-0.54% , GD , GENERAL DYNAMICS
-0.06% , PKB , Building & Construction, PKB
-0.15% , THD , Thailand MSCI iS, THD
-0.14% , DBC , Commodity Tracking, DBC
-0.11% , RFV , Value MidCap S&P 400, RFV
-1.45% , C , CITIGROUP
-0.70% , NCR , NCR
-0.01% , SHV , Bond Treasury Short-Term iS, SHV
-0.10% , RWR , REIT Wilshire, RWR
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
4.29% Belgium Index, EWK
3.35% Spain Index, EWP
3.33% France Index, EWQ
3.10% EMU Europe Index, EZU
2.88% Italy Index, EWI
2.57% Germany Index, EWG
2.51% Europe 350 S&P Index, IEV
2.31% Biotech SPDR, XBI
2.16% Austria Index, EWO
2.08% Netherlands Index, EWN
2.02% United Kingdom Index, EWU
1.98% Bond, 20+ Years Treasury, TLT
1.95% Industrial SPDR, XLI
1.80% European VIPERs, VGK
1.67% Switzerland Index, EWL
1.66% Singapore Index, EWS
1.64% Homebuilders SPDR, XHB
1.59% Networking, IGN
1.49% Global 100, IOO
1.48% Value EAFE MSCI, EFV
1.39% DIAMONDS (DJIA), DIA
1.37% Growth S&P 500/BARRA, IVW
1.30% Transportation Av DJ, IYT
1.29% Growth MidCap Russell, IWP
1.27% Growth SmallCap VIPERs, VBK
1.23% Consumer Discretionary SPDR, XLY
1.21% Growth SmallCap R 2000, IWO
1.20% Consumer Staples SPDR, XLP
1.19% Brazil Index, EWZ
1.16% Sweden Index, EWD
1.16% Growth EAFE MSCI, EFG
1.15% EAFE Index, EFA
1.14% Dividend Appreciation Vipers, VIG
1.14% Bond, Corp, LQD
1.14% Growth 1000 Russell, IWF
1.10% Frontier Markets Guggenheim , FRN
1.10% Dividend International, PID
1.08% Small Cap EAFE MSCI iS, SCZ
1.07% Financial Preferred, PGF
1.04% Water Resources, PHO
1.03% Growth VIPERs, VUG
0.99% Health Care SPDR, XLV
0.98% Preferred Stock iS, PFF
0.98% Growth BARRA Small Cap 600, IJT
0.98% WilderHill Clean Energy PS, PBW
0.97% Global ex US ACWI iS, ACWX
0.96% Energy Global, IXC
0.94% LargeCap 1000 R, IWB
0.89% Technology DJ US, IYW
0.89% QQQ Nasdaq 100 Trust, QQQ
0.88% Basic Materials DJ US, IYM
0.88% Metals & Mining SPDR, XME
0.85% Silver Trust iS, SLV
0.84% Growth MidCap 400 B, IJK
0.81% Info Tech VIPERs, VGT
0.80% Energy VIPERs, VDE
0.80% Latin Am 40, ILF
0.77% MidCap Russell, IWR
0.76% LargeCap Blend Russell 3000, IWV
0.76% Small Cap VIPERs, VB
0.76% LargeCap Blend S&P 100, OEF
0.74% Energy SPDR, XLE
0.73% LargeCap VIPERs, VV
0.71% Technology SPDR, XLK
0.70% Bond, 10 Year Treasury, IEF
0.68% Energy DJ, IYE
0.68% S&P 500 iS LargeCap Blend, IVV
0.67% S&P 500 SPDRs LargeCap Blend, SPY
0.67% SmallCap S&P 600, IJR
0.66% Blend Total Market VIPERs, VTI
0.64% Materials SPDR, XLB
0.63% Bond Muni ATM-Free S&P iS, MUB
0.63% Malaysia Index, EWM
0.62% South Africa Index, EZA
0.62% SmallCap Russell 2000, IWM
0.62% Energy & Nat Res iS GS, IGE
0.57% Australia Index, EWA
0.57% Bond, TIPS, TIP
0.56% Silver Miners Global X, SIL
0.55% LargeCap Blend S&P=Weight R, RSP
0.55% MidCap S&P 400 iS, IJH
0.53% Hong Kong Index, EWH
0.53% Chile MSCI iS, ECH
0.52% MidCap S&P 400 SPDRs, MDY
0.51% Russia MV, RSX
0.50% Bond EmrgMkt JPM iS, EMB
0.49% Dividend SPDR, SDY
0.45% Emerging 50 BLDRS, ADRE
0.44% Bond, Aggregate, AGG
0.43% Telecom DJ US, IYZ
0.40% Bond Ex-US Treas, BWX
0.40% Value LargeCap Dynamic PS, PWV
0.38% Pacific ex-Japan, EPP
0.35% Value S&P 500 B, IVE
0.31% Agriculture DB PS, DBA
0.31% Value VIPERs, VTV
0.30% Value SmallCap S&P 600 B, IJS
0.27% Value 1000 Russell, IWD
0.22% Value MidCap Russell, IWS
0.19% Value SmallCap VIPERS, VBR
0.13% Value SmallCap Russell 2000, IWN
0.13% Value MidCap S&P 400 B, IJJ
0.13% Dividend DJ Select, DVY
0.04% China LargeCap Growth G D H USX PS, PGJ
0.01% Bond, 1-3 Year Treasury, SHY
-0.01% Bond Treasury Short-Term iS, SHV
-0.02% REIT VIPERs, VNQ
-0.05% Emerging Markets, EEM
-0.06% Pacific VIPERs, VPL
-0.07% Emerging VIPERs, VWO
-0.10% REIT Wilshire, RWR
-0.14% Commodity Tracking, DBC
-0.15% Mexico Index, EWW
-0.15% Real Estate US DJ, IYR
-0.15% Thailand MSCI iS, THD
-0.17% Canada Index, EWC
-0.19% Microcap Russell, IWC
-0.21% Oil, Crude, U.S. Oil Fund, USO
-0.22% Semiconductor SPDR, XSD
-0.29% Bond, High-Yield Junk, JNK
-0.31% Oil Fund PowerShares, DBO
-0.37% Dividend High Yield Equity PS, PEY
-0.39% Realty Cohen & Steers, ICF
-0.41% Semiconductor iS IGW, SOXX
-0.46% Gold Shares S.T., GLD
-0.47% Bond, High-Yield Corporate, HYG
-0.51% Turkey MSCI iS, TUR
-0.56% Utilities VIPERs, VPU
-0.60% Utilities SPDR, XLU
-0.70% Financial SPDR, XLF
-0.84% China 25 iS, FXI
-0.87% Financial DJ US, IYF
-0.94% Taiwan Index, EWT
-0.96% Japan Index, EWJ
-1.10% Financials VIPERs, VFH
-1.21% India Earnings WTree, EPI
-1.28% Financial Services DJ, IYG
-1.31% Indonesia MV, IDX
-1.45% South Korea Index, EWY
-1.89% India PS, PIN
-1.90% Capital Markets KWB ST, KCE