Dow Jones Transportation Average absolute price rose above 2-year highs and remains bullish. Both Airlines and Rails were strong.

Industrial SPDR (XLI), a stock sector ETF, absolute price rose above 2-year highs and remains bullish.

Consumer Staples SPDR stock sector Relative Strength Ratio (XLP/SPY) fell below 2-year lows and remains bearish. Absolute price fell below 4-week lows and has been trending lower since 12/16/10.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell further below 6-month lows and remains neutral at this time, although it is rapidly heading toward bearish territory.

Commodities (oil, gold, silver, copper, CRB index, etc.) have pulled back in normal short-term corrections but remain in bullish major long-term trends.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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
4.71% , IPG , INTERPUBLIC GRP
6.42% , KBH , KB HOME
5.67% , LLL , L-3 COMMS HLDGS
1.76% , FLEX , Flextronics International Ltd
5.13% , GT , GOODYEAR TIRE
4.62% , PHM , PULTE HOMES
3.54% , WYNN , Wynn Resorts L
2.05% , HGSI , Human Genome Sciences Inc
2.84% , UNP , UNION PACIFIC
2.36% , CSX , CSX
3.23% , BHI , BAKER HUGHES
1.51% , HRB , H&R BLOCK
0.51% , MZZ , Short 200% MidCap 400 PS, MZZ
1.63% , TDC , Teradata Corporation, TDC
1.59% , WMB , WILLIAMS
0.60% , TLH , Bond 10-20 Year US Treas, TLH
1.94% , NSC , NORFOLK SOUTHERN
2.57% , SBUX , STARBUCKS
0.50% , ITF , Japan LargeCap Blend TOPIX 150, ITF
0.91% , TYC , TYCO INTL
0.78% , IYT , Transportation Av DJ, IYT
2.74% , MRO , MARATHON OIL
3.22% , CEG , CONSTELL ENERGY
1.32% , RFMD , RF Micro Devices Inc
2.45% , MRVL , MARVELL TECHNOLOGY
0.28% , SOXX , Semiconductor iS IGW, SOXX
1.77% , MTG , MGIC INVESTMENT
0.73% , PPA , Aerospace & Defense, PPA
0.73% , FISV , FISERV
1.67% , SYY , SYSCO
1.58% , WLP , WELLPOINT HEALTH
0.56% , MOLX , MOLEX
2.06% , OIH , Oil Services H, OIH

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-12.90% , LIZ , LIZ CLAIRBORNE
-6.95% , JNY , JONES APPAREL
-5.87% , SVU , SUPERVALU
-10.46% , ZEUS , Olympic Steell, ZEUS
-0.70% , NY , Value LargeCap NYSE 100 iS, NY
-0.86% , EWK , Belgium Index, EWK
-4.56% , LO , Lorillard, Inc. LO
-0.53% , IXN , Technology Global, IXN
-3.23% , NVLS , NOVELLUS SYS
-4.94% , X , US STEEL CORP
-2.55% , EBAY , EBAY
-5.56% , SNV , SYNOVUS
-2.02% , WFC , WELLS FARGO
-2.85% , DGX , QUEST DIAG
-1.89% , JPM , J P MORGAN CHASE
-0.29% , ISI , LargeCap Blend S&P 1500 iS, ISI
-3.77% , APOL , APOLLO GROUP
-2.83% , JNS , JANUS CAPITAL
-1.69% , FEZ , Euro STOXX 50, FEZ
-1.78% , ERIC.O , LM Ericsson Telephone Company
-1.40% , CAH , CARDINAL HEALTH
-0.90% , KCE , Capital Markets KWB ST, KCE
-0.90% , XLF , Financial SPDR, XLF
-1.32% , RKH , Bank Regional H, RKH
-1.93% , NTRS , NORTHERN TRUST
-0.61% , RFV , Value MidCap S&P 400, RFV
-0.63% , HHH , Internet H, HHH
-3.12% , DPS , Dr Pepper Snapple Group
-2.79% , ECH , Chile MSCI iS, ECH
-4.18% , JCP , JC PENNEY
-2.19% , LM , LEGG MASON
-1.79% , TUP , TUPPERWARE
-1.75% , BSX , BOSTON SCIENT

9 major U.S. stock sectors ranked in order of long-term relative strength:

Energy (XLE) Bullish, Over Weight. The Relative Strength Ratio (XLE/SPY) rose further above 14-month highs on 12/31/10 highs, reconfirming its preexisting bullish major trend. Absolute price of XLE rose above 2-year highs on 1/3/11, reconfirming its preexisting bullish major trend. Support 65.25, 65.03, 60.96, 60.21, 57.70, 55.68, 53.22, 50.33, 48.56, 46.16, and 43.66. Resistance 69.95 and 78.10.

Materials (XLB) Bullish, Over Weight. The Relative Strength Ratio (XLB/SPY) rose above 11-month highs on 12/30/10 and remains bullish. Absolute price rose above 2-year highs on 1/3/11 and remains bullish. Support 34.20, 33.70, 32.36, 29.88, 29.43, and 27.67. Resistance 40.15 and 41.06.

Industrial (XLI) Bullish, Over Weight. The Relative Strength Ratio (XLI/SPY) rose above 2-year highs on 12/16/10 and remains bullish. Absolute price rose above 2-year highs on 1/7/11 and remains bullish. Support 31.82, 31.58, 30.79, 30.51, 30.32, 29.77, and 27.67. Resistance 36.16.

Consumer Discretionary (XLY) Neutral, Market Weight. The Relative Strength Ratio (XLY/SPY) crossed below its 50-day SMA on 12/27/10, thereby turning neutral. Absolute price rose above 3-year highs on 1/5/11 and remains bullish. Support 37.29, 37.15, 36.61, 36.13, 35.32, 35.02, 34.78, 33.94, 33.11, 32.66, 31.70, 29.80, 28.64, 28.21, and 26.62. Resistance 39.09, 40.13, and 40.70.

Technology (XLK) Neutral, Market Weight. The Relative Strength Ratio (XLK/SPY) fell below 8-week lows on 12/16/10 and turned neutral for the secondary trend. This RS ratio rose above 8-year highs on 11/3/10, which was a bullish confirmation of the primary uptrend. Absolute price of XLK rose above 2-year highs on 1/6/11 and remains bullish. Support 23.87, 23.74, 23.64, 23.56, 22.68, 22.53, 21.60, 20.01, and 19.51. Resistance 25.69, 27.43, 27.63, and 28.60.

Financial (XLF) Neutral, Market Weight. The Relative Strength Ratio (XLF/SPY) rose above its 50-day SMA on 12/8/10, thereby turning neutral. Absolute price turned bullish as of 12/22/10 when the rising 50-day SMA crossed above the rising 200-day SMA. Support 15.39, 15.08, 14.36, 14.25, 14.20, 13.29, and 13.08. Resistance 16.90, 17.12, 17.16, and 17.87.

Health Care (XLV) Bearish, Under Weight. The Relative Strength Ratio (XLV/SPY) fell below 2-year lows on 1/3/11 and remains bearish, as it has been most of the time since peaking on 2/23/09. Absolute price rose above 7-month highs on 1/6/11 and remains bullish. Support 30.14, 30.11, 29.87, 28.00, 27.49. Resistance 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.

Consumer Staples (XLP) Bearish, Under Weight. The Relative Strength Ratio (XLP/SPY) fell below 2-year lows on 1/7/11 and remains bearish. Absolute price fell below 4-week lows on 1/7/11 and has been trending lower since 12/16/10. Support 28.95, 28.22, 28.04, 27.76, 27.63, 27.46, 26.34, 25.30, and 24.95. Resistance 29.58 and 30.29.

Utilities (XLU) Bearish, Under Weight. The Relative Strength Ratio (XLU/SPY) fell below 5-year lows on 1/5/11 and remains bearish. Absolute price of XLU rose above its 50-day SMA on 1/3/11 and is technically bullish. Support 30.51, 29.66, 27.91, 27.44, and 25.76. Resistance 32.11 and 32.40.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell further below 4-month lows on 12/28/10 and remains neutral

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell further below 6-month lows on 1/7/11 and remains neutral at this time, although it is rapidly heading toward bearish territory.

NASDAQ Composite/S&P 500 Relative Strength Ratio crossed above 6-week highs and its 50-day SMA on 1/6/11, turning bullish. The ratio rose above 9-year highs on 11/26/10, confirming a bullish Primary uptrend for the longer-term.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) rose above its 50-day SMA on 1/4/11, turning neutral technically. The ratio fell below 28-year lows on 12/3/10, confirming a major bearish trend. Big caps have been relatively out of favor for more than 10 years, since 3/29/2000.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) rose above 20-year highs on 12/21/10 and remains bullish. Absolute price closed above 2-year closing price highs on 12/27/10 and remains bullish.

The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose above 15-year highs on 12/17/10 and remains bullish. Absolute price closed above 2-year closing price highs on 1/3/11, and remains bullish.

CRB Index of commodity prices rose above 2-year highs on 1/3/11, thereby reconfirming its preexisting bullish major trend.

Crude Oil nearest futures contract price fell below 5-week lows on 1/7/11, confirming a minor, short-term shakeout. Oil rose above 2-year highs on 1/3/11, thereby reconfirming its preexisting bullish major trend. Support 87.43, 86.83, 83.55, 80.28, 80.06, 79.84, 79.25, 78.86, 72.63, 70.76, 70.35, 69.51, 68.59, 67.15, 65.05, and 64.24. Resistance 98.65 and 102.84.

Gold nearest futures contract price fell below 6-week lows on 1/7/11, confirming a minor, short-term shakeout. Gold rose above previous all-time highs and confirmed a bullish major trend on 12/7/10. Support 1361.6, 1352.6, 1329.0, 1325.5, 1317.5, 1297.0, 1274.8, 1270.5, 1232.4, 1210.9, 1191.5, and 1155.6. Resistance: 1432.5.

Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) fell below 2-month lows on 1/6/11, confirming a bearish trend for the intermediate term. The ratio has been trending lower since making a top on 12/6/10.

Silver nearest futures contract price fell below 4-week lows on 1/7/11, confirming a minor, short-term shakeout. Silver rose above previous 30-year highs on 1/3/11, thereby confirming its preexisting bullish major trend for the long term.

Silver/Gold Ratio rose above 3-year highs on 12/31/10, again confirming a bullish trend. Silver has outperformed Gold substantially since 8/20/10.

Copper nearest futures contract price fell below 8-day lows on 1/7/11, confirming a minor, short-term shakeout. Copper rose above multi-year highs on 1/3/11, thereby reconfirming its preexisting bullish major trend. Strength in Copper suggests confidence about prospects for the world economy, while weakness in Copper suggests doubts. Support 4.204, 4.08, 3.9795, 3.6065, 3.3930, 3.1775, 2.9285, 2.8555, 2.8445, and 2.72. Resistance: none.

U.S. Treasury Bond nearest futures contract price has turned choppy and still looks uncertain for the short term. The bond contract fell below the lows of the previous 7 months on 12/15/10, confirming a bearish major trend. Support 118.21, 118.12, 115.15, 114.06, 113.04, and 112.15. Resistance 121.20, 122.02, 123.26, 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) rose above 8-month highs on 12/28/10 and remains bullish. JNK absolute price rose above 6-week highs on 12/27/10, which is bullish for the short term. Price rose above 2-year highs on 11/4/10 and remains bullish for the longer term.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) is in a rising trend since making a low on 8/24/10, even as absolute price of TIP has declined. A rising Relative Strength Ratio implies that fixed-income investors have been selling inflation protected Notes at a relatively more subdued pace compared to the U.S. Treasury 7-10 Year Note (IEF) over the past 4 months.

The U.S. dollar nearest futures contract price rose above 5-week highs on 1/7/11. USD may encounter resistance near its 200-day SMA, which stands near chart resistance at 81.525 to 82.02. Longer term, USD fell below 11-month lows on 11/3/10, thereby confirming a bearish long-term price trend. Support 78.01, 75.23, 74.27, and 70.80. Resistance 81.525, 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 54.5% Bulls versus 20.5% Bears as of 1/5/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio stands at 2.66, which is nearly two standard deviations above the long-term, 20-year mean. This is not overly excessive bullish sentiment in the second year of a bull market. Bullish Sentiment tends to rise in November and December every year. The ratio was as high as it is now or higher in Decembers of each year 2003, 2004, 2005, and 2006, and none of these “high” readings led to bear markets. The 20-year range is 0.41 to 3.74, the median is 1.54, and the mean is 1.61.

VIX Fear Index fell below 8-month lows to 15.40 on 12/23/10, reflecting diminishing fear among options players. VIX is near its 3-year low of 15.23 set on 4/12/10. Before we take the current level of VIX as a sell signal, however, we might consider that VIX was as low as 9.89 on 1/24/07, nearly 10 months before the final tops in the price indexes. 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 reconfirmed a Primary Tide Bull Market as of 1/3/11, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above closing price highs of the previous 2-years. The Dow Theory originally signaled the current 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. While other Dow Theorists were fooled by the big downside Secondary Reaction in May and June 2010 and called a “Bear Market”, my interpretation of the Dow Theory has been steadily Bullish on the Primary Tide Trend every day since 7/23/09.

S&P 500 Composite (SPX, 1,271.50) consolidated gains after rising above the highs of the previous 2-years on 1/5/11, and thereby confirming the Dow Theory Bullish Primary Tide Trend.

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
1366.59, high of 6/17/2008
1335.63, high of 6/25/2008
1313.15, high of 8/11/2008

S&P 500 Cash Index Potential Support
1251.48, low of 12/27/10
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
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

0.78% Transportation Av DJ, IYT
0.72% Energy SPDR, XLE
0.67% Bond, 10 Year Treasury, IEF
0.64% Energy DJ, IYE
0.62% Energy VIPERs, VDE
0.54% South Korea Index, EWY
0.53% Utilities VIPERs, VPU
0.53% Bond, 20+ Years Treasury, TLT
0.52% Semiconductor SPDR, XSD
0.50% Bond, Corp, LQD
0.44% Homebuilders SPDR, XHB
0.39% Natural Resource iS GS, IGE
0.39% Japan Index, EWJ
0.36% Energy Global, IXC
0.36% Utilities SPDR, XLU
0.34% Malaysia Index, EWM
0.32% Bond, Aggregate, AGG
0.32% Bond, TIPS, TIP
0.28% Semiconductor iS IGW, SOXX
0.21% Bond EmrgMkt JPM iS, EMB
0.20% Industrial SPDR, XLI
0.19% Agriculture DB PS, DBA
0.14% Bond, 1-3 Year Treasury, SHY
0.09% Bond Muni ATM-Free S&P iS, MUB
0.06% Canada Index, EWC
0.04% REIT VIPERs, VNQ
0.00% Bond Treasury Short-Term iS, SHV
0.00% Financial Preferred, PGF
0.00% Singapore Index, EWS
0.00% WilderHill Clean Energy PS, PBW
-0.03% Oil, Crude, U.S. Oil Fund, USO
-0.03% Mexico Index, EWW
-0.04% Real Estate US DJ, IYR
-0.05% Growth VIPERs, VUG
-0.05% Consumer Discretionary SPDR, XLY
-0.06% Dividend Appreciation Vipers, VIG
-0.06% Health Care SPDR, XLV
-0.08% REIT Wilshire, RWR
-0.09% Pacific VIPERs, VPL
-0.09% Growth LargeCap NASDAQ 100, QQQQ
-0.09% Materials SPDR, XLB
-0.10% Preferred Stock iS, PFF
-0.11% Realty Cohen & Steers, ICF
-0.12% MidCap Russell, IWR
-0.14% Growth 1000 Russell, IWF
-0.16% LargeCap 1000 R, IWB
-0.17% Growth MidCap Russell, IWP
-0.17% LargeCap Blend Russell 3000, IWV
-0.18% DIAMONDS (DJIA), DIA
-0.18% LargeCap VIPERs, VV
-0.18% S&P 500 iS LargeCap Blend, IVV
-0.18% Growth S&P 500/BARRA, IVW
-0.19% Gold Shares S.T., GLD
-0.19% LargeCap Blend S&P=Weight R, RSP
-0.20% S&P 500 SPDRs LargeCap Blend, SPY
-0.22% Value MidCap Russell, IWS
-0.23% LargeCap Blend S&P 100, OEF
-0.23% Blend Total Market VIPERs, VTI
-0.23% Growth MidCap 400 B, IJK
-0.23% Biotech SPDR, XBI
-0.24% Value VIPERs, VTV
-0.24% Info Tech VIPERs, VGT
-0.25% Basic Materials DJ US, IYM
-0.25% Italy Index, EWI
-0.25% MidCap S&P 400 SPDRs, MDY
-0.25% Value MidCap S&P 400 B, IJJ
-0.26% Growth BARRA Small Cap 600, IJT
-0.26% Value S&P 500 B, IVE
-0.27% MidCap S&P 400 iS, IJH
-0.29% Value 1000 Russell, IWD
-0.29% China LargeCap Growth G D H USX PS, PGJ
-0.30% Growth EAFE MSCI, EFG
-0.32% Technology DJ US, IYW
-0.32% Value LargeCap Dynamic PS, PWV
-0.37% Australia Index, EWA
-0.37% Commodity Tracking, DBC
-0.38% Small Cap EAFE MSCI iS, SCZ
-0.38% Bond, High-Yield Corporate, HYG
-0.39% Pacific ex-Japan, EPP
-0.39% Growth SmallCap VIPERs, VBK
-0.40% EAFE Index, EFA
-0.40% Hong Kong Index, EWH
-0.40% United Kingdom Index, EWU
-0.41% Microcap Russell, IWC
-0.41% Dividend SPDR, SDY
-0.44% Value EAFE MSCI, EFV
-0.44% Bond Ex-US Treas, BWX
-0.46% Dividend International, PID
-0.46% Technology SPDR, XLK
-0.49% Metals & Mining SPDR, XME
-0.50% Bond, High-Yield Junk, JNK
-0.50% Global ex US ACWI iS, ACWX
-0.50% Small Cap VIPERs, VB
-0.50% Value SmallCap VIPERS, VBR
-0.51% Consumer Staples SPDR, XLP
-0.53% Water Resources, PHO
-0.54% Dividend DJ Select, DVY
-0.54% Europe 350 S&P Index, IEV
-0.56% Dividend High Yield Equity PS, PEY
-0.57% SmallCap Russell 2000, IWM
-0.57% Value SmallCap Russell 2000, IWN
-0.57% Switzerland Index, EWL
-0.58% Global 100, IOO
-0.63% Emerging 50 BLDRS, ADRE
-0.64% Growth SmallCap R 2000, IWO
-0.65% Networking, IGN
-0.72% Netherlands Index, EWN
-0.73% SmallCap S&P 600, IJR
-0.73% China 25 iS, FXI
-0.73% Value SmallCap S&P 600 B, IJS
-0.75% South Africa Index, EZA
-0.76% Telecom DJ US, IYZ
-0.77% European VIPERs, VGK
-0.83% Financials VIPERs, VFH
-0.83% Financial DJ US, IYF
-0.86% Belgium Index, EWK
-0.86% Latin Am 40, ILF
-0.90% Financial SPDR, XLF
-0.90% Capital Markets KWB ST, KCE
-0.91% Brazil Index, EWZ
-0.91% Emerging Markets, EEM
-0.93% Austria Index, EWO
-0.93% Emerging VIPERs, VWO
-0.93% Germany Index, EWG
-1.06% Financial Services DJ, IYG
-1.10% EMU Europe Index, EZU
-1.13% Silver Trust iS, SLV
-1.16% Value SmallCap S&P 600, RZV
-1.53% France Index, EWQ
-1.57% Taiwan Index, EWT
-1.60% Spain Index, EWP
-1.60% Sweden Index, EWD
-1.93% Russia MV, RSX
-2.22% India PS, PIN
-2.23% India Earnings WTree, EPI
-2.24% Turkey MSCI iS, TUR
-2.32% Thailand MSCI iS, THD
-2.79% Chile MSCI iS, ECH
-3.31% Indonesia MV, IDX