Interesting Times

Further stock price weakness appears likely to follow last week’s 7% stock market rout.

Some sentiment indicators have turned bearish.

VIX Fear Index rose to 39.25, its highest level in 14 months, since 5/25/10. Options players appear to be growing more fearful as the stock price decline accelerates.

Put/Call volume ratios are high, indicating relatively heavy trading volume in puts.

The stock market is very oversold by normal standards.

But these are not normal times, and some of the biggest declines in history happened after the market was already oversold.

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. This is serious.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) broke down below 4-week lows on 8/5/11, suggesting a downtrend. In the longer time frame. DBA may be forming a bearish Descending Triangle Top Reversal Pattern since its high at 35.58 set on 3/4/11.

Crude Oil, United States Oil ETF (USO) fell below the lows of the previous 10 months on 8/5/11, confirming a significant downtrend.
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Stock Market Indicators

NASDAQ Composite/S&P 500 Relative Strength Ratio fell below the lows of the previous 2 weeks on 8/5/11. The Ratio’s 50-day SMA remains below the 200-day SMA, but the spread is closing and the SMAs may cross in days ahead. Absolute price broke down below 8-month lows on 8/5/11 and remains bearish.

Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) remains bearish. EEM/SPY fell further below its SMAs on 8/5/11, and the 50-day SMA remains below the 200-day SMA. Absolute price also is bearish: EEM broke down below 10-month lows on 8/5/11.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) has been in a major long-term downtrend since peaking on 11/27/07. The Ratio is below its 50-day SMA, below the 200-day SMA, and the 50-day SMA remains below the 200-day SMA. Absolute price has been weak since 5/2/11 and broke down below 10-month lows on 8/5/11.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) rose above the highs of the previous 9 months on 8/5/11, confirming a medium-term recovery. 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 8 months on 8/5/11 and remains bearish.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) is bearish. IWM/SPY fell below 9-month lows on 8/5/11.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) is bearish. MDY/SPY fell below 8-month lows on 8/5/11.

Advisory Service Sentiment: There were 46.3% Bulls versus 24.7% Bears as of 8/3/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio fell to 1.87, down from 2.30. This ratio indicates moderate bullish complacency when compared to the 20-year median of 1.56 and mean of 1.64.

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, 1,199.38) fell 0.69 points or 0.06% on Friday, August 5, 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
1370.50, 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
1238.81, Fibonacci 78.6% of 1,576.09 high
1235.05, high of 12/7/10
1,234.56, 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
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

S&P 500 Cash Index Potential Support
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
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Fixed-Income Investments

Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) closed above the highs of the previous 10 months on 8/4/11, again confirming a significant uptrend. The S&P downgrade is an unwelcome surprise and a risk to the uptrend, however. Support 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 106.32, and 109.34.

Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below 2-year lows and fell further below its 20-, and 50-, and 200-day simple moving averages on 8/4/11, confirming a significant bearish trend.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below the lows of the previous 5 weeks on 8/4/11, confirming a short-term downtrend. TIP/IEF remains below 3 key SMAs, of 20, 50, and 200 days. This means fixed-income investors currently prefer the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs.
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) fell below the previous day’s low on 8/5/11, suggesting a minor price pullback. On 7/21/11, UUP fell below the lower boundary line of a Symmetrical Triangle Consolidation Pattern from the low at 20.84 on 5/4/11. Support 20.91 and 20.84. Resistance 21.18, 21.74, 21.86, and 22.21.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) broke down below 4-week lows on 8/5/11, suggesting a downtrend. In the longer time frame. DBA may be forming a bearish Descending Triangle Top Reversal Pattern since its high at 35.58 set on 3/4/11. Support 31.65, and 31.46. Resistance 33.42, 34.83, and 35.58.

Crude Oil, United States Oil ETF (USO) fell below the lows of the previous 10 months on 8/5/11, confirming a significant downtrend. Support 30.93 and 22.74. Resistance 39.25, 40.74, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) rose above all-time highs early on 8/4/11. Although minor price consolidations and corrections are to be expected in bullish price trends, the dominant trend remains persistently bullish. In a world of too much debt, weak currencies, and self-serving politicians, investors around the globe seek the safety of gold as the only forever-true money. Support: 156.11, 154.10, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: none.

Gold Mining Stocks ETF (GDX) Relative (to the Gold bullion ETF) Strength Ratio (GDX/GLD) fell below 29-month lows on 8/5/11, which is a bearish indication for the long term.

Silver, iShares Silver Trust ETF (SLV) fell below 3-week lows on 8/5/11, confirming a short-term price pullback. Support 35.29, 34.02, and 31.97. Resistance: 44.71 and 48.35.

Silver/Gold ETFs Ratio (SLV/GLD) fell below 3-week lows on 8/4/11, suggesting a pullback.

Copper, iPath DJ-UBS Copper TR Sub-Idx ETN (JJC ) fell below the lows of the previous 5 weeks on 8/5/11, again confirming a short-term downtrend. Strength in Copper suggests confidence in the economic outlook, while Weakness suggests doubts about the future. Support 52.93, 52.12, 51.13. Resistance: 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
6.52% , EWP , Spain Index, EWP
3.54% , EZU , EMU Europe Index, EZU
2.66% , EWO , Austria Index, EWO
2.77% , EWK , Belgium Index, EWK
3.97% , WPO , Washington Post
5.19% , PKI , PERKINELMER
4.88% , EWD , Sweden Index, EWD
1.09% , PBJ , Food & Beverage, PBJ
4.11% , EOG , EOG RESOURCES
2.41% , IEV , Europe 350 S&P Index, IEV
2.98% , VGK , European VIPERs, VGK
8.40% , HANS , Hansen Natural, HANS
6.01% , GRMN , GARMIN LTD
4.06% , MRO , MARATHON OIL
2.10% , LMT , LOCKHEED MARTIN
2.12% , HOLX , Hologic, Inc., HOLX
3.91% , EWN , Netherlands Index, EWN
2.09% , BDX , BECTON DICKINSON
3.07% , FO , FORTUNE BRANDS
3.89% , ERIC.O , LM Ericsson Telephone Company
3.48% , RYAAY , Ryanair Holdings plc
1.76% , KMX , CarMax
0.77% , PIV , Value Line Timeliness MidCap Gr, PIV
2.33% , AEE , AMEREN
2.69% , CHD , Church & Dwight
1.39% , ITT , ITT INDS
0.78% , SCZ , Small Cap EAFE MSCI iS, SCZ
0.37% , TTH , Telecom H, TTH
1.99% , AZO , AUTOZONE
1.61% , CMS , CMS ENERGY
2.96% , ED , CON ED
0.88% , PPH , Pharmaceutical H, PPH
0.97% , BBH , Biotech H, BBH

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-4.24% , PIC , Insurance, PIC
-2.97% , EWH , Hong Kong Index, EWH
-1.70% , JKH , MidCap Growth iS M, JKH
-5.04% , DYN , DYNEGY
-7.47% , BAC , BANK OF AMERICA
-2.00% , JKK , Growth SmallCap iS M, JKK
-2.02% , RFG , Growth MidCap S&P 400, RFG
-1.34% , BDH , Broadband H, BDH
-5.24% , SUN , SUNOCO
-1.85% , PXN , Nanotech Lux, PXN
-1.41% , IGV , Software, IGV
-4.85% , CIEN.O , CIENA
-3.00% , MTB , M&T BANK
-3.94% , C , CITIGROUP
-2.11% , PZI , Micro Cap Zachs, PZI
-3.97% , PMCS , PMC SIERRA
-3.10% , FRX , FOREST LABS STK A
-3.27% , MRVL , MARVELL TECHNOLOGY
-3.37% , NTAP , NETWK APPLIANCE
-3.92% , BK , BANK OF NEW YORK
-3.03% , HD , HOME DEPOT
-4.29% , ROK , ROCKWELL AUTOMAT
-4.23% , IPG , INTERPUBLIC GRP
-2.30% , RWR , REIT Wilshire, RWR
-5.83% , NBR , NABORS
-2.89% , PXJ , Oil & Gas, PXJ
-2.03% , PGF , Financial Preferred, PGF
-4.08% , CVG , CONVERGYS
-2.02% , SOXX , Semiconductor iS IGW, SOXX
-2.54% , PWO , OTC Dynamic PS, PWO
-2.43% , NVLS , NOVELLUS SYS
-1.70% , RKH , Bank Regional H, RKH
-2.61% , TXN , TEXAS INSTRUMENT
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
6.52% Spain Index, EWP
5.54% Italy Index, EWI
4.88% Sweden Index, EWD
3.91% Netherlands Index, EWN
3.73% France Index, EWQ
3.54% EMU Europe Index, EZU
2.98% European VIPERs, VGK
2.77% Belgium Index, EWK
2.66% Austria Index, EWO
2.59% South Africa Index, EZA
2.41% Europe 350 S&P Index, IEV
2.11% Germany Index, EWG
2.02% Value EAFE MSCI, EFV
1.77% EAFE Index, EFA
1.62% Mexico Index, EWW
1.52% Growth EAFE MSCI, EFG
1.42% Consumer Staples SPDR, XLP
1.27% Global 100, IOO
1.00% United Kingdom Index, EWU
0.94% Switzerland Index, EWL
0.91% Japan Index, EWJ
0.82% Utilities SPDR, XLU
0.78% Small Cap EAFE MSCI iS, SCZ
0.76% Bond Ex-US Treas, BWX
0.76% Health Care SPDR, XLV
0.70% India PS, PIN
0.69% Gold Shares S.T., GLD
0.68% Global ex US ACWI iS, ACWX
0.66% Oil, Crude, U.S. Oil Fund, USO
0.62% Dividend High Yield Equity PS, PEY
0.61% Dividend Appreciation Vipers, VIG
0.61% Oil Fund PowerShares, DBO
0.59% Agriculture DB PS, DBA
0.58% Brazil Index, EWZ
0.56% Dividend DJ Select, DVY
0.49% Dividend SPDR, SDY
0.47% DIAMONDS (DJIA), DIA
0.42% Commodity Tracking, DBC
0.41% Utilities VIPERs, VPU
0.27% Dividend International, PID
0.22% Value LargeCap Dynamic PS, PWV
0.11% LargeCap Blend S&P 100, OEF
0.05% Bond Muni ATM-Free S&P iS, MUB
0.02% Pacific VIPERs, VPL
0.00% Industrial SPDR, XLI
0.00% Bond Treasury Short-Term iS, SHV
-0.02% Bond, 1-3 Year Treasury, SHY
-0.04% Latin Am 40, ILF
-0.07% Malaysia Index, EWM
-0.08% Silver Miners Global X, SIL
-0.08% Consumer Discretionary SPDR, XLY
-0.10% Bond, High-Yield Corporate, HYG
-0.11% Growth S&P 500/BARRA, IVW
-0.13% Bond, High-Yield Junk, JNK
-0.14% India Earnings WTree, EPI
-0.15% S&P 500 SPDRs LargeCap Blend, SPY
-0.16% Value S&P 500 B, IVE
-0.20% S&P 500 iS LargeCap Blend, IVV
-0.23% Materials SPDR, XLB
-0.24% Growth VIPERs, VUG
-0.24% Energy Global, IXC
-0.28% Value VIPERs, VTV
-0.31% Growth 1000 Russell, IWF
-0.31% LargeCap VIPERs, VV
-0.38% LargeCap Blend S&P=Weight R, RSP
-0.39% LargeCap Blend Russell 3000, IWV
-0.41% South Korea Index, EWY
-0.42% LargeCap 1000 R, IWB
-0.42% Blend Total Market VIPERs, VTI
-0.43% Value 1000 Russell, IWD
-0.44% Energy DJ, IYE
-0.46% Transportation Av DJ, IYT
-0.56% Russia MV, RSX
-0.61% Technology SPDR, XLK
-0.63% QQQ Nasdaq 100 Trust, QQQ
-0.65% Emerging Markets, EEM
-0.66% Bond, Aggregate, AGG
-0.77% Silver Trust iS, SLV
-0.77% Emerging VIPERs, VWO
-0.78% Telecom DJ US, IYZ
-0.78% Energy VIPERs, VDE
-0.80% Homebuilders SPDR, XHB
-0.84% Emerging 50 BLDRS, ADRE
-0.84% Technology DJ US, IYW
-0.91% Info Tech VIPERs, VGT
-0.93% Value MidCap Russell, IWS
-0.95% Basic Materials DJ US, IYM
-0.96% Energy SPDR, XLE
-0.97% Thailand MSCI iS, THD
-0.98% Australia Index, EWA
-1.04% China LargeCap Growth G D H USX PS, PGJ
-1.04% MidCap Russell, IWR
-1.10% Capital Markets KWB ST, KCE
-1.11% Singapore Index, EWS
-1.13% Energy & Nat Res iS GS, IGE
-1.14% Bond, TIPS, TIP
-1.15% Growth MidCap Russell, IWP
-1.16% Bond, 10 Year Treasury, IEF
-1.17% Biotech SPDR, XBI
-1.22% China 25 iS, FXI
-1.24% Bond, Corp, LQD
-1.25% Frontier Markets Guggenheim , FRN
-1.30% Water Resources, PHO
-1.34% Bond EmrgMkt JPM iS, EMB
-1.34% Pacific ex-Japan, EPP
-1.39% Value MidCap S&P 400 B, IJJ
-1.47% Value SmallCap S&P 600 B, IJS
-1.49% SmallCap S&P 600, IJR
-1.53% Growth BARRA Small Cap 600, IJT
-1.64% MidCap S&P 400 SPDRs, MDY
-1.64% Value SmallCap Russell 2000, IWN
-1.65% WilderHill Clean Energy PS, PBW
-1.65% Microcap Russell, IWC
-1.67% MidCap S&P 400 iS, IJH
-1.70% Value SmallCap VIPERS, VBR
-1.73% Canada Index, EWC
-1.73% Networking, IGN
-1.74% Financials VIPERs, VFH
-1.75% SmallCap Russell 2000, IWM
-1.78% Growth SmallCap R 2000, IWO
-1.79% Growth MidCap 400 B, IJK
-1.86% Financial DJ US, IYF
-1.86% Small Cap VIPERs, VB
-1.90% Financial SPDR, XLF
-1.91% Financial Services DJ, IYG
-1.91% Preferred Stock iS, PFF
-1.91% Growth SmallCap VIPERs, VBK
-2.02% Semiconductor iS IGW, SOXX
-2.03% Financial Preferred, PGF
-2.06% Real Estate US DJ, IYR
-2.10% Chile MSCI iS, ECH
-2.19% Realty Cohen & Steers, ICF
-2.30% REIT Wilshire, RWR
-2.50% REIT VIPERs, VNQ
-2.89% Bond, 20+ Years Treasury, TLT
-2.91% Metals & Mining SPDR, XME
-2.97% Hong Kong Index, EWH
-3.05% Taiwan Index, EWT
-3.16% Semiconductor SPDR, XSD
-3.65% Indonesia MV, IDX
-3.88% Turkey MSCI iS, TUR