Technology stock sector (XLK) absolute price fell below its 50-day SMA on 10/8/12, for the first time since 7/25/12.

Consumer Staples stock sector Relative Strength Ratio (XLP/SPY) crossed above its 200-day SMA on 10/8/12.

Materials stock sector Relative Strength Ratio (XLB/SPY) whipsawed back above its 50-day SMA on 10/8/12, thereby turning systematically neutral again.

NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) fell below its 200-day SMA on 10/8/12.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) turned systematically neutral again on 10/8/12, when it fell below its 50-day SMA.

Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) whipsawed back above its 50-day SMA on 10/8/12, thereby turning systematically bullish again.

The S&P 500 (SPX: 1,455.88) fell 5.05 points or 0.35% on Monday, after challenging its September high but failing to make a new high last week. SPX may have found resistance near the same level it peaked at 3 weeks ago.

RSI(14) based on SPX, now at 59.26, appears to be slipping into the neutral zone. RSI(14) closed at 74.74 on 9/14/12, which was nearly 2 standard deviations above its 20-year average, indicating an extreme overbought condition.

On-Balance Volume for the SPX turned down after recovering little more than half of its loss from its minor high on 9/14/12, thereby demonstrating relative weakness and bearish divergence. OBV fell to its lowest level in 7 weeks on 9/28/12 and remains far below its highs for the year, 2012, thereby demonstrating major relative weakness and bearish divergence compared to the SPX price index.

NYSE volume fell 27% to a level 38% below its 200-day SMA on Monday. The NYSE volume 200-day SMA fell to its lowest level in 13 years on 10/8/12. Average volume has been trending down for more than 6 years, since 6/30/2006, reflecting diminishing enthusiasm for stocks.

NYSE Cumulative Volume of Advancing Stocks minus Volume of Declining Stocks turned down from a level below its March high, thereby demonstrating relative weakness and bearish divergence. Clearly, volume has not been confirming the price up move.

It takes volume to push prices up. After the shorts have been forced to cover and the longs have had their fill of buying, in the absence of a fresh source of demand, stocks fall of their own weight.

Investor sentiment data still indicates alarming degrees of optimism and bullish complacency. The pendulum of emotion tends to swing too far in one direction, but market mood always reverts to the mean, as it did during the -10% April-June 2012 downside price correction for the stock market.

The technical condition of the stock market does not support the excessive optimism of the bullish majority of stock investors and traders. Fed and ECB plans to buy bonds in unlimited quantities (with fiat currencies printed out of thin air and backed by nothing but a theory and a hope) do not guarantee that stock prices will continue to rise, especially now that the news is out. Typically, action is followed by reaction, and so a downside correction seems overdue. Choosing safety over risk still appears to be the most reasonable approach for conservative traders and investors.

*For extensive coverage of major global markets with illustrative charts, take a free trial for my weekly report —
click here.
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Hedge funds and equity mutual funds both lost money last year, 2011, and some are down again this year as well.

Meanwhile, one money manager made gains for 6 consecutive quarters; see:
Robert W. Colby Asset Management, Inc. (click here).

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Stock Market Indicators

The Dow Theory signaled a Primary Tide Bear Market on 5/17/12 when both Industrials and Transports closed below their closing price lows of the previous 4 months, including the critical lows of March and April, 2012. The Dow-Jones Industrial Average rose above its closing price highs of the previous 4-years on 10/5/12, but the Dow-Jones Transportation Average remains relatively weak, closer to its 2012 low than it to its 2012 high, thereby demonstrating non confirmation and bearish divergence.

NASDAQ 100/S&P 500 Relative Strength Ratio (QQQ/SPY) whipsawed back down below its 50-day SMA on 9/28/12, thereby turning systematically neutral again. QQQ/SPY fell below its 200-day SMA on 10/8/12. The QQQ/SPY 50-day SMA has been above its 200-day SMA since 8/5/11.

iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) turned systematically neutral on 9/13/12, when it rose above its 50-day SMA. BKF/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/13/11.

Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) turned systematically neutral on 9/13/12, when it rose above its 50-day SMA. EEM/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 2/3/11.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) turned systematically neutral again on 10/4/12, when it whipsawed back above its 50-day SMA. EFA/SPY remains below its 200-day SMA, and its 50-day SMA has remained below its 200-day SMA every day since 1/14/11. EFA/SPY has been trending down for nearly 5 years, since 11/27/2007, and there is no convincing evidence of any significant change in that major long-term downtrend.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEF/SPY) turned systematically neutral again on 10/8/12, when it fell below its 50-day SMA. OEF/SPY remains above its 200-day SMA, and the 50-day SMA has been above the 200-day SMA consistently every day since 8/24/11. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative safety of large size. On the other side of the coin, Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors prefer riskier and more volatile stocks.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell back down below its 50-day SMA on 10/5/12, thereby turning systematically bearish again. IWM/SPY fell below its 200-day SMA on 9/24/12, and its 50-day SMA has remained below its 200-day SMA consistently every day since 4/20/12.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) whipsawed back down below its 50-day SMA on 9/25/12, thereby turning systematically bearish again. MDY/SPY remains below its 200-day SMA, and its 50-day SMA has been below its 200-day SMA since 6/6/12.
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The S&P 500 Composite 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
1474.51, high of 9/14/2012

The S&P 500 Composite Potential Support
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1428.98, low of 9/10/2012
1426.68, high of 8/21/2012
1423.77, 50-day SMA
1422.38, high of 4/2/2012
1418.71, high of 8/17/2012
1415.32, high of 5/1/2012
1396.56, low of 9/4/2012
1391.04, low of 8/6/2012
1389.07, Fibonacci 78.6% of April-June 2012 range
1388.71, low of 5/3/2012
1381.50, Fibonacci 78.6% of 2007-2009 range
1380.39, high of 7/19/2012
1374.81, high of 7/3/2012
1370.58, high of 5/2/2011
1365.94, 200-day SMA
1363.49, high of 6/19/2012
1362.93, Fibonacci 61.8% of April-June 2012 range
1357.38, low of 4/10/2012
1355.70, low of 7/2/2012
1344.56, Fibonacci 50% of April-June 2012 range
1340.34, Fibonacci 23.6% of 2011-12 range
1340.03, low of 3/6/2012
1335.52, high of 6/11/2012
1334.93, high of 5/31/2012
1329.24, low of 7/24/2012
1329.05, high of 6/7/2012
1328.49, high of 5/22/2012
1326.19, Fibonacci 38.2% of April-June 2012 range
1325.41, low of 7/12/2012
1306.62, low of 6/12/2012
1303.47, Fibonacci 23.6% of April-June 2012 range
1291.98, low of 5/18/2012
1289.59, Fibonacci 38.2% of 2011-12 range
1266.74, low of 6/4/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1257.58, Fibonacci 61.8% of 2011 range
1248.58, Fibonacci 50.0% of 2011-12 range
1244.80, low of 12/7/2011
1239.73, low of 12/1/2011
1238.81, Fibonacci 78.6% of 1,576.09 high
1234.81, low of 11/3/2011
1231.04, high of 12/16/2011
1228.74, Fibonacci 61.8% of 2007-2009 range
1226.64, low of 11/9/2011
1224.57, high of 12/19/2011
1215.20, low of 12/16/2011
1207.56, Fibonacci 61.8% of 2011-12 range
1202.37, low of 12/19/2011
1158.66, low of 11/25/2011
1121.44, Fibonacci 50% of 2007-2009 range
1074.77, low of 10/4/2011
1149.16, Fibonacci 78.6% R of 2011-12 range
1014.14, Fibonacci 38.2% of 2007-2009 range
1010.91, low of 7/1/2010
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
881.38, Fibonacci 23.6% of 2007-2009 range
869.32, low of 7/8/2009
666.79, intraday low of 3/6/2009
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) 50-day SMA fell below its 200-day SMA on 10/2/12, thereby turning systematically bearish. UUP closed below its 50-day SMA on 8/3/12 and fell below its 200-day SMA on 8/31/12. UUP’s Support 21.57, 21.07, and 20.84. Resistance 21.94, 22.36, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) turned systematically neutral on 9/17/12 when price crossed below its 50-day SMA. DBA remains above its 200-day SMA, and its 50-day SMA remains above its 200-day SMA.

Crude Oil, United States Oil ETF (USO) turned systematically bearish on 9/19/12, when price fell below its 50-day SMA. USO fell below its 200-day SMA on 9/17/12. USO’s 50-day SMA remains below its 200-day SMA. Support 32.98, 32.45, 31.40, 29.02, 26.28, and 22.74. Resistance 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) rose above its highs of the previous 11 months on 10/4/12. GLD turned systematically bullish on 9/20/12, when its 50-day SMA rose above its 200-day SMA. GLD price rose above its highs of the previous 7 months on 10/1/12, rose above its 200-day SMA on 8/22/12, and rose above its 50-day SMA on 8/3/12. Support: 168.34, 166.30, 159.56, 154.83, 148.27, 147.19, 143.97, 143.42, and 142.55. Resistance: 174.00, 175.46, 177.40, and 185.85.

Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) rose above its 50-day SMA on 8/16/12, thereby turning systematically neutral. GDX/GLD rose above its 200-day SMA on 9/13/12 . The GDX/GLD 50-day SMA has remained below its 200-day SMA every day since 2/22/11, although that 50-200 spread has been narrowing since 9/5/12.

Silver, iShares Silver Trust ETF (SLV) turned systematically bullish on 10/1/12 when its price 50-day SMA crossed above the 200-day SMA. Support 32.40, 31.46, 29.28, 26.87, 26.13, 25.34, 25.00, 24.44, 22.52, 20.73, and 19.44. Resistance: 34.08, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.

Silver/Gold ETFs Ratio (SLV/GLD) rose above its 50-day SMA on 8/16/12, thereby turning systematically neutral. SLV/GLD rose above its 200-day SMA on 8/31/12. SLV/GLD remains systematically neutral. The 50-200 SMA spread has been narrowing since 8/22/12, however, and a bullish crossover is probable in days ahead.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price rose above its 50-day SMA on 8/21/12, thereby turning systematically neutral. Price rose above its 200-day SMA on 9/7/12. JJC remains systematically neutral because its 50-day SMA has remained below its 200-day SMA every day since 5/31/12. The 50-200 SMA spread has been narrowing since 8/8/12, although the spread is not tight and a crossover is not likely in days ahead. Dr. Copper” is one of the better indicators of investor confidence (or lack thereof) in the global industrial economy.
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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 later revealed to be deal stocks 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
7.21% , AVP , AVON
2.50% , TBT , 200% Short US T Bond, TBT
0.96% , ADRA , Asia 50 BLDRS, ADRA
0.84% , EZU , EMU Europe Index, EZU
0.85% , FEZ , Euro STOXX 50, FEZ
2.83% , EMN , EASTMAN CHEM
3.11% , LPX , LOUISIANA PAC
3.11% , SEE , SEALED AIR
0.84% , RYAAY , Ryanair Holdings plc
2.06% , BC , BRUNSWICK
1.83% , BLK , BlackRock Inc.
1.43% , EWI , Italy Index, EWI
1.65% , PRU , PRUDENTIAL FINL
0.98% , EWP , Spain Index, EWP
1.67% , WFM.O , Whole Foods Market Inc
2.65% , LOW , LOWES
0.74% , EWQ , France Index, EWQ
0.63% , IYZ , Telecom DJ US, IYZ
0.27% , JKL , Value SmallCap iS M, JKL
0.15% , ACWX , Global ex US ACWI iS, ACWX
0.88% , BIDU , Baidu, Inc., BIDU
0.29% , IYK , Consumer Non-Cyclical, IYK
2.17% , HIG , HARTFORD FINL
1.22% , SCHW.K , CHARLES SCHWAB, SCHW.O
2.60% , NYT , NY TIMES STK A
0.77% , WPI , WATSON PHARM
0.45% , XBI , Biotech SPDR, XBI
1.48% , MDT , MEDTRONIC
1.10% , XHB , Homebuilders SPDR, XHB
0.62% , PSQ , Short 100% QQQ, PSQ
0.47% , CCE , COCA COLA ENTER
0.67% , WHR , WHIRLPOOL
0.62% , DPS , Dr Pepper Snapple Group

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-9.86% , ISIL , INTERSIL CORP
-2.68% , KWT , Solar Energy MV, KWT
-1.22% , ACWX , Global ex US ACWI iS, ACWX
-0.45% , JKG , MidCap Blend Core iS M, JKG
-1.19% , KCE , Capital Markets KWB ST, KCE
-0.49% , MTK , Technology MS sT, MTK
-3.66% , JBL , JABIL CIRCUIT
-0.61% , PXQ , Networking, PXQ
-1.04% , XLK , Technology SPDR, XLK
-0.55% , PWO , OTC Dynamic PS, PWO
-0.56% , IXG , Financials Global LargeCap Value, IXG
-2.58% , ASH , ASHLAND
-2.83% , RFMD , RF Micro Devices Inc
-0.19% , JKI , Value MidCap iS M, JKI
-0.78% , IGV , Software, IGV
-0.73% , IGM , Technology GS, IGM
-2.20% , OMX , OFFICEMAX INC., OMX
-0.81% , IXN , Technology Global, IXN
-3.60% , EMN , EASTMAN CHEM
-0.63% , RFV , Value MidCap S&P 400, RFV
-0.34% , IJJ , Value MidCap S&P 400 B, IJJ
-0.67% , TMW , Wilshire 5000 ST TM, TMW
-1.08% , VGT , Info Tech VIPERs, VGT
-0.41% , IJK , Growth MidCap 400 B, IJK
-2.50% , MAS , MASCO
-1.85% , HMA , HEALTH MGMT STK A
-1.66% , EBAY , EBAY
-1.46% , DOV , DOVER
-0.77% , VGK , European VIPERs, VGK
-0.78% , ADRU , Europe 100 BLDRS, ADRU
-0.59% , PWB , Lg Cap Growth PSD, PWB
-0.54% , IWP , Growth MidCap Russell, IWP
-0.33% , KLD , LargeCap Blend Socially Responsible iS, KLD
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
0.98% Brazil Index, EWZ
0.84% Bond, 20+ Years Treasury, TLT
0.53% Metals & Mining SPDR, XME
0.50% Turkey MSCI iS, TUR
0.33% Bond, 10 Year Treasury, IEF
0.30% Bear, Short S&P 500, SH
0.26% Bond, Long-Term Corp iBoxx iS, LQD
0.24% Bond, TIPS U.S. Treasury iS, TIP
0.21% Transportation Av DJ, IYT
0.19% Energy DJ, IYE
0.16% Utilities SPDR, XLU
0.16% Energy SPDR, XLE
0.15% Bond, Intermediate US Aggregate iS, AGG
0.14% Latin Am 40, ILF
0.12% Energy VIPERs, VDE
0.09% Value LargeCap Dynamic PS, PWV
0.08% Utilities VIPERs, VPU
0.05% Chile MSCI iS, ECH
0.04% Bond, Muni S&P ATM-Free iS, MUB
0.01% Bond, 1-3 Year Treasury, SHY
0.01% Bond Treasury Short-Term iS, SHV
0.00% Financial Preferred, PGF
0.00% Australia Index, EWA
-0.02% Bond, High-Yield Junk, JNK
-0.04% Preferred Stock iS, PFF
-0.06% Financial SPDR, XLF
-0.07% Agriculture DB PS, DBA
-0.07% Health Care SPDR, XLV
-0.08% Energy & Nat Res iS GS, IGE
-0.10% Energy Global, IXC
-0.10% Dividend High Yield Equity PS, PEY
-0.12% Basic Materials DJ US, IYM
-0.13% Financial DJ US, IYF
-0.14% Dividend U.S. DJ iS, DVY
-0.14% Bond, High Yield Corp iBoxx iS, HYG
-0.15% Networking, IGN
-0.15% Financials VIPERs, VFH
-0.18% LargeCap Value Russell 1000 iS, IWD
-0.18% Value MidCap Russell, IWS
-0.18% Value VIPERs, VTV
-0.19% Materials SPDR, XLB
-0.19% Consumer Discretionary SPDR, XLY
-0.19% Dividend International, PID
-0.19% LargeCap Value S&P 500 iS, IVE
-0.20% Russia MV, RSX
-0.21% REIT Wilshire, RWR
-0.21% REIT VIPERs, VNQ
-0.22% Dividend Appreciation Vipers, VIG
-0.23% LargeCap Blend S&P=Weight R, RSP
-0.23% DIAMONDS (DJIA), DIA
-0.24% Global 100, IOO
-0.24% Industrial SPDR, XLI
-0.24% Canada Index, EWC
-0.25% Dividend ex-U.S. DJ iS, IDV
-0.25% Austria Index, EWO
-0.25% Emerging 50 BLDRS, ADRE
-0.25% Dividend SPDR, SDY
-0.27% Pacific ex-Japan, EPP
-0.28% Switzerland Index, EWL
-0.28% Financial Services DJ, IYG
-0.28% Commodity Tracking, DBC
-0.29% Bond, Emerg Mkt JPM iS, EMB
-0.29% Bond Ex-US Treas, BWX
-0.29% Realty Cohen & Steers, ICF
-0.30% Consumer Staples SPDR, XLP
-0.31% Oil Fund PowerShares, DBO
-0.32% MidCap Russell, IWR
-0.33% LargeCap Blend S&P 500 iS, IVV
-0.33% Gold Shares S.T., GLD
-0.33% LargeCap Blend Russell 1000 iS, IWB
-0.34% MidCap Value S&P 400 iS, IJJ
-0.34% S&P 500 SPDRs LargeCap Blend, SPY
-0.35% Water Resources, PHO
-0.36% Pacific VIPERs, VPL
-0.36% LargeCap VIPERs, VV
-0.38% Value SmallCap VIPERS, VBR
-0.39% Belgium Index, EWK
-0.39% LargeCap Blend S&P 100, OEF
-0.39% Blend Total Market VIPERs, VTI
-0.39% Oil, Crude, U.S. Oil Fund, USO
-0.39% LargeCap Growth S&P 500 iS, IVW
-0.41% MidCap Growth S&P 400 iS, IJK
-0.42% Real Estate US DJ iS, IYR
-0.43% LargeCap Blend Russell 3000 iS, IWV
-0.44% Mexico Index, EWW
-0.45% MidCap S&P 400 SPDRs, MDY
-0.46% Small Cap VIPERs, VB
-0.46% MidCap Blend S&P 400 iS, IJH
-0.47% Telecom DJ US, IYZ
-0.47% SmallCap Growth S&P 600 iS, IJT
-0.47% Growth EAFE MSCI, EFG
-0.48% Value EAFE MSCI, EFV
-0.49% WilderHill Clean Energy PS, PBW
-0.49% Growth VIPERs, VUG
-0.51% SmallCap Value S&P 600 iS, IJS
-0.53% Global LargeCap Blend MSCI iS, ACWI
-0.54% SmallCap Value Russell 2000 iS, IWN
-0.54% Growth MidCap Russell, IWP
-0.55% Japan Index, EWJ
-0.55% Indonesia MV, IDX
-0.55% SmallCap Blend S&P 600 iS, IJR
-0.56% Spain Index, EWP
-0.58% SmallCap Growth Russell 2000 iS, IWO
-0.59% Growth SmallCap VIPERs, VBK
-0.59% Foreign LargeCap EAFE MSCI iS, EFA
-0.59% LargeCap Growth Russell 1000 iS, IWF
-0.60% Microcap Russell, IWC
-0.62% United Kingdom Index, EWU
-0.63% SmallCap Blend Russell 2000 iS, IWM
-0.65% Hong Kong Index, EWH
-0.69% SmallCap Blend EAFE MSCI iS, SCZ
-0.73% Malaysia Index, EWM
-0.77% European VIPERs, VGK
-0.77% Homebuilders SPDR, XHB
-0.78% Netherlands Index, EWN
-0.80% Europe 350 S&P Index, IEV
-0.84% China LargeCap Growth G D H USX PS, PGJ
-0.88% Emerging Markets MSCI iS, EEM
-0.91% QQQ Nasdaq 100 Trust, QQQ
-0.92% Emerging VIPERs, VWO
-0.94% South Korea Index, EWY
-0.94% Technology DJ US, IYW
-0.96% EMU Europe Index, EZU
-0.97% France Index, EWQ
-1.04% Technology SPDR, XLK
-1.07% China 25 iS, FXI
-1.08% Info Tech VIPERs, VGT
-1.10% Semiconductor iS IGW, SOXX
-1.10% Biotech SPDR, XBI
-1.11% Singapore Index, EWS
-1.12% Sweden Index, EWD
-1.12% Thailand MSCI iS, THD
-1.19% Capital Markets KWB ST, KCE
-1.22% Global ex U.S. LargeCap Blend, ACWX
-1.29% Germany Index, EWG
-1.41% Italy Index, EWI
-1.42% Frontier Markets Guggenheim , FRN
-1.44% Silver Trust iS, SLV
-1.48% Taiwan Index, EWT
-1.48% Semiconductor SPDR, XSD
-1.85% South Africa Index, EZA
-2.13% India PS, PIN
-2.35% India Earnings WTree, EPI