“U.S. stocks jumped as many investors sent a plea to Federal Reserve Chairman Ben Bernanke: Come to the rescue of the stalling economy and battered financial markets.”– http://online.wsj.com

Industrial and Financial underperformed again, thereby continuing their well established trends of relative weakness.

The S&P 500 Composite (SPX, 1,162.35) rose 38.53 points or 3.43% on Tuesday, August 23, 2011. SPX rose above the highs of the previous 2 trading days, possibly suggesting a minor bounce.

Breadth was fairly strong, with 2602 advances and 472 declines, and NYSE volume rose moderately to confirm the price upturn.

Minor price consolidations and corrections are to be expected in any trend, and they can last for several days and run for several percentage points, or sometimes more.

We keep in mind that the dominant trend remains persistently bearish, and that is the bias. In a bear market, surprises come to the downside. And so, playing minor counter trend bounces is risky.

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

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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 8/22/11.

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, 1,162.35) rose 38.53 points or 3.43% on Tuesday, August 23, 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
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
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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.
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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 the highs of the previous 3 months intraday on 8/23/11, confirming a short-term uptrend. But keep in mind that on 8/9/11, DBA traded below 8-month lows, confirming a medium-term downtrend.

Crude Oil, United States Oil ETF (USO) rose above the highs of the previous 3 trading days on 8/23/11, suggesting a minor bounce. But Oil fell below the lows of the previous 2 years on 8/9/11, confirming a major downtrend. Support 31.45, 30.31, 26.28, 22.74. Resistance 34.63, 35.14, 39.25, 40.74, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) fell below the lows of the previous 2 trading days on 8/23/11, possibly suggesting a minor shakeout. Gold rose above all-time highs on 8/22/11, 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: 175.13, 174.68. 167.77. 159.68, 156.11, 154.10, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: 184.82.

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 the lows of the previous trading day on 8/23/11, possibly suggesting a minor shakeout. Silver rose above 3-month highs on 8/22/11, 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.
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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
3.94% , IWZ , Growth LargeCap Russell 3000, IWZ
7.30% , HHH , Internet H, HHH
3.87% , JKE , Growth LargeCap iS M, JKE
3.60% , ISI , LargeCap Blend S&P 1500 iS, ISI
3.53% , IAH , Internet Architecture H, IAH
5.30% , IIH , Internet Infrastructure H, IIH
7.17% , PBW , WilderHill Clean Energy PS, PBW
1.57% , UTH , Utilities H, UTH
5.14% , JKK , Growth SmallCap iS M, JKK
6.13% , PXJ , Oil & Gas, PXJ
2.88% , JKI , Value MidCap iS M, JKI
3.96% , PBE , Biotech & Genome, PBE
3.78% , IYG , Financial Services DJ, IYG
5.10% , EWD , Sweden Index, EWD
7.39% , HRB , H&R BLOCK
6.20% , HANS , Hansen Natural, HANS
3.50% , VOX , Telecom Services VIPERs, VOX
5.27% , IWO , Growth SmallCap R 2000, IWO
6.85% , AM , AMER GREETINGS STK A
2.73% , IXG , Financials Global LargeCap Value, IXG
7.77% , SNPS , Synopsys Inc
2.77% , BBH , Biotech H, BBH
6.86% , ECL , ECOLAB
3.13% , IYK , Consumer Non-Cyclical, IYK
6.16% , MDT , MEDTRONIC
3.98% , IYW , Technology DJ US, IYW
10.80% , NVDA , NVIDIA
3.95% , MTK , Technology MS sT, MTK
7.44% , AMD , ADV MICRO DEV
3.62% , IXN , Technology Global, IXN
6.70% , ROK , ROCKWELL AUTOMAT
6.99% , DLX , DELUXE
3.13% , FRN , Frontier Markets Guggenheim , FRN

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-14.06% , TIN , TEMPLE INLAND
-2.95% , KBH , KB HOME
-3.99% , PHM , PULTE HOMES
-2.58% , LBTYA , Liberty Global Inc. (LBTYA)
-3.75% , GLD , Gold Shares S.T., GLD
-3.73% , MYY , Short 100% MidCap 400, MYY
-5.74% , DXD , Short 200% Dow 30 PS, DXD
-3.73% , IAU , Gold COMEX iS, IAU
-2.29% , URBN , Urban Outfitters Inc.
-1.15% , HNZ , HJ HEINZ
-1.06% , HIG , HARTFORD FINL
-1.87% , BAC , BANK OF AMERICA
-4.21% , PSQ , Short 100% QQQ, PSQ
-1.14% , LQD , Bond, Corp, LQD
-0.63% , WAG , WALGREEN
-1.17% , SIRI , Sirius Satellite
-4.69% , SLV , Silver Trust iS, SLV
-2.80% , DOG , Short 100% Dow 30, DOG
-1.38% , TLT , Bond, 20+ Years Treasury, TLT
-6.77% , SDS , Short 200% S&P 500 PS, SDS
-0.57% , PLD , PROLOGIS TRUST
-0.40% , IEF , Bond, 10 Year Treasury, IEF
-0.21% , EMB , Bond EmrgMkt JPM iS, EMB
-2.56% , NEM , NEWMONT MINING
-0.32% , GNW , GENWORTH FINANCIAL
-0.05% , SHY , Bond, 1-3 Year Treasury, SHY
-0.09% , MUB , Bond Muni ATM-Free S&P iS, MUB
-0.11% , DHI , D.R. HORTON, DHI
-0.27% , PFF , Preferred Stock iS, PFF
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
7.17% WilderHill Clean Energy PS, PBW
6.16% Semiconductor SPDR, XSD
5.63% South Korea Index, EWY
5.27% Growth SmallCap R 2000, IWO
5.15% Growth BARRA Small Cap 600, IJT
5.14% Semiconductor iS IGW, SOXX
5.10% Sweden Index, EWD
4.96% Growth SmallCap VIPERs, VBK
4.86% SmallCap S&P 600, IJR
4.83% SmallCap Russell 2000, IWM
4.70% Energy VIPERs, VDE
4.63% Microcap Russell, IWC
4.61% Australia Index, EWA
4.60% China 25 iS, FXI
4.56% Taiwan Index, EWT
4.56% Energy DJ, IYE
4.56% Biotech SPDR, XBI
4.55% China LargeCap Growth G D H USX PS, PGJ
4.54% Value SmallCap S&P 600 B, IJS
4.51% Growth MidCap 400 B, IJK
4.51% Energy SPDR, XLE
4.47% Small Cap VIPERs, VB
4.41% Networking, IGN
4.36% Water Resources, PHO
4.33% Pacific ex-Japan, EPP
4.33% Energy Global, IXC
4.21% Growth MidCap Russell, IWP
4.20% Value SmallCap Russell 2000, IWN
4.17% Info Tech VIPERs, VGT
4.12% QQQ Nasdaq 100 Trust, QQQ
4.05% Indonesia MV, IDX
4.04% Capital Markets KWB ST, KCE
4.02% MidCap S&P 400 iS, IJH
3.98% Value SmallCap VIPERS, VBR
3.98% Technology DJ US, IYW
3.98% Germany Index, EWG
3.91% France Index, EWQ
3.89% MidCap S&P 400 SPDRs, MDY
3.87% Consumer Discretionary SPDR, XLY
3.86% Growth 1000 Russell, IWF
3.78% Financial Services DJ, IYG
3.76% Growth VIPERs, VUG
3.68% Russia MV, RSX
3.67% Technology SPDR, XLK
3.66% Telecom DJ US, IYZ
3.63% LargeCap Blend S&P=Weight R, RSP
3.55% Growth S&P 500/BARRA, IVW
3.54% Energy & Nat Res iS GS, IGE
3.53% Materials SPDR, XLB
3.53% EMU Europe Index, EZU
3.52% Industrial SPDR, XLI
3.51% Emerging Markets, EEM
3.50% Value MidCap S&P 400 B, IJJ
3.47% LargeCap Blend Russell 3000, IWV
3.46% MidCap Russell, IWR
3.44% Emerging VIPERs, VWO
3.43% Blend Total Market VIPERs, VTI
3.42% European VIPERs, VGK
3.40% Mexico Index, EWW
3.40% Europe 350 S&P Index, IEV
3.38% LargeCap VIPERs, VV
3.38% Spain Index, EWP
3.37% Growth EAFE MSCI, EFG
3.37% Basic Materials DJ US, IYM
3.37% LargeCap 1000 R, IWB
3.35% Global ex US ACWI iS, ACWX
3.32% Transportation Av DJ, IYT
3.31% Value EAFE MSCI, EFV
3.30% Financial DJ US, IYF
3.29% S&P 500 SPDRs LargeCap Blend, SPY
3.28% S&P 500 iS LargeCap Blend, IVV
3.27% Financials VIPERs, VFH
3.27% Switzerland Index, EWL
3.26% Health Care SPDR, XLV
3.25% EAFE Index, EFA
3.24% Financial SPDR, XLF
3.23% Netherlands Index, EWN
3.21% Hong Kong Index, EWH
3.19% Dividend High Yield Equity PS, PEY
3.18% Value MidCap Russell, IWS
3.14% Dividend Appreciation Vipers, VIG
3.13% Frontier Markets Guggenheim , FRN
3.13% LargeCap Blend S&P 100, OEF
3.13% Value LargeCap Dynamic PS, PWV
3.13% Value S&P 500 B, IVE
3.08% United Kingdom Index, EWU
3.07% Dividend International, PID
3.06% Global 100, IOO
3.04% Dividend SPDR, SDY
3.01% Emerging 50 BLDRS, ADRE
3.01% Value VIPERs, VTV
3.01% Singapore Index, EWS
2.94% Turkey MSCI iS, TUR
2.91% Latin Am 40, ILF
2.87% Dividend DJ Select, DVY
2.84% Pacific VIPERs, VPL
2.83% DIAMONDS (DJIA), DIA
2.83% Value 1000 Russell, IWD
2.82% Metals & Mining SPDR, XME
2.81% Austria Index, EWO
2.77% Small Cap EAFE MSCI iS, SCZ
2.62% REIT Wilshire, RWR
2.58% Canada Index, EWC
2.52% Belgium Index, EWK
2.47% Real Estate US DJ, IYR
2.46% REIT VIPERs, VNQ
2.43% Homebuilders SPDR, XHB
2.41% India Earnings WTree, EPI
2.34% Oil Fund PowerShares, DBO
2.30% Chile MSCI iS, ECH
2.25% Realty Cohen & Steers, ICF
2.25% Italy Index, EWI
2.21% Brazil Index, EWZ
2.14% Oil, Crude, U.S. Oil Fund, USO
2.10% Malaysia Index, EWM
2.06% Consumer Staples SPDR, XLP
2.04% Utilities VIPERs, VPU
2.02% India PS, PIN
1.90% Japan Index, EWJ
1.80% Utilities SPDR, XLU
1.53% Agriculture DB PS, DBA
1.13% South Africa Index, EZA
1.03% Commodity Tracking, DBC
0.88% Bond, High-Yield Junk, JNK
0.75% Bond, High-Yield Corporate, HYG
0.33% Thailand MSCI iS, THD
0.30% Bond Ex-US Treas, BWX
0.00% Bond Treasury Short-Term iS, SHV
-0.05% Bond, 1-3 Year Treasury, SHY
-0.09% Bond Muni ATM-Free S&P iS, MUB
-0.18% Financial Preferred, PGF
-0.21% Bond EmrgMkt JPM iS, EMB
-0.24% Bond, Aggregate, AGG
-0.27% Preferred Stock iS, PFF
-0.40% Bond, 10 Year Treasury, IEF
-0.62% Bond, TIPS, TIP
-1.14% Bond, Corp, LQD
-1.38% Bond, 20+ Years Treasury, TLT
-2.79% Silver Miners Global X, SIL
-3.75% Gold Shares S.T., GLD
-4.69% Silver Trust iS, SLV