Primary Tide Bull Market Reconfirmed

The Dow Theory reconfirmed a Primary Tide Bull Market as of 12/29/10, 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.

The following indexes also closed above closing price highs of the previous 2-years as of 12/29/10, to confirm the Dow Theory Primary Tide Trend:

Dow-Jones Composite
S&P 100 Large Caps
S&P 500 Composite
NYSE Composite
Russell 1000
Russell 3000
The Cumulative Daily Advance-Decline Line for the NYSE

Energy stock sector Relative Strength Ratio (XLB/SPY) rose above 14-month highs and remains bullish. Absolute price rose above 2-year highs and remains bullish.

Materials stock sector Relative Strength Ratio (XLB/SPY) rose above 11-month highs and remains bullish. Absolute price rose above 2-year highs and remains bullish.

Industrial stock sector absolute price rose above 2-year highs and remains bullish.

Technology stock sector absolute price rose above 2-year highs and remains bullish.

Silver and Gold futures both rose further above 3-week highs, confirming short-term uptrends.

Silver/Gold Ratio rose above 3-year highs, again confirming a bullish trend. Silver has outperformed Gold substantially since 8/20/10.
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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
8.82% , MBI , MBIA
0.33% , IYC , Consumer Cyclical DJ, IYC
6.38% , SHLD , SEARS HOLDINGS
2.89% , APOL , APOLLO GROUP
1.01% , IXC , Energy Global, IXC
2.48% , ERTS , ELECTRONIC ARTS
1.85% , EWO , Austria Index, EWO
0.97% , EWP , Spain Index, EWP
2.71% , ZEUS , Olympic Steell, ZEUS
1.30% , PXJ , Oil & Gas, PXJ
1.61% , ILF , Latin Am 40, ILF
2.70% , MON , MONSANTO
2.84% , CECO , CAREER EDUCATION CORP
0.50% , FPX , IPOs, First Tr IPOX-100, FPX
0.41% , BDH , Broadband H, BDH
2.43% , EWZ , Brazil Index, EWZ
0.43% , RYAAY , Ryanair Holdings plc
1.77% , ERIC.O , LM Ericsson Telephone Company
1.16% , THD , Thailand MSCI iS, THD
0.34% , MTK , Technology MS sT, MTK
1.76% , HES , AMERADA HESS
1.12% , EWQ , France Index, EWQ
1.59% , BHI , BAKER HUGHES
0.90% , WYNN , Wynn Resorts L
0.15% , PKB , Building & Construction, PKB
1.18% , RF , REGIONS FINAN
0.15% , VTI , Blend Total Market VIPERs, VTI
1.88% , PIN , India PS, PIN
1.38% , STLD , Steel Dynamics, STLD
1.73% , SLB , SCHLUMBERGER
0.47% , RFV , Value MidCap S&P 400, RFV
1.64% , SRCL , Stericycle, SRCL
2.67% , HAL , HALLIBURTON

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.00% , NOVL , NOVELL
-1.98% , LSI , LSI LOGIC
-1.76% , LIZ , LIZ CLAIRBORNE
-1.09% , PXN , Nanotech Lux, PXN
-0.56% , BHH , Internet B2B H, BHH
-3.30% , TBT , 200% Short US T Bond, TBT
-1.89% , FMCN , Focus Media, FMCN
-1.74% , JNK , Bond, High-Yield Junk, JNK
-0.36% , CBE , COOPER INDS STK A
-1.79% , LLL , L-3 COMMS HLDGS
-0.78% , TER , TERADYNE
-0.73% , TROW , T ROWE PRICE GP
-0.86% , HSP , HOSPIRA
-0.45% , THC , TENET HEALTHCARE
-1.02% , AEE , AMEREN
-0.56% , DPS , Dr Pepper Snapple Group
-0.22% , NSM , NATL SEMICONDUCT
-0.57% , HD , HOME DEPOT
-0.89% , ININ , Interactive Intelligence ININ
-0.42% , NEE , NextEra Energy Resources LLC
-0.44% , RTN , RAYTHEON
-0.48% , DGX , QUEST DIAG
-0.93% , EXC , EXELON CORP
-0.79% , AA , ALCOA
-0.34% , WHR , WHIRLPOOL
-1.36% , HGSI , Human Genome Sciences Inc
-0.35% , XLU , Utilities SPDR, XLU
-0.75% , TLAB , TELLABS
-0.34% , SLE , SARA LEE
-1.43% , LNCR , Lincare Holdings Inc
-1.24% , ETFC , E*TRADE FINANCIAL
-0.40% , PLL , PALL
-0.71% , TWX , TIME WARNER INC

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 12/29/10 and remains bullish. Absolute price rose further above 2-year highs on 12/29/10 and remains bullish. 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 12/29/10 and remains bullish. Absolute price rose above 2-year highs on 12/29/10 and remains bullish. Support 34.20, 33.70, 32.36, 29.88, 29.43, and 27.67. Resistance 39.00, 40.15, and 41.06.

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 12/7/10 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 37.88, 39.09, 40.13, and 40.70.

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 12/29/10 and remains bullish. Support 31.82, 31.58, 30.79, 30.51, 30.32, 29.77, and 27.67. Resistance 35.00 and 36.16.

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 12/29/10 and remains bullish. Support 23.87, 23.74, 23.64, 23.56, 22.68, 22.53, 21.60, 20.01, and 19.51. Resistance 25.32 and 25.69.

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 16.13, 16.90, 17.12, 17.16, and 17.87.

Consumer Staples (XLP) Bearish, Under Weight. The Relative Strength Ratio (XLP/SPY) fell further below 7-month lows on 12/27/10 and remains bearish. Absolute price rose above 2-year highs on 12/16/10 and remains bullish. Support 29.23, 29.10, 28.22, 28.04, 27.76, 27.63, 27.46, 26.34, 25.30, and 24.95. Resistance 30.29.

Health Care (XLV) Bearish, Under Weight. The Relative Strength Ratio (XLV/SPY) fell below 2-year lows on 12/9/10 and remains bearish, as it has been most of the time since peaking on 2/23/09. Thanks to a bounce over the past 3-days, absolute price of XLV is technically bullish. Support 30.14, 30.11, 29.87, 28.00, 27.49. Resistance 31.79, 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.

Utilities (XLU) Bearish, Under Weight. The Relative Strength Ratio (XLU/SPY) fell below 7-month lows on 12/21/10 and remains bearish. Absolute price of XLU fell below 4-year lows on 12/21/10. Support 30.51, 29.66, 27.91, 27.44, and 25.76. Resistance 32.11 and 32.40.
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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) broke down below 5-month lows on 11/30/10 and remains neutral.

NASDAQ Composite/S&P 500 Relative Strength Ratio rose above 9-year highs on 11/26/10 and remains bullish for the long term. This RS Ratio has been in an uptrend for nearly 2 years, since 12/2/08.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below 28-year lows on 12/3/10. This RS Ratio has been trending lower since 8/3/10. Longer term, 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 12/22/10 and remains bullish.

CRB Index of commodity prices rose above 2-year highs on 12/28/20, thereby reconfirming its preexisting bullish major trend.

Crude Oil nearest futures contract price rose above 2-year highs on 12/27/20 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 rose further above 3-week highs on 12/29/10, confirming a short-term uptrend. 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) rebounded back above its 50-day SMA on 12/28/10, thereby turning bullish again.

Silver nearest futures contract price rose further above 3-week highs on 12/29/10, confirming a short-term uptrend. Silver rose above previous 30-year highs on 12/7/10, thereby confirming its preexisting bullish major trend.

Silver/Gold Ratio rose above 3-year highs on 12/29/10, again confirming a bullish trend. Silver has outperformed Gold substantially since 8/20/10.

Copper nearest futures contract price rose above multi-year highs on 12/21/10, 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 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 fell below 6-day lows on 12/28/10, signaling a short-term downtrend. 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 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) has firmed up moderately since making a low on 8/24/10, even as absolute price of TIP has declined. A rising RS 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 fell below 5-day lows on 12/28/10, confirming a short-term downtrend. USD may have found 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, 82.02, 83.64, 84.73, 85.36, 86.71, 88.80, 89.22, 89.71, and 92.53.

Advisory Service Sentiment: There were 55.6% Bulls versus 20.0% Bears as of 12/29/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio stands at 2.78, 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 12/29/10, 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, 1,259.78) closed above closing price highs of the previous 2-years as of 12/29/10, to confirm the Dow Theory 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
1274.42, high of 9/8/2008

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

2.43% Brazil Index, EWZ
1.88% India PS, PIN
1.85% Austria Index, EWO
1.77% Indonesia MV, IDX
1.73% Small Cap EAFE MSCI iS, SCZ
1.69% Bond, 20+ Years Treasury, TLT
1.61% Latin Am 40, ILF
1.40% China 25 iS, FXI
1.31% South Korea Index, EWY
1.28% Emerging 50 BLDRS, ADRE
1.25% India Earnings WTree, EPI
1.23% Emerging Markets, EEM
1.21% Emerging VIPERs, VWO
1.21% Chile MSCI iS, ECH
1.19% Taiwan Index, EWT
1.17% Hong Kong Index, EWH
1.16% Thailand MSCI iS, THD
1.15% Silver Trust iS, SLV
1.12% Bond, 10 Year Treasury, IEF
1.12% France Index, EWQ
1.11% Singapore Index, EWS
1.08% Pacific VIPERs, VPL
1.04% Global ex US ACWI iS, ACWX
1.01% Energy Global, IXC
0.99% Energy SPDR, XLE
0.97% Spain Index, EWP
0.95% European VIPERs, VGK
0.94% Value EAFE MSCI, EFV
0.93% South Africa Index, EZA
0.93% Europe 350 S&P Index, IEV
0.92% Natural Resource iS GS, IGE
0.92% Japan Index, EWJ
0.92% Dividend International, PID
0.91% Canada Index, EWC
0.89% EMU Europe Index, EZU
0.89% Growth EAFE MSCI, EFG
0.89% Energy VIPERs, VDE
0.88% Pacific ex-Japan, EPP
0.87% EAFE Index, EFA
0.84% Germany Index, EWG
0.82% Metals & Mining SPDR, XME
0.82% Sweden Index, EWD
0.82% United Kingdom Index, EWU
0.81% Turkey MSCI iS, TUR
0.80% Energy DJ, IYE
0.78% Malaysia Index, EWM
0.78% Belgium Index, EWK
0.75% Bond, Corp, LQD
0.75% Australia Index, EWA
0.71% Bond, Aggregate, AGG
0.65% Bond, TIPS, TIP
0.60% Basic Materials DJ US, IYM
0.58% Netherlands Index, EWN
0.56% Russia MV, RSX
0.49% China LargeCap Growth G D H USX PS, PGJ
0.49% Preferred Stock iS, PFF
0.48% WilderHill Clean Energy PS, PBW
0.45% Real Estate US DJ, IYR
0.44% REIT Wilshire, RWR
0.44% MidCap Russell, IWR
0.43% Bond Ex-US Treas, BWX
0.42% Materials SPDR, XLB
0.39% MidCap S&P 400 SPDRs, MDY
0.39% Telecom DJ US, IYZ
0.37% MidCap S&P 400 iS, IJH
0.37% Water Resources, PHO
0.36% Switzerland Index, EWL
0.36% Gold Shares S.T., GLD
0.33% Bond, High-Yield Corporate, HYG
0.33% Growth VIPERs, VUG
0.32% Consumer Discretionary SPDR, XLY
0.32% Growth SmallCap VIPERs, VBK
0.32% Financial Preferred, PGF
0.31% Value MidCap Russell, IWS
0.31% Italy Index, EWI
0.31% Growth MidCap 400 B, IJK
0.30% Small Cap VIPERs, VB
0.30% Value MidCap S&P 400 B, IJJ
0.26% Growth MidCap Russell, IWP
0.26% Realty Cohen & Steers, ICF
0.25% Transportation Av DJ, IYT
0.25% SmallCap S&P 600, IJR
0.24% Growth 1000 Russell, IWF
0.24% Global 100, IOO
0.24% Semiconductor SPDR, XSD
0.24% Bond, 1-3 Year Treasury, SHY
0.22% Value SmallCap VIPERS, VBR
0.22% Growth LargeCap NASDAQ 100, QQQQ
0.22% SmallCap Russell 2000, IWM
0.20% REIT VIPERs, VNQ
0.20% Technology SPDR, XLK
0.19% LargeCap Blend Russell 3000, IWV
0.18% Growth S&P 500/BARRA, IVW
0.17% Value SmallCap Russell 2000, IWN
0.15% Blend Total Market VIPERs, VTI
0.13% Info Tech VIPERs, VGT
0.12% Growth BARRA Small Cap 600, IJT
0.12% LargeCap VIPERs, VV
0.12% Microcap Russell, IWC
0.11% Mexico Index, EWW
0.11% Technology DJ US, IYW
0.10% LargeCap 1000 R, IWB
0.10% Dividend SPDR, SDY
0.10% S&P 500 iS LargeCap Blend, IVV
0.09% Value 1000 Russell, IWD
0.09% Industrial SPDR, XLI
0.08% Value SmallCap S&P 600 B, IJS
0.08% Growth SmallCap R 2000, IWO
0.08% Dividend Appreciation Vipers, VIG
0.07% Value SmallCap S&P 600, RZV
0.07% S&P 500 SPDRs LargeCap Blend, SPY
0.05% LargeCap Blend S&P 100, OEF
0.04% LargeCap Blend S&P=Weight R, RSP
0.04% Value VIPERs, VTV
0.04% Commodity Tracking, DBC
0.03% Consumer Staples SPDR, XLP
0.03% Health Care SPDR, XLV
0.03% Bond Muni ATM-Free S&P iS, MUB
0.02% Semiconductor iS IGW, SOXX
0.02% Value S&P 500 B, IVE
0.00% Dividend DJ Select, DVY
0.00% Dividend High Yield Equity PS, PEY
0.00% Value LargeCap Dynamic PS, PWV
0.00% Bond Treasury Short-Term iS, SHV
-0.02% Networking, IGN
-0.06% Homebuilders SPDR, XHB
-0.09% Utilities VIPERs, VPU
-0.12% DIAMONDS (DJIA), DIA
-0.12% Financial DJ US, IYF
-0.12% Agriculture DB PS, DBA
-0.17% Bond EmrgMkt JPM iS, EMB
-0.17% Financials VIPERs, VFH
-0.20% Financial SPDR, XLF
-0.23% Oil, Crude, U.S. Oil Fund, USO
-0.28% Financial Services DJ, IYG
-0.28% Biotech SPDR, XBI
-0.35% Utilities SPDR, XLU
-0.46% Capital Markets KWB ST, KCE
-1.74% Bond, High-Yield Junk, JNK