Better-than-expected earnings invited profit taking in late trading after the close on Monday.

S&P 500 Composite (SPX, 1,184.71) rose 8.52 points or 0.72% to close the day session above previous 5-month highs. Profit taking has been followed by rapid recovery to higher highs in recent weeks. Technically, the weight of the evidence remains bullish. I must continue to assume that the bulls are in control until proved otherwise.
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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
5.45% , AGN , ALLERGAN
0.57% , ADRU , Europe 100 BLDRS, ADRU
1.10% , PWV , Value LargeCap Dynamic PS, PWV
0.71% , KLD , LargeCap Blend Socially Responsible iS, KLD
3.13% , SWY , SAFEWAY
0.73% , IXJ , Healthcare Global, IXJ
3.97% , TLAB , TELLABS
1.08% , JKL , Value SmallCap iS M, JKL
0.76% , PMR , Retail, PMR
3.59% , LNC , LINCOLN NATL
1.83% , STJ , ST JUDE MEDICAL
0.96% , NY , Value LargeCap NYSE 100 iS, NY
3.83% , HAS , HASBRO
1.19% , EWI , Italy Index, EWI
1.41% , CVG , CONVERGYS
0.67% , PUI , Utilities, PUI
0.51% , VXF , Extended Mkt VIPERs, VXF
0.84% , VHT , Health Care VIPERs, VHT
1.96% , PH , PARKER HANNIFIN
0.42% , PPH , Pharmaceutical H, PPH
5.74% , LPX , LOUISIANA PAC
3.36% , KEY , KEYCORP
0.97% , PZJ , SmallCap PS Zacks, PZJ
1.41% , SUN , SUNOCO
1.49% , IWN , Value SmallCap Russell 2000, IWN
0.81% , BSX , BOSTON SCIENT
1.62% , WHR , WHIRLPOOL
0.63% , DVY , Dividend DJ Select, DVY
2.90% , STT , STATE STREET
0.93% , ISIL , INTERSIL CORP
1.56% , SVU , SUPERVALU
0.55% , IWS , Value MidCap Russell, IWS
1.09% , DSV , Value Small Cap DJ, DSV
1.25% , IBM , IBM
2.04% , HOLX , Hologic, Inc., HOLX
0.13% , JKK , Growth SmallCap iS M, JKK
2.13% , MDT , MEDTRONIC
0.80% , RPV , Value S&P 500, RPV
0.66% , IWV , LargeCap Blend Russell 3000, IWV
0.47% , DSG , Growth Small Cap DJ, DSG

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-5.09% , FLR , FLUOR
-1.60% , TBH , Telebras HOLDRS, TBH
-4.83% , HAL , HALLIBURTON
-11.49% , HRB , H&R BLOCK
-0.05% , IAH , Internet Architecture H, IAH
-1.02% , BDH , Broadband H, BDH
-0.30% , IGN , Networking, IGN
-0.23% , SWH , Software H, SWH
-2.45% , CMI , CUMMINS
-3.18% , BHH , Internet B2B H, BHH
-1.37% , PBI , PITNEY BOWES
-0.48% , ACV , Alberto-Culver Co.
-0.63% , PLD , PROLOGIS TRUST
-0.88% , EWT , Taiwan Index, EWT
-1.76% , IPG , INTERPUBLIC GRP
-0.81% , MZZ , Short 200% MidCap 400 PS, MZZ
-0.93% , EXPD , Expeditors International WA
-1.91% , TAP , ADOLPH COORS STK B, TAP
-0.55% , EIS , Israel MSCI iS, EIS
-0.80% , SLM , SLM CORP
-0.24% , PSQ , Short 100% QQQ, PSQ
-2.37% , LOW , LOWES
-2.03% , CLF , CLIFFS NATURAL RESOURCES, CLF
-0.80% , DOV , DOVER
-1.68% , JCP , JC PENNEY
-1.35% , AVP , AVON
-0.79% , TEVA , Teva Pharmaceutical Industries Limited
-0.57% , EMB , Bond EmrgMkt JPM iS, EMB
-0.31% , PXQ , Networking, PXQ
-2.90% , NYT , NY TIMES STK A
-4.97% , MTG , MGIC INVESTMENT
-0.43% , XSD , Semiconductor SPDR, XSD
-0.60% , HSIC , Henry Schein Inc
-1.02% , ECH , Chile MSCI iS, ECH
-0.77% , SNDK , SanDisk Corporation
-0.37% , LLL , L-3 COMMS HLDGS
-0.15% , PSI , Semiconductors, PSI
-0.20% , EWD , Sweden Index, EWD
-0.32% , CMS , CMS ENERGY
-0.51% , DOG , Short 100% Dow 30, DOG

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

Consumer Discretionary (XLY) Bullish, Over Weight. The Relative Strength Ratio (XLY/SPY) rose to another new 3-month high on 10/8/10 and remains bullish. The Ratio remains above both SMAs and the 50-day SMA remains above the 200-day SMA. Absolute price rose further above 5-month highs on 10/13/10 and remains bullish, with the rising 50-day SMA above the rising 200-day SMA. Support 33.11, 32.66, 31.70, 29.80, 28.64, 28.21, and 26.62. Resistance 36.13, 38.25 and 39.09.

Technology (XLK) Bullish, Over Weight. The Relative Strength Ratio (XLK/SPY) rose sharply above 10-month highs on 10/15/10 and remains bullish. Absolute price of XLK rose above 2-year highs on 10/18/10 and turned bullish: the 50-day SMA crossed above the 200-day SMA. Support 23.56, 22.68, 22.53, 21.60, 20.01, and 19.51. Resistance 24.68 and 25.69.

Industrial (XLI) Bullish, Over Weight. The Relative Strength Ratio (XLI/SPY) crossed below its 50-day SMA on 10/18/10, thereby turning neutral. Absolute price rose further above 5-month highs on 10/13/10 and remains bullish. Support 30.79, 30.51, 30.32, 29.77, and 27.67. Resistance 32.78, 33.04, 35.00, and 36.16.

Materials (XLB) Bullish, Over Weight. The Relative Strength Ratio (XLB/SPY) crossed back above its rising 50-day SMA on 10/8/10, thereby turning bullish again. Absolute price rose further above 5-month highs on 10/13/10 and remains bullish. Support 32.36, 29.88, 29.43, and 27.67. Resistance 34.80, 35.47, and 37.56.

Energy (XLE) Neutral, Market Weight. The Relative Strength Ratio (XLE/SPY) rose above 5-month highs on 10/14/10 but remains technically neutral. Absolute price rose further above 5-month highs on 10/13/10 but remains technically neutral. On both charts, the 50-day SMAs are below the 200-day SMAs. Price peaked at 62.30 on 4/26/10. Support 55.68, 53.22, 50.33, 48.56, 46.16, and 43.66. Resistance 58.11, 59.84, 62.30, 62.73, 69.95, and 78.10.

Consumer Staples (XLP) Neutral, Market Weight. The Relative Strength Ratio (XLP/SPY) remains neutral, consolidating gains between its 50-day and 200-day SMAs. Absolute price rose further above 2-year highs on 10/18/10 and remains bullish. Support 28.04, 27.76, 27.63, 27.46, 26.34, 25.30, and 24.95. Resistance 28.75, 29.29 and 30.29.

Health Care (XLV) Bearish, Under Weight. The Relative Strength Ratio (XLV/SPY) fell below 5-week lows on 10/12/10 and remains bearish, as it has been most of the time since peaking on 2/23/09. Absolute price of XLV remains neutral. Price peaked at 33.16 on 1/20/10. Support 30.11, 29.87, 28.00, 27.49. Resistance 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.

Utilities (XLU) Neutral, Market Weight. The Relative Strength Ratio (XLU/SPY) fell below 3-month lows on 10/13/10 and remains neutral, below the falling 50-day SMA. Absolute price of XLU remains bullish, with the rising 50-day SMA above the rising 200-day SMA. Support 31.27, 30.76, 30.15, 29.66, 27.91, 27.44, and 25.76. Resistance 32.27.

Financial (XLF) Bearish, Under Weight. The Relative Strength Ratio (XLF/SPY) fell further below 17-month lows on 10/15/10 and remains bearish. Absolute price of XLF bounced up into the neutral zone on 10/18/10 when it crossed above its 50-day SMA. XLF price remains below its 200-day SMA, and the 50-day SMA remains below the 200-day SMA. XLF has been bearish most days after peaking at 17.12 on 4/15/10. Support 13.29 and 13.08. Resistance 15.09, 15.67, 16.13, 16.90, 17.12, 17.16, and 17.87.
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) rose further above 7-year highs on 10/4/10, again confirming a secular (major) bullish trend. Absolute price rose above 2-year highs to confirm RS.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) rose above 8-month highs on 10/14/10 and remains bullish, with the rising 50-day SMA above the falling 200-day SMA. Absolute price rose above 6-month closing price highs on 10/14/10 and remains bullish, with the rising 50-day SMA above the rising 200-day SMA.

NASDAQ Composite/S&P 500 Relative Strength Ratio leaped up above 9-year highs on 10/15/10. The 50-day SMA remains moderately below the 200-day SMA but is quickly closing the gap.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell further below 3-month lows on 9/30/10. The 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) remains technically neutral, with the rising 50-day SMA moderately below the rising 200-day SMA.

The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose above 15-year highs on 9/30/10 and remains bullish. Absolute price rose above 5-month highs on 10/13/10 and remains bullish, with the rising 50-day SMA above the rising 200-day SMA.

Crude Oil nearest futures contract price has been consolidating more or less sideways/neutral in a choppy trading range since topping at 87.15 on 5/3/10. Support 80.30, 72.63, 70.76, 70.35, 69.51, 68.59, 67.15, 65.05, and 64.24. Resistance 84.43, 84.55, 87.15, 90.51, 98.65, and 102.84.

Gold nearest futures contract price rose above previous all-time highs on 10/14/10. All trends remain bullish. Support 1341.1, 1325.6, 1297.0, 1274.8, 1270.5, 1232.4, 1210.9, 1191.5, and 1155.6. Resistance: none.

Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) fell below 7-week lows on 10/15/10, thereby giving a bearish signal for the Secondary, intermediate-term trend. The RS Ratio is now between its 50-day SMA and 200-day SMA and falling. GDX has been underperforming GLD since 9/22/10.

Silver/Gold Ratio rose further above 2-year highs on 10/14/10, again confirming a bullish trend. Silver has outperformed Gold significantly since 8/20/10.

Copper nearest futures contract price rose further above 2-year highs on 10/14/10, again confirming a major uptrend. Strength in Copper suggests confidence about prospects for the world economy, while weakness in Copper suggests doubts. Support 3.6445, 3.3930, 3.1775, 2.9285, 2.8555, 2.8445, and 2.72. Resistance 4.0825 and 4.27.

U.S. Treasury Bond nearest futures contract price fell below 3-day week lows on 10/15/10, again confirming a change in the short-term trend to the downside, at least. In addition, there could be a chance for a potential double top around recent highs of 135.12 and 135.19. Support 129.05, 126.01, 125.07, 124.19, 123.03, 121.28, 119.26, 118.24, 118.12, 115.15, 114.06. 113.04, and 112.15. Resistance 135.19, 136.31, 137.31, and 142.31.

Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) rose above 2-month highs on 10/13/10 but remains neutral, with the falling 50-day SMA below the falling 200-day SMA.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) rose above 8-month highs on 10/14/10 and has been rising since 8/24/10. This implies that fixed-income investors have been choosing more inflation protection since 8/24/10.

The U.S. dollar nearest futures contract price fell below 10-month lows on 10/14/10, thereby confirming a bearish trend for the short term and intermediate term. Long term, USD may be in a secular downtrend and merely consolidating losses since bottoming at 70.805 in March 2008. Support 76.47, 75.90, 74.27, and 70.805. Resistance 82.335, 83.315, 83.64, 83.96, 85.36, 86.71, 88.80, 89.22, 89.71, and 92.53.

Advisory Service Sentiment: There were 47.2% Bulls versus 24.7% Bears as of 10/13/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio rose to 1.91, up from 0.78 on 9/1/10. That 0.78 was the lowest level of bullish sentiment in 17 months, since 3/25/09. Previously, the ratio had fallen substantially from its peak at 3.36 set on 1/13/10, which was the highest bullish sentiment in 6 years. The 20-year range is 0.41 to 3.74, the median is 1.53, and the mean is 1.60.

VIX Fear Index plunged below 5-month lows, breaking 19 on 10/11/10, down from 48 in May. A low and falling VIX suggests increasing bullish complacency. 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 suggests a Primary Tide Bull Market, in my interpretation. The Dow Theory last confirmed a Bullish Major Trend on 4/26/10, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 18 months. The Dow Theory 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. That 7/23/09 bullish signal reversed the previous bearish signal: the two Averages signaled a Primary Tide Bear Market on 11/21/07, when both Averages closed below their closing price lows of August 2007. On Friday 9/24/10, the Dow-Jones Industrial Average rose to a new 4-month closing price high and on Tuesday 9/28/10 the Dow-Jones Transportation Average confirmed by making a new 4-month closing price high. This signals an intermediate-term Secondary uptrend, according to The Dow Theory.

S&P 500 Composite (SPX, 1,184.71) rose 8.52 points or 0.72% to close above previous 5-month highs. I continue to assume that the bulls are in control until proved otherwise.

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
1255.09, high of 9/12/2008
1238.81, Fibonacci 78.6% of 1,576.09 high
1228.74, Fibonacci 61.8% of 2007-2009 range
1220.03, high of 9/25/2008
1219.80, high of 4/26/2010

S&P 500 Cash Index Potential Support
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

3.32% EMU Europe Index, EZU
2.65% Metals & Mining SPDR, XME
2.42% Financial Services DJ, IYG
2.28% Oil, Crude, U.S. Oil Fund, USO
2.27% Financial SPDR, XLF
2.08% Financials VIPERs, VFH
2.03% Capital Markets KWB ST, KCE
1.99% Financial DJ US, IYF
1.94% South Africa Index, EZA
1.49% Value SmallCap Russell 2000, IWN
1.32% REIT Wilshire, RWR
1.29% REIT VIPERs, VNQ
1.24% Microcap Russell, IWC
1.22% Austria Index, EWO
1.19% Italy Index, EWI
1.18% Realty Cohen & Steers, ICF
1.17% Dividend International, PID
1.15% Latin Am 40, ILF
1.10% Value LargeCap Dynamic PS, PWV
1.06% Germany Index, EWG
1.00% Commodity Tracking, DBC
1.00% Energy DJ, IYE
0.99% Value SmallCap VIPERS, VBR
0.98% Value VIPERs, VTV
0.93% Health Care SPDR, XLV
0.92% Value SmallCap S&P 600, RZV
0.88% Silver Trust iS, SLV
0.88% Value SmallCap S&P 600 B, IJS
0.85% Small Cap VIPERs, VB
0.85% Value S&P 500 B, IVE
0.84% SmallCap Russell 2000, IWM
0.82% Dividend High Yield Equity PS, PEY
0.81% Bond, 20+ Years Treasury, TLT
0.80% India Earnings WTree, EPI
0.78% Utilities VIPERs, VPU
0.75% LargeCap Blend S&P 100, OEF
0.71% Growth SmallCap R 2000, IWO
0.69% Bond, Corp, LQD
0.69% Water Resources, PHO
0.69% Japan Index, EWJ
0.69% Pacific ex-Japan, EPP
0.66% Technology SPDR, XLK
0.66% Pacific VIPERs, VPL
0.66% LargeCap Blend Russell 3000, IWV
0.65% South Korea Index, EWY
0.64% Growth BARRA Small Cap 600, IJT
0.64% Energy VIPERs, VDE
0.63% Dividend DJ Select, DVY
0.63% Switzerland Index, EWL
0.60% Spain Index, EWP
0.60% Value EAFE MSCI, EFV
0.59% Energy Global, IXC
0.57% Mexico Index, EWW
0.56% Growth SmallCap VIPERs, VBK
0.55% Value MidCap Russell, IWS
0.55% Blend Total Market VIPERs, VTI
0.54% LargeCap VIPERs, VV
0.54% Biotech SPDR, XBI
0.52% LargeCap 1000 R, IWB
0.51% Global 100, IOO
0.50% Growth S&P 500/BARRA, IVW
0.48% Dividend SPDR, SDY
0.48% Value 1000 Russell, IWD
0.48% Bond, 10 Year Treasury, IEF
0.47% Value MidCap S&P 400 B, IJJ
0.47% Natural Resource iS GS, IGE
0.46% S&P 500 iS LargeCap Blend, IVV
0.45% Gold Shares S.T., GLD
0.44% Turkey MSCI iS, TUR
0.44% Dividend Appreciation Vipers, VIG
0.43% Materials SPDR, XLB
0.43% Emerging 50 BLDRS, ADRE
0.42% Small Cap EAFE MSCI iS, SCZ
0.41% SmallCap S&P 600, IJR
0.40% Basic Materials DJ US, IYM
0.39% Growth 1000 Russell, IWF
0.39% Growth MidCap 400 B, IJK
0.38% Europe 350 S&P Index, IEV
0.37% Global ex US ACWI iS, ACWX
0.37% Hong Kong Index, EWH
0.37% MidCap S&P 400 iS, IJH
0.36% Transportation Av DJ, IYT
0.36% China LargeCap Growth G D H USX PS, PGJ
0.35% Bond, Aggregate, AGG
0.35% Consumer Staples SPDR, XLP
0.34% LargeCap Blend S&P=Weight R, RSP
0.30% DIAMONDS (DJIA), DIA
0.29% Info Tech VIPERs, VGT
0.29% United Kingdom Index, EWU
0.28% China 25 iS, FXI
0.28% Agriculture DB PS, DBA
0.27% Energy SPDR, XLE
0.26% Technology DJ US, IYW
0.24% MidCap Russell, IWR
0.24% Growth VIPERs, VUG
0.23% EAFE Index, EFA
0.22% Bond, TIPS, TIP
0.20% Russia MV, RSX
0.20% France Index, EWQ
0.19% MidCap S&P 400 SPDRs, MDY
0.14% Singapore Index, EWS
0.14% Consumer Discretionary SPDR, XLY
0.14% Telecom DJ US, IYZ
0.07% Belgium Index, EWK
0.04% Emerging Markets, EEM
0.03% Growth EAFE MSCI, EFG
0.03% Growth MidCap Russell, IWP
0.03% Bond Muni ATM-Free S&P iS, MUB
0.02% Bond, 1-3 Year Treasury, SHY
0.02% European VIPERs, VGK
0.02% Bond Ex-US Treas, BWX
0.02% Utilities SPDR, XLU
0.00% Netherlands Index, EWN
-0.05% Preferred Stock iS, PFF
-0.06% Financial Preferred, PGF
-0.06% Industrial SPDR, XLI
-0.06% Emerging VIPERs, VWO
-0.10% WilderHill Clean Energy PS, PBW
-0.12% India PS, PIN
-0.13% Bond, High-Yield Corporate, HYG
-0.18% Indonesia MV, IDX
-0.20% Sweden Index, EWD
-0.24% Canada Index, EWC
-0.25% Semiconductor iS GS, IGW
-0.30% Australia Index, EWA
-0.30% Networking, IGN
-0.37% Growth LargeCap NASDAQ 100, QQQQ
-0.41% Brazil Index, EWZ
-0.43% Malaysia Index, EWM
-0.43% Semiconductor SPDR, XSD
-0.45% Homebuilders SPDR, XHB
-0.48% Thailand MSCI iS, THD
-0.51% Real Estate US DJ, IYR
-0.57% Bond EmrgMkt JPM iS, EMB
-0.88% Taiwan Index, EWT
-1.02% Chile MSCI iS, ECH
-9.55% S&P 500 SPDRs LargeCap Blend, SPY