The S&P 500 Composite (SPX, 1,254.19) rose 15.94 points or 1.29% on Monday, October 24, 2011.

SPX rose above the highs of the previous 11 weeks, confirming a short-term upside correction.

NYSE volume fell 14% and was 11% below its 200-day SMA.

SPX has recovered most of its loss from its May high. At the day’s high of 1,256.55, SPX tested Fibonacci 61.8% of its range for the year 2011. That is entirely within normal and expected ranges for a counter-trend reaction. Nothing unusual here.

Most of the gains for this bounce over the past 15 trading days occurred in the first 5 trading days. It has been more of a struggle since. My most sensitive short-term price momentum indicators peaked on 10/10/11, and so they have not been confirming the struggling price advance for the most recent 10 trading days. This short-term bearish price momentum divergence could lead to a price pullback in days ahead.

The Dow Theory reconfirmed an upward Ripple on 10/24/11. Ripples are the very minor day-to-day fluctuations that are of concern only to short-term traders and not at all to Dow Theorists. Ripples can last from a day to several weeks, and this one has lasted 15 trading days.

Much more significantly, the Dow Theory signaled a Primary Tide Bear Market on 8/2/11, when both Averages closed below their closing price lows of the previous 11 months. This Bear Market was confirmed on 10/3/11 by lower closing price lows for both Averages.

A Dow Theory Primary Tide Bear Market is a powerful beast that must not be underestimated. The median Dow Theory Primary Tide Bear Market in history lasts 16 months and takes stock prices down 34%.
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Stock Market Indicators

NASDAQ Composite/S&P 500 Relative Strength Ratio has been correcting gains over the past 4 weeks. The Ratio rose above previous 10-year highs on 9/23/11, reconfirming a major long-term uptrend.

iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below 31-month lows on 10/4/11, reconfirming a major long-term downtrend. This basket of the stocks of Brazil, Russia, India, and China is in a relatively bearish major trend.

Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) broke down below 29-month lows on 9/22/11, reconfirming its preexisting bearish major trend. Absolute price broke down below 2-year lows on 10/4/11.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) broke down below 7-year lows on 9/19/11, reconfirming its preexisting bearish major trend. Absolute price broke down below 2-year lows on 10/4/11.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) OEX/SPX broke down below 5-week lows on 10/24/11, confirming a short-term correction to the downside . Large Caps tend to underperform Mid Caps and Small Caps in bullish general market trends as investors prefer riskier and more volatile stocks. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative safety of large size.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) broke down below the lows of the previous 20-months on 10/3/11, thereby reconfirming a major downtrend.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) broke down below the lows of the previous 18-months on 10/3/11, reconfirming a bearish long-term major trend.

Advisory Service Sentiment: There were 35.8% Bulls versus 41.0% Bears as of 10/19/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio rose to 0.87, up from 0.74 the previous week, which was the lowest level since the big bear market of 2007- 2009. The Bull/Bear Ratio is now more 1 standard deviation below the 20-year average. It was more than 2 standard deviations above the 20-year average at the end of April, 2011. The 20-year median is 1.56 and the mean is 1.64. Sentiment is not so easy to interpret. Contrary to what many contrarians seem to believe, when advisors turn this bearish, stocks sometimes have much further to fall. Examples include similar levels of bearish sentiment in April 1973 and in July 2008, after which stock prices fell much further.

VIX Fear Index fell to 28.08 on 10/14/11, down from a high of 48.00 on 8/8/11, suggesting that fear has decreased from August levels. 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 S&P 500 Composite (SPX: 1,238.25) 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
1307.28, Fibonacci 78.6% of 2011 range
1274.61, 200-day SMA
1258.07, low of 6/16/11
1257.58, Fibonacci 61.8% of 2011 range

S&P 500 Composite (SPX: 1,238.25) Potential Support
1249.05, low of 3/16/11
1246.73, high of 12/13/10
1238.81, Fibonacci 78.6% of 1,576.09 high
1222.68, Fibonacci 50% of 2011 range
1204.49, Fibonacci 23.6% of 2009-11 range
1190.58, low of 10/13/2011
1187.77, Fibonacci 38.2% of 2011 range
1144.38, Fibonacci 23.6% of 2011 range
1101.73, Fibonacci 38.2% of 2009-11 range
1074.77, low of 10/4/2011
1039.70, low of 8/27/10
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
1018.69, Fibonacci 50% of 2009-11 range
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
935.64, Fibonacci 61.8% of 2009-11 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
817.40, Fibonacci 78.6% of 2009-11 range
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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Tangible Assets, Commodities

U.S. dollar ETF (UUP) price fell below the lows of the previous 7 weeks on 10/24/11, reconfirming its preexisting short-term downside correction. Support 21.42 and 20.84. Resistance 21.91 and 22.63.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below the lows of the previous 10 months on 10/3/11, which reconfirmed a major long-term downtrend.

Crude Oil, United States Oil ETF (USO) price rose above the highs of the previous 11 weeks on 10/24/11, suggesting a short-term upside correction. Support 32.52, 29.10, 26.28, and 22.74. Resistance 39.25, 40.74, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) price has been consolidating losses since breaking down below the lows of the previous 9 weeks on 9/26/11,. Support: 154.19, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: 164.00, 165.72, 170.32, 177.40, and 185.85.

Gold Mining Stocks ETF/ Gold Shares ETF Relative Strength Ratio (GDX/GLD) remains bearishly below its falling 50-day and 200-day SMAs. GDX/GLD fell below 29-month lows on 8/8/11, reconfirming a bearish major trend for the long term. Investors still prefer Gold bullion over Gold Miners.

Silver, iShares Silver Trust ETF (SLV) price consolidated losses over the past 4 weeks. SLV price broke down below the lows of the previous 7 months on 9/26/11, which confirmed a bearish major trend for the long term. SLV fell back below its 50-day SMA on 9/19/11 and fell below its 200-day SMA on 9/22/11. Support 27.41, 26.03, and 24.44. Resistance: 31.96, 32.62, 34.51, 40.23, 41.49, 42.30, 42.78, 44.71 and 48.35.

Silver/Gold ETFs Ratio (SLV/GLD) broke down below the lows of the previous 11 months on 9/30/11, reconfirming a bearish major trend for the long term. 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-Index ETN (JJC) price whipsawed above the highs of the previous 4 weeks on 10/24/11, suggesting a short-term upside correction. JJC broke down below the lows of the previous 14 months on 10/5/11, confirming a bearish major trend for the long term. Major trend weakness in Copper suggests serious concerns about the economic outlook.
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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
4.45% , XSD , Semiconductor SPDR, XSD
2.45% , JKG , MidCap Blend Core iS M, JKG
3.97% , IDX , Indonesia MV, IDX
1.91% , ACWX , Global ex US ACWI iS, ACWX
3.50% , TUR , Turkey MSCI iS, TUR
3.08% , KCE , Capital Markets KWB ST, KCE
11.89% , ODP , OFFICE DEPOT
1.66% , IYH , Healthcare DJ, IYH
9.96% , LAMR , Lamar Advertising Company
2.34% , PSTL , Steel Global PS ETF, PSTL
11.54% , CROX , CROCS Inc., CROX
1.76% , FEU , Value LargeCap Euro STOXX 50 DJ, FEU
2.96% , DBO , Oil Fund PowerShares, DBO
4.42% , BHH , Internet B2B H, BHH
4.76% , UIS , UNISYS
1.39% , ADRD , Developed 100 BLDRS, ADRD
4.77% , HUM , HUMANA
2.16% , FRN , Frontier Markets Guggenheim , FRN
2.75% , IWC , Microcap Russell, IWC
2.89% , JNK , Bond, High-Yield Junk, JNK
1.47% , IIH , Internet Infrastructure H, IIH
6.96% , NBR , NABORS
1.51% , XLV , Health Care SPDR, XLV
2.63% , RPG , Growth S&P 500, RPG
2.11% , GRMN , GARMIN LTD
5.39% , LXK , LEXMARK INTL STK A
1.79% , PPA , Aerospace & Defense, PPA
1.87% , RSP , LargeCap Blend S&P=Weight R, RSP
7.20% , AMD , ADV MICRO DEV
10.36% , OMX , OFFICEMAX INC., OMX
3.06% , VXF , Extended Mkt VIPERs, VXF
2.98% , BDH , Broadband H, BDH
3.66% , IJT , Growth BARRA Small Cap 600, IJT

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-3.07% , MYY , Short 100% MidCap 400, MYY
-4.59% , KMB , KIMBERLY CLARK
-2.09% , PSQ , Short 100% QQQ, PSQ
-2.89% , S , SPRINT NEXTEL
-0.16% , MUB , Bond Muni ATM-Free S&P iS, MUB
-1.82% , VLO , VALERO ENERGY
-0.58% , LO , Lorillard, Inc. LO
-0.95% , DOG , Short 100% Dow 30, DOG
-2.85% , CL , COLGATE
-5.90% , MZZ , Short 200% MidCap 400 PS, MZZ
-0.86% , HANS , Hansen Natural, HANS
-0.44% , GR , GOODRICH CORP
-0.45% , NSC , NORFOLK SOUTHERN
-0.83% , CHD , Church & Dwight
-0.12% , TLH , Bond 10-20 Year US Treas, TLH
-1.31% , SH , Short 100% S&P 500, SH
-1.73% , GIS , GENERAL MILLS
-0.62% , IFF , INTL FLAV & FRAG
-0.37% , VDC , Consumer Staples VIPERs, VDC
-1.27% , SO , SOUTHERN
-0.66% , XEL , XCEL ENERGY
-0.85% , PPL , PPL
-1.58% , LOW , LOWES
-1.04% , DVN , DEVON ENERGY
-1.29% , D , DOMINION RSCS
-0.16% , AGG , Bond, Aggregate, AGG
-0.74% , LLL , L-3 COMMS HLDGS
-1.74% , MTG , MGIC INVESTMENT
-0.91% , RAI , Reynolds American
-0.43% , XLU , Utilities SPDR, XLU
-0.57% , PETM , PETsMART Inc
-0.06% , FDL , Dividend Leaders, FDL
-1.00% , PCG , PG&E
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
5.44% China 25 iS, FXI
5.32% Silver Miners Global X, SIL
5.23% China LargeCap Growth G D H USX PS, PGJ
5.00% Metals & Mining SPDR, XME
4.72% South Korea Index, EWY
4.69% Russia MV, RSX
4.52% Oil, Crude, U.S. Oil Fund, USO
4.45% Semiconductor SPDR, XSD
4.33% Chile MSCI iS, ECH
4.05% WilderHill Clean Energy PS, PBW
4.01% Brazil Index, EWZ
3.97% Indonesia MV, IDX
3.92% Emerging Markets, EEM
3.85% Emerging 50 BLDRS, ADRE
3.70% Water Resources, PHO
3.69% Emerging VIPERs, VWO
3.66% Growth BARRA Small Cap 600, IJT
3.65% Latin Am 40, ILF
3.59% Growth SmallCap R 2000, IWO
3.52% Growth SmallCap VIPERs, VBK
3.52% South Africa Index, EZA
3.50% Turkey MSCI iS, TUR
3.35% Small Cap VIPERs, VB
3.34% Semiconductor iS IGW, SOXX
3.25% Growth MidCap 400 B, IJK
3.22% SmallCap Russell 2000, IWM
3.21% Australia Index, EWA
3.21% Networking, IGN
3.20% Mexico Index, EWW
3.17% Basic Materials DJ US, IYM
3.15% SmallCap S&P 600, IJR
3.08% Capital Markets KWB ST, KCE
3.06% Taiwan Index, EWT
3.02% Thailand MSCI iS, THD
2.98% Value SmallCap VIPERS, VBR
2.96% Oil Fund PowerShares, DBO
2.94% MidCap S&P 400 iS, IJH
2.93% Value SmallCap S&P 600 B, IJS
2.91% Value SmallCap Russell 2000, IWN
2.90% Homebuilders SPDR, XHB
2.90% Singapore Index, EWS
2.89% Bond, High-Yield Junk, JNK
2.89% Pacific ex-Japan, EPP
2.86% MidCap S&P 400 SPDRs, MDY
2.75% Microcap Russell, IWC
2.71% Bond, High-Yield Corporate, HYG
2.65% Real Estate US DJ, IYR
2.64% REIT Wilshire, RWR
2.62% Growth MidCap Russell, IWP
2.61% Biotech SPDR, XBI
2.59% Value MidCap S&P 400 B, IJJ
2.52% Realty Cohen & Steers, ICF
2.48% REIT VIPERs, VNQ
2.48% Hong Kong Index, EWH
2.44% Financial Services DJ, IYG
2.40% Materials SPDR, XLB
2.36% Financial DJ US, IYF
2.36% MidCap Russell, IWR
2.29% Financials VIPERs, VFH
2.25% Technology DJ US, IYW
2.24% Canada Index, EWC
2.23% Info Tech VIPERs, VGT
2.21% Financial SPDR, XLF
2.16% Frontier Markets Guggenheim , FRN
2.15% Energy & Nat Res iS GS, IGE
2.08% QQQ Nasdaq 100 Trust, QQQ
1.96% Value MidCap Russell, IWS
1.91% Small Cap EAFE MSCI iS, SCZ
1.91% Global ex US ACWI iS, ACWX
1.87% LargeCap Blend S&P=Weight R, RSP
1.87% Industrial SPDR, XLI
1.86% Pacific VIPERs, VPL
1.84% Growth EAFE MSCI, EFG
1.71% Sweden Index, EWD
1.69% Transportation Av DJ, IYT
1.68% Blend Total Market VIPERs, VTI
1.67% Growth 1000 Russell, IWF
1.66% Growth VIPERs, VUG
1.65% France Index, EWQ
1.62% LargeCap Blend Russell 3000, IWV
1.58% Commodity Tracking, DBC
1.58% Germany Index, EWG
1.57% Technology SPDR, XLK
1.53% Growth S&P 500/BARRA, IVW
1.51% Health Care SPDR, XLV
1.50% EAFE Index, EFA
1.48% India Earnings WTree, EPI
1.48% LargeCap 1000 R, IWB
1.48% Consumer Discretionary SPDR, XLY
1.45% Energy VIPERs, VDE
1.45% LargeCap VIPERs, VV
1.42% India PS, PIN
1.40% EMU Europe Index, EZU
1.40% Global 100, IOO
1.39% United Kingdom Index, EWU
1.39% European VIPERs, VGK
1.36% Dividend High Yield Equity PS, PEY
1.35% Value 1000 Russell, IWD
1.32% Austria Index, EWO
1.31% Energy SPDR, XLE
1.30% S&P 500 iS LargeCap Blend, IVV
1.30% Energy DJ, IYE
1.28% Spain Index, EWP
1.28% Silver Trust iS, SLV
1.26% Europe 350 S&P Index, IEV
1.23% Value VIPERs, VTV
1.23% Value LargeCap Dynamic PS, PWV
1.23% S&P 500 SPDRs LargeCap Blend, SPY
1.15% Value S&P 500 B, IVE
1.14% Agriculture DB PS, DBA
1.13% Netherlands Index, EWN
1.13% Dividend International, PID
1.07% Energy Global, IXC
1.04% Japan Index, EWJ
1.04% LargeCap Blend S&P 100, OEF
1.03% Value EAFE MSCI, EFV
1.02% Italy Index, EWI
0.94% Belgium Index, EWK
0.94% Gold Shares S.T., GLD
0.90% Financial Preferred, PGF
0.89% Dividend DJ Select, DVY
0.87% DIAMONDS (DJIA), DIA
0.79% Dividend Appreciation Vipers, VIG
0.75% Malaysia Index, EWM
0.62% Bond EmrgMkt JPM iS, EMB
0.60% Preferred Stock iS, PFF
0.60% Switzerland Index, EWL
0.53% Dividend SPDR, SDY
0.51% Bond, Corp, LQD
0.42% Telecom DJ US, IYZ
0.30% Bond, TIPS, TIP
0.25% Bond Ex-US Treas, BWX
0.17% Bond, 20+ Years Treasury, TLT
0.00% Bond, 1-3 Year Treasury, SHY
-0.02% Bond Treasury Short-Term iS, SHV
-0.05% Bond, 10 Year Treasury, IEF
-0.16% Bond, Aggregate, AGG
-0.16% Bond Muni ATM-Free S&P iS, MUB
-0.16% Utilities VIPERs, VPU
-0.43% Utilities SPDR, XLU
-0.70% Consumer Staples SPDR, XLP