The S&P 500 (SPX: 1,428.59) fell 5 of the past 6 trading days following a failed challenge to its September 14th high. On Friday, SPX closed below both its lows of the previous 5 weeks and below a 4-month uptrend line rising from the year’s low on 6/4/12. SPX also broke down below its 50-day SMA (now standing at 1428.38) during the Friday’s session but managed to close above it by just 0.21.

It looks to me like this bull has 1 hoof on the edge of the cliff and 3 hooves dangling in the air below. If the bull loses his 1-hoof grip, a swift drop to the 200-day SMA (now standing at 1368.45) might be possible. That would be a 4% downside correction from here.

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.

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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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The CFTC’s Commitments of Traders report for stock indexes shows smart professionals selling heavily to dumb speculators. Large commercial hedging firms enjoy an enormous inside informational advantage over speculators, who are usually wrong at major market turning points, according to Steve Briese, bullishreview.com. The current maximum bearish reading indicates that a major top is brewing and next move should be down big, possibly to SPX 1074.77, the low of 10/4/2011.

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
1440.24, high of 5/19/2008
1439.15, high of 9/12/2012
1430.53, low of 9/26/2012

The S&P 500 Composite Potential Support
1428.38, 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
1369.45, 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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Fixed-Income Investments

Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) whipsawed back above its 50-day SMA on 10/12/12, thereby turning systematically bullish again. TLT whipsawed back above its 200-day SMA on 9/19/12. TLT’s 50-day SMA has remained above its 200-day SMA every day since 6/24/11. Support 120.92, 120.67, 118.05, 117.44, 115.69, 114.82, 109.69, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance: 125.09, 127.72, 130.69, and 132.22.

Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) whipsawed back above its 50-day SMA on 10/10/12, thereby turning systematically bullish again. IEF remains above its 200-day SMA, and its 50-day SMA has remained above its 200-day SMA every day since 6/21/11. Support 107.23, 106.42, 105.84, 105.22, 104.77, 103.90, 102.51, 101.77, 101.36, 101.11, 99.79, and 97.66. Resistance: 108.70, 108.99, 109.32, and 109.89.
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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 21.96, 22.36, 22.45, 23.14, 23.52, 25.84, 27.19, 28.97.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below its lows of the previous 3 months on 10/12/12. DBA turned systematically neutral on 9/17/12 when price crossed below its 50-day SMA. DBA remains above its 200-day SMA but could cross below in days ahead if DBA continues to decline like it has over the past 4 last weeks. DBA’s 50-day SMA remains well 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 32.52, 32.45, 31.40, 29.02, 26.28, and 22.74. Resistance 34.70, 37.17, 38.31, 40.29, 41.38, 42.30, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) fell below its lows of the previous 2 weeks on 10/12/12, suggesting a minor correction. 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: 174.07, 175.46, 177.40, and 185.85.

Gold Mining Stocks ETF/Gold Shares ETF Relative Strength Ratio (GDX/GLD) fell below its lows of the previous 4 weeks on 10/12/12, suggesting a minor correction. 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, and the 50 could cross above the 200 in days ahead.

Silver, iShares Silver Trust ETF (SLV) fell below its lows of the previous 2 weeks on 10/12/12, suggesting a minor correction. 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: 33.23, 34.08, 36.44, 40.23, 41.49, 42.30, 42.78, 44.71, and 48.35.

Silver/Gold ETFs Ratio (SLV/GLD) fell below its lows of the previous 5 weeks on 10/12/12, suggesting a minor correction. SLV/GLD turned systematically bullish on 10/9/12 when its 50-day SMA crossed above the 200-day SMA. SLV/GLD crossed above its 50-day SMA on 8/16/12 and crossed above its 200-day SMA on 8/31/12.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN (JJC) price fell below its lows of the previous 4 weeks on 10/12/12, suggesting a minor correction. JJC 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, however, and a crossover appears possible in weeks ahead if price holds up or rises. “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
4.04% , ECL , ECOLAB
4.16% , KMX , CarMax
1.77% , CHRW.O , CH Robinson Worldwide Inc, CHRWD
1.57% , MPEL , Melco Crown Entertainment, MPEL
1.13% , PCL , PLUM CREEK TIMB
3.64% , DELL , DELL
0.63% , PGR , PROGRESSIVE OHIO
0.25% , IXN , Technology Global, IXN
0.70% , HOLX , Hologic, Inc., HOLX
0.49% , CBE , COOPER INDS STK A
0.56% , EMB , Bond EmrgMkt JPM iS, EMB
0.45% , NE , NOBLE
0.79% , SDS , Short 200% S&P 500 PS, SDS
0.33% , PEP , PEPSICO
0.05% , GVI , Bond Interm U.S. Gov, GVI
0.25% , EWO , Austria Index, EWO
0.72% , ETN , EATON
0.31% , LLL , L-3 COMMS HLDGS
0.06% , AON , AON
0.06% , DDM , Ultra Dow30 Double, DDM
0.11% , LEN , Lennar Corp. (LEN)
0.07% , ADM , ARCHER DANIELS

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-14.38% , AMD , ADV MICRO DEV
-3.90% , FITB , FIFTH THIRD BANC
-3.43% , ETFC , E*TRADE FINANCIAL
-2.87% , SNV , SYNOVUS
-2.64% , WFC , WELLS FARGO
-4.46% , RF , REGIONS FINAN
-3.10% , HBAN , HUNTINGTON
-4.32% , FHN , First Horizon National
-3.48% , KEY , KEYCORP
-1.32% , PCG , PG&E
-2.33% , SWK , Stanley Black & Decker
-3.42% , PNC , PNC FINL SVC
-2.59% , BBT , BB&T
-1.95% , USB , US BANCORP
-2.10% , MTB , M&T BANK
-2.39% , TJX , TJX
-1.67% , SCHW.K , CHARLES SCHWAB, SCHW.O
-0.75% , VB , Small Cap VIPERs, VB
-2.35% , BK , BANK OF NEW YORK
-3.38% , STI , SUNTRUST BANKS
-0.65% , PRF , Value LargeCap Fundamental RAFI 1000, PRF
-1.22% , HSY , HERSHEY FOODS
-3.00% , RFMD , RF Micro Devices Inc
-2.15% , CMA , COMERICA
-1.15% , COF , CAPITAL ONE FNCL
-1.14% , JPM , J P MORGAN CHASE
-0.44% , VO , MidCap VIPERs, VO
-2.36% , BAC , BANK OF AMERICA
-0.63% , CCE , COCA COLA ENTER
-0.78% , LTD , LIMITED BRANDS
-0.79% , COST , COSTCO WHOLESAL
-1.74% , T , AT&T Corp., T
-0.95% , NOV , NATIONAL OILWELL VARC0
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
0.80% China 25 iS, FXI
0.80% Transportation Av DJ, IYT
0.69% Indonesia MV, IDX
0.56% Bond, Emerg Mkt JPM iS, EMB
0.33% Bond Ex-US Treas, BWX
0.32% Bear, Short S&P 500, SH
0.32% Switzerland Index, EWL
0.32% Belgium Index, EWK
0.30% Singapore Index, EWS
0.27% Chile MSCI iS, ECH
0.25% Austria Index, EWO
0.25% Bond, 20+ Years Treasury, TLT
0.24% France Index, EWQ
0.20% Frontier Markets Guggenheim , FRN
0.20% Mexico Index, EWW
0.17% Bond, High Yield Corp iBoxx iS, HYG
0.14% Technology DJ US, IYW
0.13% Info Tech VIPERs, VGT
0.11% Bond, Long-Term Corp iBoxx iS, LQD
0.11% Japan Index, EWJ
0.11% Industrial SPDR, XLI
0.11% Bond, Muni S&P ATM-Free iS, MUB
0.10% Bond, High-Yield Junk, JNK
0.09% Thailand MSCI iS, THD
0.08% Consumer Staples SPDR, XLP
0.08% Bond, Intermediate US Aggregate iS, AGG
0.04% Germany Index, EWG
0.04% Bond, 1-3 Year Treasury, SHY
0.03% Global 100, IOO
0.01% Bond, 10 Year Treasury, IEF
0.00% Growth EAFE MSCI, EFG
0.00% DIAMONDS (DJIA), DIA
0.00% Bond Treasury Short-Term iS, SHV
-0.02% Consumer Discretionary SPDR, XLY
-0.03% Europe 350 S&P Index, IEV
-0.04% Sweden Index, EWD
-0.05% QQQ Nasdaq 100 Trust, QQQ
-0.05% Turkey MSCI iS, TUR
-0.05% Water Resources, PHO
-0.05% SmallCap Blend EAFE MSCI iS, SCZ
-0.05% Netherlands Index, EWN
-0.05% Financial Preferred, PGF
-0.06% Growth VIPERs, VUG
-0.06% United Kingdom Index, EWU
-0.07% Dividend International, PID
-0.07% EMU Europe Index, EZU
-0.07% Technology SPDR, XLK
-0.07% Malaysia Index, EWM
-0.07% Preferred Stock iS, PFF
-0.08% Italy Index, EWI
-0.08% Bond, TIPS U.S. Treasury iS, TIP
-0.08% Dividend Appreciation Vipers, VIG
-0.09% European VIPERs, VGK
-0.09% Value EAFE MSCI, EFV
-0.09% Dividend ex-U.S. DJ iS, IDV
-0.11% LargeCap Growth Russell 1000 iS, IWF
-0.11% Foreign LargeCap EAFE MSCI iS, EFA
-0.12% Pacific VIPERs, VPL
-0.13% LargeCap Growth S&P 500 iS, IVW
-0.15% Health Care SPDR, XLV
-0.17% Global LargeCap Blend MSCI iS, ACWI
-0.23% Global ex U.S. LargeCap Blend, ACWX
-0.27% Biotech SPDR, XBI
-0.29% Emerging VIPERs, VWO
-0.29% Growth MidCap Russell, IWP
-0.31% Emerging Markets MSCI iS, EEM
-0.33% S&P 500 SPDRs LargeCap Blend, SPY
-0.33% Australia Index, EWA
-0.34% LargeCap VIPERs, VV
-0.35% LargeCap Blend S&P 100, OEF
-0.35% REIT VIPERs, VNQ
-0.36% Pacific ex-Japan, EPP
-0.36% Spain Index, EWP
-0.38% LargeCap Blend Russell 1000 iS, IWB
-0.38% Emerging 50 BLDRS, ADRE
-0.39% Hong Kong Index, EWH
-0.41% Realty Cohen & Steers, ICF
-0.41% LargeCap Blend Russell 3000 iS, IWV
-0.42% REIT Wilshire, RWR
-0.42% LargeCap Blend S&P 500 iS, IVV
-0.44% Real Estate US DJ iS, IYR
-0.44% Blend Total Market VIPERs, VTI
-0.44% Materials SPDR, XLB
-0.46% Energy Global, IXC
-0.46% Dividend SPDR, SDY
-0.47% Latin Am 40, ILF
-0.48% Energy DJ, IYE
-0.48% LargeCap Blend S&P=Weight R, RSP
-0.48% Brazil Index, EWZ
-0.49% Homebuilders SPDR, XHB
-0.50% Dividend U.S. DJ iS, DVY
-0.51% MidCap Russell, IWR
-0.52% MidCap Growth S&P 400 iS, IJK
-0.54% Taiwan Index, EWT
-0.55% Value LargeCap Dynamic PS, PWV
-0.55% Energy SPDR, XLE
-0.55% Telecom DJ US, IYZ
-0.56% Canada Index, EWC
-0.56% South Africa Index, EZA
-0.57% Utilities SPDR, XLU
-0.58% Semiconductor iS IGW, SOXX
-0.59% Growth SmallCap VIPERs, VBK
-0.59% Value MidCap Russell, IWS
-0.59% Energy VIPERs, VDE
-0.59% Value VIPERs, VTV
-0.60% SmallCap Growth S&P 600 iS, IJT
-0.61% Utilities VIPERs, VPU
-0.62% Russia MV, RSX
-0.64% LargeCap Value S&P 500 iS, IVE
-0.65% SmallCap Growth Russell 2000 iS, IWO
-0.65% LargeCap Value Russell 1000 iS, IWD
-0.71% Energy & Nat Res iS GS, IGE
-0.74% Gold Shares S.T., GLD
-0.75% South Korea Index, EWY
-0.75% Small Cap VIPERs, VB
-0.76% Microcap Russell, IWC
-0.77% MidCap Blend S&P 400 iS, IJH
-0.79% Oil Fund PowerShares, DBO
-0.80% China LargeCap Growth G D H USX PS, PGJ
-0.81% SmallCap Blend Russell 2000 iS, IWM
-0.82% MidCap S&P 400 SPDRs, MDY
-0.85% Oil, Crude, U.S. Oil Fund, USO
-0.89% Basic Materials DJ US, IYM
-0.89% SmallCap Blend S&P 600 iS, IJR
-0.92% MidCap Value S&P 400 iS, IJJ
-0.93% Agriculture DB PS, DBA
-0.93% Dividend High Yield Equity PS, PEY
-0.96% Value SmallCap VIPERS, VBR
-0.99% Networking, IGN
-1.04% SmallCap Value Russell 2000 iS, IWN
-1.06% SmallCap Value S&P 600 iS, IJS
-1.10% India Earnings WTree, EPI
-1.19% Financial DJ US, IYF
-1.21% Semiconductor SPDR, XSD
-1.24% WilderHill Clean Energy PS, PBW
-1.34% Financials VIPERs, VFH
-1.37% Silver Trust iS, SLV
-1.37% Financial SPDR, XLF
-1.38% Capital Markets KWB ST, KCE
-1.38% Commodity Tracking, DBC
-1.55% India PS, PIN
-1.77% Financial Services DJ, IYG
-2.28% Metals & Mining SPDR, XME