Stocks mostly traded within Thursday’s extreme price ranges on Friday, consolidating steep losses with an “Inside Day”.

In the old days, traders might have called Thursday’s market rout a “bear raid”. That happened when predatory traders cancel bids and sell heavily to force down price as low as possible, triggering protective sell stops and forced liquidation and creating panic. After prices drop as far as they can drop, these traders buy heavily to drive price back up–and make billions.

In modern times, proprietary trading algorithms that can front-run orders could be set to automatically execute a predatory strategy. The “market makers” who own the machines could claim ignorance and blame it on “computer glitches”.

Check out this reference: http://www.princeton.edu/~markus/research/papers/predatory_trading_slides.pdf
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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
5.31% , AIG , AMER INTL GROUP
1.14% , EWI , Italy Index, EWI
3.56% , KG , KING PHARM
2.30% , ITF , Japan LargeCap Blend TOPIX 150, ITF
0.96% , ADRU , Europe 100 BLDRS, ADRU
0.78% , EWP , Spain Index, EWP
0.34% , EWQ , France Index, EWQ
2.02% , FMCN , Focus Media, FMCN
1.00% , EWS , Singapore Index, EWS
2.71% , MYY , Short 100% MidCap 400, MYY
0.65% , PST , 200% Short Bond 7-10 Yr T, PST
2.34% , PSQ , Short 100% QQQ, PSQ
1.33% , DOG , Short 100% Dow 30, DOG
1.26% , FRX , FOREST LABS STK A
2.95% , DXD , Short 200% Dow 30 PS, DXD
0.94% , SPG , SIMON PROP GRP
1.24% , RAI , RJR TOBACCO HLDS
1.81% , EWT , Taiwan Index, EWT
0.93% , ADM , ARCHER DANIELS
1.01% , PMCS , PMC SIERRA
0.60% , CBE , COOPER INDS STK A
0.84% , EPP , Pacific ex-Japan, EPP
0.61% , WAG , WALGREEN
0.25% , NTRS , NORTHERN TRUST
1.31% , SO , SOUTHERN
0.64% , LLY , ELI LILLY
0.50% , AA , ALCOA
3.93% , SLV , Silver Trust iS, SLV
1.33% , AMD , ADV MICRO DEV
0.29% , ED , CON ED
0.45% , EZA , South Africa Index, EZA
0.51% , ECL , ECOLAB
0.25% , BMY , BRISTOL MYERS
0.78% , EWH , Hong Kong Index, EWH
1.66% , SH , Short 100% S&P 500, SH
0.81% , ATI , ALLEGHENY TECH
0.45% , NUE , NUCOR
0.37% , MON , MONSANTO
0.06% , EMR , EMERSON ELECTRIC
0.42% , DUK , DUKE ENERGY

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-12.20% , HANS , Hansen Natural, HANS
-9.42% , TXT , TEXTRON
-2.89% , VXF , Extended Mkt VIPERs, VXF
-6.70% , FLR , FLUOR
-3.83% , PZI , Micro Cap Zachs, PZI
-2.78% , IGN , Networking, IGN
-3.42% , ITT , ITT INDS
-4.85% , IIH , Internet Infrastructure H, IIH
-0.59% , TLH , Bond 10-20 Year US Treas, TLH
-2.37% , RPV , Value S&P 500, RPV
-1.45% , EWK , Belgium Index, EWK
-0.89% , IXJ , Healthcare Global, IXJ
-1.65% , IYH , Healthcare DJ, IYH
-3.47% , PHO , Water Resources, PHO
-4.30% , ACV , Alberto-Culver Co.
-7.66% , AES , AES
-5.49% , SCHW.K , CHARLES SCHWAB, SCHW.O
-1.28% , ADRD , Developed 100 BLDRS, ADRD
-4.67% , NTAP , NETWK APPLIANCE
-0.90% , EWO , Austria Index, EWO
-3.43% , JKL , Value SmallCap iS M, JKL
-3.43% , PKI , PERKINELMER
-5.64% , NCR , NCR
-1.68% , IWV , LargeCap Blend Russell 3000, IWV
-4.90% , LBTYA , Liberty Global Inc. (LBTYA)
-2.77% , JKJ , SmallCap Core iS M, JKJ
-6.12% , R , RYDER SYSTEM
-8.82% , CTB , COOPER TIRE
-0.73% , EWN , Netherlands Index, EWN
-4.87% , PLL , PALL
-2.33% , PTE , Telecommunications & Wireless, PTE
-3.38% , WAT , WATERS
-5.41% , SNDK , SanDisk Corporation
-7.57% , HGSI , Human Genome Sciences Inc
-2.26% , TUR , Turkey MSCI iS, TUR
-4.61% , NIHD , NII Holdings, Inc.
-1.27% , IGW , Semiconductor iS GS, IGW
-3.11% , PIV , Value Line Timeliness MidCap Gr, PIV
-3.50% , LNCR , Lincare Holdings Inc
-6.13% , PHM , PULTE HOMES

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

Consumer Discretionary (XLY) Bullish, Overweight. The Relative Strength Ratio (XLY/SPY) rose above 12-year highs on 4/26/10 and remains bullish. Absolute price of XLY fell to a 2-month low and fell below the 50-day SMA on 5/6/10. So, price trend is now neutral. Support 31.03, 31.66, 30.99, 29.90, 29.25, 28.66, 28.21 and 26.62. Resistance and 36.13, 38.25 and 39.09.

Industrial (XLI) Bullish, Overweight. The Relative Strength Ratio (XLI/SPY) rose above 18-month highs on 4/29/10 and remains bullish. Absolute price of XLI fell to a 2-month low and fell below the 50-day SMA on 5/6/10. So, price trend is now neutral. Support 28.44 and 28.15. Resistance 33.46, 34.24, 34.50, and 35.00.

Technology (XLK) Neutral, Market Weight. The Relative Strength Ratio (XLK/SPY) gave a bearish signal when it fell below 2-week lows and both 50- and 200-day simple moving averages on 4/30/10. Absolute price fell to a 3-month low and tested the 200-day SMA on 5/6/10. Price trend is now neutral. Support 22.66, 22.52, 21.30, 20.71, 20.46 and 20.09. Resistance 24.16, 24.68, and 25.69.

Consumer Staples (XLP) Neutral, Market Weight. The Relative Strength Ratio (XLP/SPY) rose above the 50-day SMA on 5/6/10 and is now neutral. Absolute price of XLP fell to an 8-month low and tested the 200-day SMA on 5/6/10. Price trend remains neutral. Support 24.95, 24.48, 24.02, and 22.63. Resistance 28.75, 29.29 and 30.29.

Financial (XLF) Neutral, Market Weight. The Relative Strength Ratio (XLF/SPY) broke below 6-week lows on 4/27/10 and remains neutral. Absolute price of XLF fell to a 2-month low and tested the 200-day SMA on 5/6/10. Price trend remains neutral. Support 15.52, 15.37, and 15.12. Resistance 16.90, 17.12, 17.16, and 17.87.

Health Care (XLV) Neutral, Market Weight. The Relative Strength Ratio (XLV/SPY) fell below 18-month lows on 4/26/10 and remains bearish. Absolute price of XLV fell to an 8-month low and fell below the 200-day SMA on 5/6/10. Price trend remains neutral. Support 28.53 and 27.96. Resistance 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.

Materials (XLB) Neutral, Market Weight. The Relative Strength Ratio (XLB/SPY) fell to its lowest level in 9 months on 5/5/10 and remains bearish. Absolute price of XLB fell to a 3-month low and fell below the 200-day SMA on 5/6/10. Price trend remains neutral. Support 29.48, and 28.95. Resistance 35.47 and 37.56.

Energy (XLE) Neutral, Market Weight. The Relative Strength Ratio (XLE/SPY) fell below its 50-day simple moving average on 5/5/10, and so it is bearish again. Absolute price of XLE fell to a 7-month low and fell below the 200-day SMA on 5/6/10. Price trend remains neutral. Support 52.29 and 51.34. Resistance 62.30, 62.73, 69.95, and 78.10.

Utilities (XLU) Neutral, Market Weight. The Relative Strength Ratio (XLU/SPY) rose above 6-week highs on 5/4/10, thereby turning neutral. Absolute price of XLU rose above 3-month highs on 5/3/10 and remains bullish. Support 25.76, 25.52, and 24.96. Resistance 31.30, 31.64 and 32.08.
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell to a 12-month low on 5/6/10. EEM/SPY trend turned bearish on 4/16/10, according to strict moving average analysis. Absolute price of EEM fell below 3-month lows on 5/6/10 and is bearishly below both 50- and 200-day simple moving averages.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below 5-year lows on 5/6/10 and remains bearish. Absolute price of EFA fell below 10-month lows on 5/6/10 and is bearishly below both 50- and 200-day simple moving averages.

NASDAQ Composite/S&P 500 Relative Strength Ratio fell below its 50-day simple moving average on 5/6/10 rose and remains neutral. Absolute price of the NASDAQ fell below 2-month lows on 5/6/10 and remains neutral.

Growth Stock/Value Stock Relative Strength Ratio (IWF/IWD) fell to a 5-month low on 4/14/10 but has stabilized somewhat since. IWF/IWD remains below both 50- and 200-day simple moving averages. Absolute price of IWF fell below 8-week lows on 5/6/10 and remains neutral.

Russell 1000 Value ETF Relative Strength Ratio (IWD/SPY) rose above 7-month highs on 5/3/10 and remains bullish. Absolute price of IWD closed below 8-week lows on 5/6/10.

The S&P 500 Equally Weighted ETF Relative Strength Ratio (RSP/SPY) fell below its 50-day SMA on 5/7/10, thereby turning neutral. Absolute price of RSP fell below 2-month lows and fell below its 50-day SMA on 5/6/10 and remains neutral.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below the lows of the previous 21 months on 4/26/10 and remains bearish. Absolute price of OEX fell below 2-month lows on 5/6/10 and remains neutral.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below its 50-day SMA on 5/7/10, thereby turning neutral. Absolute price of IWM fell below 2-month lows and fell below its 50-day SMA on 5/6/10 and remains neutral.

The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below its 50-day SMA on 5/7/10, thereby turning neutral. Absolute price of MDY fell below 2-month lows and fell below its 50-day SMA on 5/6/10 and remains neutral.

Crude Oil nearest futures contract price fell below 2-month lows on 5/7/10 and remains neutral. Oil appears to be in a correction phase for the short term. Longer term, Oil remains bullish. Support 74.51, 72.60, 69.50, 68.59 and 65.05. Resistance 87.15, 90.51, 98.65, and 102.84.

Gold nearest futures contract price rose above the highs of the previous 6 months on 5/7/10, thereby confirming its preexisting bullish trend for the intermediate-term. Longer term, Gold remains bullish. Support 1156.2, 1124.3, 1084.8, 1045.2, 1026.9 and 989.3. Resistance 1226.4.

Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) turned neutral on 5/7/10 when it fell below both 50- and 200- day SMAs. Absolute price rose above 3-month highs on 4/30/10 and remains bullish.

Silver/Gold Ratio bounced but remains below 50- and 200- day SMAs and remains bearish.

Copper nearest futures price fell below the lows of the previous 3 months on 5/5/10, again confirming a bearish trend for the short-term. Copper entered a correction phase since peaking at 3.68 on 4/12/10. Longer term, Copper remains bullish. Strength in Copper suggests renewed hope about prospects for the world economy, while weakness suggests doubts. Support 3.29, 3.1505, 3.034, and 2.811. Resistance 3.795 and 4.27.

U.S. Treasury Bond nearest futures contract price jumped up to a new 12-month high on 5/6/10. Support 118.24, 118.12, 115.15, 114.06. 113.04 and 112.15. Resistance 124.16, and 125.03.

Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) fell further below its 200-day SMA on 5/6/10 but remains neutral because the 50-day SMA is still above the 200-day SMA.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) is between 50- and 200-day SMAs and is neutral. This means investors are not clamoring for inflation protection. Absolute price of TIP rose above 22-month highs on 5/6/10 and remains bullish.

The U.S. dollar nearest futures contract price moved above 12-month highs on 5/6/10, thereby confirming its preexisting bullish trend. Support 81.74, 80.14, 79.73, 79.61, 78.83, 78.20, 76.74 and 75.90. Resistance 85.46, 87.22 and 89.71.

The Art of Contrary Thinking: The various surveys of investor sentiment are best considered as background factors. The majority of investors can be right for a long time before a major trend finally changes course. The Art of Contrary Thinking is best used together with more precise market timing tools.

Advisory Service Sentiment: There were 56.0% Bulls versus 18.7% Bears as of 5/5/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio rose to 2.99, down from 3.00 the previous week. The current Bull/Bear ratio is near 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 1.51, and the mean is 1.57.

VIX Fear Index rose to a 13-month high of 42.15 on 5/7/10. A high and rising VIX suggests increasing bearish sentiment. 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.

VXN Fear Index rose to a 13-month high of 42.03 on 5/7/10. A high and rising VIX suggests increasing bearish sentiment. VXN measures NASDAQ Volatility using a method comparable to that used for VIX.

ISEE Call/Put Ratio fell to 0.65 on 5/5/10, a low level that indicates extreme bearish sentiment, which might be taken as a sign to be alert. Its 2-year mean is 1.20, and its typical range is 0.69 to 1.71, which represents two standard deviations from the mean.

CBOE Put/Call Ratio rose to 0.80 on 5/7/10, a high level that indicates moderately bearish sentiment. The 2-year mean is 0.70, and the typical range is 0.44 to 0.96, which represents two standard deviations from the mean.

The Dow Theory again 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.

S&P 500 Composite (SPX) absolute price fell below 2-month lows on 5/6/10 and remains neutral. The S&P is down more than 8% since its peak on 4/23/10 at 1217.28, based on closing prices. Minor corrections of between 5% and 10% are typical in bull markets. Support 1065.79, 1044.50, 1029.38, 1019.95, 1012.42, and 1008.55. Resistance 1219.80, 1220.03 and 1228.74.

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
1065.79, low of 5/6/2010
1044.50, low of 2/5/2010
1029.38, low of 11/2/2009
1019.95, low of 10/2/2009
1012.42, Gann 37.5% of 2009-2010 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
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

3.93% Silver Trust iS, SLV
2.96% Financial Preferred, PGF
2.76% Preferred Stock iS, PFF
1.81% Taiwan Index, EWT
1.38% Bond EmrgMkt JPM iS, EMB
1.30% China 25 iS, FXI
1.14% Italy Index, EWI
1.00% Singapore Index, EWS
0.97% India Earnings WTree, EPI
0.91% India PS, PIN
0.84% Pacific ex-Japan, EPP
0.78% Spain Index, EWP
0.78% Hong Kong Index, EWH
0.61% Malaysia Index, EWM
0.53% Emerging Markets, EEM
0.45% South Africa Index, EZA
0.43% Energy Global, IXC
0.41% Mexico Index, EWW
0.34% France Index, EWQ
0.32% Bond, Corp, LQD
0.32% South Korea Index, EWY
0.27% Bond Ex-US Treas, BWX
0.14% Australia Index, EWA
0.10% Emerging VIPERs, VWO
0.00% Emerging 50 BLDRS, ADRE
-0.01% Bond, High-Yield Corporate, HYG
-0.02% Latin Am 40, ILF
-0.04% Bond, 1-3 Year Treasury, SHY
-0.10% Growth EAFE MSCI, EFG
-0.11% Global ex US ACWI iS, ACWX
-0.11% Canada Index, EWC
-0.13% China LargeCap Growth G D H USX PS, PGJ
-0.15% Pacific VIPERs, VPL
-0.15% Bond Muni ATM-Free S&P iS, MUB
-0.18% Gold Shares S.T., GLD
-0.21% Chile MSCI iS, ECH
-0.22% Bond, TIPS, TIP
-0.22% EAFE Index, EFA
-0.28% Bond, 10 Year Treasury, IEF
-0.30% Thailand MSCI iS, THD
-0.33% Agriculture DB PS, DBA
-0.44% Bond, Aggregate, AGG
-0.51% Value EAFE MSCI, EFV
-0.52% Commodity Tracking, DBC
-0.54% EMU Europe Index, EZU
-0.55% Utilities SPDR, XLU
-0.56% United Kingdom Index, EWU
-0.58% Europe 350 S&P Index, IEV
-0.62% Global 100, IOO
-0.67% Brazil Index, EWZ
-0.67% Consumer Staples SPDR, XLP
-0.68% European VIPERs, VGK
-0.73% Netherlands Index, EWN
-0.75% Germany Index, EWG
-0.85% Japan Index, EWJ
-0.90% Austria Index, EWO
-0.92% Utilities VIPERs, VPU
-0.92% Sweden Index, EWD
-0.94% Metals & Mining SPDR, XME
-0.94% Value LargeCap Dynamic PS, PWV
-1.11% Financial Services DJ, IYG
-1.11% Materials SPDR, XLB
-1.11% Financial SPDR, XLF
-1.13% Switzerland Index, EWL
-1.17% Financial DJ US, IYF
-1.17% Value VIPERs, VTV
-1.20% Semiconductor SPDR, XSD
-1.21% Value S&P 500 B, IVE
-1.25% Bond, 20+ Years Treasury, TLT
-1.27% Semiconductor iS GS, IGW
-1.33% Health Care SPDR, XLV
-1.36% Dividend High Yield Equity PS, PEY
-1.37% Financials VIPERs, VFH
-1.41% Dividend Appreciation Vipers, VIG
-1.41% DIAMONDS (DJIA), DIA
-1.42% Dividend DJ Select, DVY
-1.43% Natural Resource iS GS, IGE
-1.45% Belgium Index, EWK
-1.46% LargeCap Blend S&P 100, OEF
-1.49% S&P 500 SPDRs LargeCap Blend, SPY
-1.49% REIT Wilshire, RWR
-1.52% Basic Materials DJ US, IYM
-1.54% Dividend SPDR, SDY
-1.54% S&P 500 iS LargeCap Blend, IVV
-1.57% Value 1000 Russell, IWD
-1.60% LargeCap Blend S&P=Weight R, RSP
-1.64% Energy DJ, IYE
-1.66% Dividend International, PID
-1.67% Real Estate US DJ, IYR
-1.68% LargeCap Blend Russell 3000, IWV
-1.68% REIT VIPERs, VNQ
-1.69% LargeCap 1000 R, IWB
-1.71% LargeCap VIPERs, VV
-1.76% Oil, Crude, U.S. Oil Fund, USO
-1.83% Consumer Discretionary SPDR, XLY
-1.89% Blend Total Market VIPERs, VTI
-1.90% Energy SPDR, XLE
-1.91% Growth S&P 500/BARRA, IVW
-1.92% Realty Cohen & Steers, ICF
-1.93% Energy VIPERs, VDE
-1.97% Small Cap EAFE MSCI iS, SCZ
-2.00% Growth 1000 Russell, IWF
-2.04% Growth VIPERs, VUG
-2.07% Info Tech VIPERs, VGT
-2.19% Value MidCap Russell, IWS
-2.20% Technology SPDR, XLK
-2.21% Industrial SPDR, XLI
-2.26% Turkey MSCI iS, TUR
-2.30% MidCap Russell, IWR
-2.32% Capital Markets KWB ST, KCE
-2.32% Growth MidCap Russell, IWP
-2.34% Value MidCap S&P 400 B, IJJ
-2.36% Technology DJ US, IYW
-2.40% Transportation Av DJ, IYT
-2.46% Growth BARRA Small Cap 600, IJT
-2.49% Growth LargeCap NASDAQ 100, QQQQ
-2.50% Small Cap VIPERs, VB
-2.53% WilderHill Clean Energy PS, PBW
-2.55% MidCap S&P 400 SPDRs, MDY
-2.57% MidCap S&P 400 iS, IJH
-2.60% SmallCap S&P 600, IJR
-2.62% Telecom DJ US, IYZ
-2.65% Value SmallCap VIPERS, VBR
-2.69% Growth MidCap 400 B, IJK
-2.72% Growth SmallCap VIPERs, VBK
-2.78% Networking, IGN
-2.79% Value SmallCap Russell 2000, IWN
-2.88% SmallCap Russell 2000, IWM
-2.90% Value SmallCap S&P 600 B, IJS
-2.94% Growth SmallCap R 2000, IWO
-3.01% Russia MV, RSX
-3.17% Homebuilders SPDR, XHB
-3.43% Microcap Russell, IWC
-3.47% Water Resources, PHO
-3.88% Indonesia MV, IDX
-4.14% Biotech SPDR, XBI
-5.28% Value SmallCap S&P 600, RZV