Based on the S&P 500 ETF (SPY), MACD Histogram turned positive on 6/3/10.

NYSE McClellan Oscillator turned positive.

Technology Stock Sector Relative Strength Ratio (XLK/SPY) rose above 4-month highs on 6/3/10, while absolute price of XLK rose above its 200-day SMA.

Materials Stock Sector Relative Strength Ratio (XLB/SPY) fell below 14-month lows on 6/3/10 and remains bearish.

U.S. Treasury Bond futures contract price fell below 10-day lows on 6/3/10, which confirms a short-term correction phase.

S&P 500 Composite (SPX) rose above the highs of the previous 8 trading days on 6/3/10. SPX has tested recent lows and held them. SPX turned up from a deeply oversold position and previous support, suggesting that bargain-hunting demand appeared where it should have, technically speaking.

Clearly, excessive bullish sentiment has been wrung out of the stock market. This is a major change from last month. On 4/26/10, I wrote: “Investors Intelligence survey of stock market newsletter advisors, Call/Put Volume Ratios, and implied option volatility have shown bullish complacency in recent weeks. Excessive bullish sentiment sometimes precedes a shakeout to the downside.” We got that shakeout, and now it appears to be over.
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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
4.55% , IIH , Internet Infrastructure H, IIH
1.32% , PWP , Value MidCap Dynamic PS, PWP
1.76% , PXE , Energy Exploration & Prod, PXE
7.30% , HP , Helmerich & Payne HP
1.39% , FPX , IPOs, First Tr IPOX-100, FPX
4.82% , BC , BRUNSWICK
1.51% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
1.02% , DGT , Global Titans, DGT
4.90% , DELL , DELL
4.38% , EBAY , EBAY
1.04% , RZV , Value SmallCap S&P 600, RZV
1.20% , IGW , Semiconductor iS GS, IGW
3.36% , RYAAY , Ryanair Holdings plc
4.10% , AN , AUTONATION
3.74% , HOLX , Hologic, Inc., HOLX
1.25% , PSI , Semiconductors, PSI
3.62% , VRSN , VeriSign Inc
4.57% , LIZ , LIZ CLAIRBORNE
1.11% , JKH , MidCap Growth iS M, JKH
1.06% , PWJ , Growth Mid Cap Dynamic PS, PWJ
3.29% , ROST , Ross Stores Inc
3.97% , WLP , WELLPOINT HEALTH
0.86% , PJP , Pharmaceuticals, PJP
1.58% , IXC , Energy Global, IXC
2.73% , PCAR , PACCAR
2.01% , DISH , EchoStar Communications
0.58% , ADRA , Asia 50 BLDRS, ADRA
2.45% , CTSH , Cognizant Technology Solutions
1.11% , XSD , Semiconductor SPDR, XSD
1.14% , VXF , Extended Mkt VIPERs, VXF
1.52% , SCHW.K , CHARLES SCHWAB, SCHW.O
1.09% , PZI , Micro Cap Zachs, PZI
2.69% , ALTR , ALTERA
0.60% , FDL , Dividend Leaders, FDL
3.77% , SUN , SUNOCO
3.94% , NBR , NABORS
1.26% , IAH , Internet Architecture H, IAH
1.39% , USO , Oil, Crude, U.S. Oil Fund, USO
1.17% , ELG , Growth Large Cap, ELG
3.56% , LRCX , LAM RESEARCH CORP

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.17% , EWK , Belgium Index, EWK
-3.61% , RDC , ROWAN COMPANIES
-4.30% , JWN , NORDSTROM
-0.77% , FEZ , Euro STOXX 50, FEZ
-4.13% , FCX , FREEPRT MCMORAN STK B
-2.05% , BEN , FRANKLIN RSC
-4.00% , PHM , PULTE HOMES
-1.73% , COST , COSTCO WHOLESAL
-3.57% , FDO , FAMILY DLR STRS
-1.41% , GPC , GENUINE PARTS
-0.14% , EWU , United Kingdom Index, EWU
-0.39% , TLH , Bond 10-20 Year US Treas, TLH
-2.04% , PX , PRAXAIR
-1.00% , RKH , Bank Regional H, RKH
-3.18% , EZA , South Africa Index, EZA
-0.59% , EZU , EMU Europe Index, EZU
-0.76% , PSQ , Short 100% QQQ, PSQ
-0.62% , VAW , Materials VIPERs, VAW
-2.89% , DHI , D.R. HORTON, DHI
-0.90% , CSX , CSX
-1.34% , HAS , HASBRO
-1.21% , XLB , Materials SPDR, XLB
-1.04% , TUP , TUPPERWARE
-1.42% , KSU , Kansas City Southern, KSU
-1.52% , GLD , Gold Shares S.T., GLD
-1.43% , WAG , WALGREEN
-0.19% , EWC , Canada Index, EWC
-0.73% , TLT , Bond, 20+ Years Treasury, TLT
-2.59% , PNC , PNC FINL SVC
-1.46% , NE , NOBLE
-0.32% , LQD , Bond, Corp, LQD
-0.24% , EWJ , Japan Index, EWJ
-1.29% , IYM , Basic Materials DJ US, IYM
-0.38% , Q , QWEST COMMUNICAT
-0.17% , RTH , Retail H, RTH
-0.79% , MYY , Short 100% MidCap 400, MYY
-2.08% , CLF , CLIFFS NATURAL RESOURCES, CLF
-2.20% , LPX , LOUISIANA PAC
-1.15% , MBI , MBIA
-1.22% , X , US STEEL CORP

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 5/27/10 and remains bullish. Absolute price of XLY rose above 6-day highs. XLY rose further above its 200-day SMA and February low and remains neutral. Support 30.34. Resistance 34.39, 36.13, 38.25 and 39.09.

Industrial (XLI) Bullish, Overweight. The Relative Strength Ratio (XLI/SPY) fell below its 50-day SMA on 6/1/10 and so is now neutral, according to the 50/200 trend-following moving average system. Absolute price of XLI remains neutral. Support 27.91. Resistance 32.41, 33.46, 34.24, 34.50, and 35.00.

Technology (XLK) Neutral, Market Weight. The Relative Strength Ratio (XLK/SPY) rose above 4-month highs on 6/3/10 but still remains neutral. Absolute price of XLK rose above its 200-day SMA on 6/3/10 but still remains neutral. Support 20.64. Resistance 23.27, 24.16, 24.68, and 25.69.

Consumer Staples (XLP) Neutral, Market Weight. The Relative Strength Ratio (XLP/SPY) has performed about in-line with the broader market for the past 8-months and remains neutral. Absolute price of XLP also remains neutral. Support 25.78 and 24.95. Resistance 27.83, 27.95, 28.20, 28.75, 29.29 and 30.29.

Financial (XLF) Neutral, Market Weight. The Relative Strength Ratio (XLF/SPY) has moderately underperformed the broader market for the past 7-months and remains neutral. Absolute price of XLF remains neutral. Support 13.84 and 13.51. Resistance 15.67, 16.13, 16.90, 17.12, 17.16, and 17.87.

Health Care (XLV) Neutral, Market Weight. The Relative Strength Ratio (XLV/SPY) underperformed significantly over the past 4 months and remains bearish. Absolute price of XLV fell below 6-month lows on 5/25/10 and remains neutral. Support 27.96. Resistance 30.83, 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) turned moderately lower since 5/20/10 and remains neutral. Absolute price of XLU remains bearish, with price below SMAs and the 50 below the 200 SMA. Support 27.44, 25.76. Resistance 30.59, 30.91, 31.64 and 32.08.

Materials (XLB) Neutral, Market Weight. The Relative Strength Ratio (XLB/SPY) fell below 14-month lows on 6/3/10 and remains bearish. Absolute price of XLB crossed below the 200-day SMA on 5/14/10 and remains neutral. Support 28.87. Resistance 33.06, 35.47, and 37.56.

Energy (XLE) Neutral, Market Weight. The Relative Strength Ratio (XLE/SPY) fell below 2-year lows on 6/1/10 and remains bearish. Absolute price of XLE fell below its 8-month lows on 5/25/10 and remains neutral. Support 50.15 Resistance 58.11, 59.84, 62.30, 62.73, 69.95, and 78.10.
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell to a 12-month low on 5/20/10. EEM/SPY trend turned bearish on 4/16/10, according to strict moving average analysis. Absolute price of EEM fell to an 8-month low on 5/25/10.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below 5-year lows on 5/26/10 and remains bearish. Absolute price of EFA fell below 10-month lows on 5/25/10 and remains bearish.

NASDAQ Composite/S&P 500 Relative Strength Ratio rose above 9-year highs on 6/3/10 and remains bullish. Absolute price of the NASDAQ rose further above its rising 200-day simple moving average on 6/3/10.

Russell 1000 Value ETF Relative Strength Ratio (IWD/SPY) remains neutral. Absolute price of IWD tested and held above its February low and remains neutral.

Growth Stock/Value Stock Relative Strength Ratio (IWF/IWD) remains neutral. Absolute price of IWF remains neutral.

The S&P 500 Equally Weighted ETF Relative Strength Ratio (RSP/SPY) rose to challenge its highs on 5/27/10 and remains bullish. Absolute price of RSP tested its 200-day SMA 6 times over that past 9 trading days and each time closed above it.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below the lows of the previous 22 months on 5/27/10 and remains bearish. Absolute price of OEX remains neutral.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) remains bullish. Absolute price of IWM tested its 200-day SMA on 5/25/10 and closed above it.

The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose to a new 15-year high on 5/28/10 and remains bullish. Absolute price of MDY tested its 200-day SMA on 5/25/10 and closed above it.

Crude Oil nearest futures contract price has been consolidating losses since hitting a low of 67.15 on 5/25/10. Technical trends appear uncertain. Support 67.15 and 65.05. Resistance 77.74, 78.81, 81.29, 87.15, 90.51, 98.65, and 102.84.

Gold nearest futures contract price has been consolidating since setting its all-time high at 1249.7 on 5/14/10. The main trend remains bullish. Support 1168.0, 1156.2, 1124.3, 1084.8, 1045.2, 1026.9 and 989.3. Resistance: 1249.7.

Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) firmed up since making a low on 5/20/10 and is neutral.

Silver/Gold Ratio turned bearish on 5/17/10 when it crossed below both 50- and 200-day SMAs, with the 50-day SMA below the 200-day SMA.

Copper nearest futures price has been consolidating losses since hitting a low of 2.9005 on 5/20/10. Copper’s trends reflect current uncertainties about the shape of global economies ahead. Strength in Copper suggests renewed hope about prospects for the world economy, while weakness suggests doubts. Support 2.9005 and 2.811. Resistance 3.187, 3.2675, 3.3225, 3.795 and 4.27.

U.S. Treasury Bond nearest futures contract price fell below 10-day lows on 6/3/10, which confirms a short-term correction phase. Support 119.26, 118.24, 118.12, 115.15, 114.06. 113.04, and 112.15. Resistance 126.15 and 130.31.

Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) has been moving with the stock market and remains neutral.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell below 6-month lows on 5/20/10 but still remains neutral for the intermediate-term trend. This implies that investors are choosing somewhat less inflation protection. Absolute price of TIP remains bullish.

The U.S. dollar nearest futures contract price appears to be consolidating gains in strong fashion since hitting a high of 87.625 on 05/19/10. USD main trend remains bullish. Support 85.325, 83.07, 81.74, 80.14, 79.73, 79.61, 78.83, 78.20, 76.74 and 75.90. Resistance 87.625, 89.71 and 92.53.

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 39.8% Bulls versus 28.4% Bears as of 6/2/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio fell to 1.40, up from 1.35 the previous week. The current Bull/Bear ratio has 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 1.51, and the mean is 1.57.

VIX Fear Index rose to a 14-month high of 48.20 on 5/21/10. 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 14-month high of 48.89 on 5/21/10. 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 .059 on 5/7/10, a low level that indicates bearish sentiment. 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 0.96 on 5/20/10, its highest level of the year. A high level indicates 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) rose above the highs of the previous 8 trading days on 6/3/10. SPX tested recent lows and held them. SPX turned up from a deeply oversold position and previous support, suggesting that bargain-hunting demand appeared where it should have, technically speaking. Support 1056.74, 1040.78, 1029.38, 1019.95, 1012.42, and 1008.55. Resistance 1109.17, 1130.29, 1151.41, 1173.57, 1181.49, 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
1181.49, Fibonacci 78.6% of 2010 range
1173.57, high of 5/13/2010
1151.41, Fibonacci 61.8% of 2010 range
1130.29, Gann 50.0% of 2010 range
1109.17, Fibonacci 38.2% of 2010 range

S&P 500 Cash Index Potential Support
1056.74, close of 2/8/2010
1040.78, low of 5/25/2010
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

1.60% WilderHill Clean Energy PS, PBW
1.58% Energy Global, IXC
1.57% Growth SmallCap VIPERs, VBK
1.43% Energy VIPERs, VDE
1.42% Growth BARRA Small Cap 600, IJT
1.39% Oil, Crude, U.S. Oil Fund, USO
1.35% Energy SPDR, XLE
1.34% Networking, IGN
1.34% SmallCap S&P 600, IJR
1.29% SmallCap Russell 2000, IWM
1.28% Value SmallCap S&P 600 B, IJS
1.27% Growth SmallCap R 2000, IWO
1.27% Indonesia MV, IDX
1.26% Dividend High Yield Equity PS, PEY
1.25% Energy DJ, IYE
1.25% Info Tech VIPERs, VGT
1.20% Technology DJ US, IYW
1.20% Semiconductor iS GS, IGW
1.17% Water Resources, PHO
1.15% Small Cap VIPERs, VB
1.13% Utilities VIPERs, VPU
1.11% Semiconductor SPDR, XSD
1.10% Microcap Russell, IWC
1.05% Utilities SPDR, XLU
1.04% Value SmallCap S&P 600, RZV
1.00% Technology SPDR, XLK
0.99% Biotech SPDR, XBI
0.96% Growth MidCap Russell, IWP
0.95% Growth LargeCap NASDAQ 100, QQQQ
0.95% Value SmallCap Russell 2000, IWN
0.92% Growth MidCap 400 B, IJK
0.91% South Korea Index, EWY
0.84% Value SmallCap VIPERS, VBR
0.84% Bond EmrgMkt JPM iS, EMB
0.81% Singapore Index, EWS
0.74% MidCap S&P 400 SPDRs, MDY
0.73% India Earnings WTree, EPI
0.67% Growth VIPERs, VUG
0.67% Value MidCap Russell, IWS
0.66% MidCap Russell, IWR
0.64% MidCap S&P 400 iS, IJH
0.64% Value MidCap S&P 400 B, IJJ
0.61% India PS, PIN
0.61% Dividend International, PID
0.60% Growth S&P 500/BARRA, IVW
0.59% Growth 1000 Russell, IWF
0.59% LargeCap Blend S&P=Weight R, RSP
0.58% Health Care SPDR, XLV
0.58% Natural Resource iS GS, IGE
0.55% Commodity Tracking, DBC
0.53% Blend Total Market VIPERs, VTI
0.53% Dividend SPDR, SDY
0.49% LargeCap Blend Russell 3000, IWV
0.48% LargeCap 1000 R, IWB
0.46% Industrial SPDR, XLI
0.44% LargeCap VIPERs, VV
0.43% Dividend DJ Select, DVY
0.39% Thailand MSCI iS, THD
0.36% Malaysia Index, EWM
0.35% Taiwan Index, EWT
0.34% S&P 500 SPDRs LargeCap Blend, SPY
0.34% S&P 500 iS LargeCap Blend, IVV
0.34% Consumer Discretionary SPDR, XLY
0.33% Small Cap EAFE MSCI iS, SCZ
0.32% Transportation Av DJ, IYT
0.31% Financial Preferred, PGF
0.30% Australia Index, EWA
0.30% Global 100, IOO
0.29% Value LargeCap Dynamic PS, PWV
0.25% Value VIPERs, VTV
0.24% Homebuilders SPDR, XHB
0.22% Value 1000 Russell, IWD
0.19% Dividend Appreciation Vipers, VIG
0.19% Pacific ex-Japan, EPP
0.19% Value S&P 500 B, IVE
0.18% LargeCap Blend S&P 100, OEF
0.17% Capital Markets KWB ST, KCE
0.15% Telecom DJ US, IYZ
0.15% Consumer Staples SPDR, XLP
0.14% Preferred Stock iS, PFF
0.09% China LargeCap Growth G D H USX PS, PGJ
0.08% DIAMONDS (DJIA), DIA
0.07% Hong Kong Index, EWH
0.05% Switzerland Index, EWL
0.05% Bond, TIPS, TIP
0.04% Agriculture DB PS, DBA
0.04% Bond, High-Yield Corporate, HYG
-0.02% Bond Muni ATM-Free S&P iS, MUB
-0.02% Bond, 1-3 Year Treasury, SHY
-0.05% Bond, Aggregate, AGG
-0.05% Germany Index, EWG
-0.07% Emerging 50 BLDRS, ADRE
-0.10% Pacific VIPERs, VPL
-0.14% United Kingdom Index, EWU
-0.14% Bond, 10 Year Treasury, IEF
-0.17% Belgium Index, EWK
-0.19% Canada Index, EWC
-0.20% Chile MSCI iS, ECH
-0.20% REIT Wilshire, RWR
-0.21% Europe 350 S&P Index, IEV
-0.24% Japan Index, EWJ
-0.24% Growth EAFE MSCI, EFG
-0.24% Sweden Index, EWD
-0.26% Real Estate US DJ, IYR
-0.28% Netherlands Index, EWN
-0.28% REIT VIPERs, VNQ
-0.29% France Index, EWQ
-0.30% Mexico Index, EWW
-0.31% EAFE Index, EFA
-0.32% Bond, Corp, LQD
-0.33% Financials VIPERs, VFH
-0.34% Russia MV, RSX
-0.35% Italy Index, EWI
-0.36% Financial DJ US, IYF
-0.36% Realty Cohen & Steers, ICF
-0.36% Emerging Markets, EEM
-0.40% Financial Services DJ, IYG
-0.41% Emerging VIPERs, VWO
-0.48% European VIPERs, VGK
-0.48% Global ex US ACWI iS, ACWX
-0.55% Financial SPDR, XLF
-0.56% China 25 iS, FXI
-0.56% Value EAFE MSCI, EFV
-0.56% Bond Ex-US Treas, BWX
-0.59% EMU Europe Index, EZU
-0.73% Bond, 20+ Years Treasury, TLT
-0.84% Latin Am 40, ILF
-0.90% Austria Index, EWO
-0.97% Brazil Index, EWZ
-1.03% Turkey MSCI iS, TUR
-1.21% Materials SPDR, XLB
-1.29% Basic Materials DJ US, IYM
-1.37% Metals & Mining SPDR, XME
-1.52% Gold Shares S.T., GLD
-1.88% Silver Trust iS, SLV
-2.30% Spain Index, EWP
-3.18% South Africa Index, EZA