NASDAQ Composite/S&P 500 Relative Strength Ratio rose further above its 50-day simple moving average on 6/2/10 and remains bullish. Absolute price of the NASDAQ crossed back above its 200-day simple moving average and closed above the highs of the previous 8 trading days on 6/2/10.

The S&P 500 Equally Weighted ETF absolute price tested its 200-day SMA 6 times over that past 8 trading days and each time closed above it.

S&P 500 price momentum indicators, such as RSI (14) and MACDH, are showing bullish divergence.

S&P 500 Composite (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
1.69% , JKJ , SmallCap Core iS M, JKJ
10.50% , AMGN , AMGEN
2.78% , IWW , Value LargeCap Russell 3000, IWW
1.80% , PIV , Value Line Timeliness MidCap Gr, PIV
3.35% , VGK , European VIPERs, VGK
1.65% , PTE , Telecommunications & Wireless, PTE
5.54% , BBH , Biotech H, BBH
2.96% , HSIC , Henry Schein Inc
2.25% , VIG , Dividend Appreciation Vipers, VIG
2.96% , IXG , Financials Global LargeCap Value, IXG
0.76% , PEY , Dividend High Yield Equity PS, PEY
3.06% , RPV , Value S&P 500, RPV
2.63% , RFV , Value MidCap S&P 400, RFV
6.17% , LRCX , LAM RESEARCH CORP
3.61% , EWQ , France Index, EWQ
3.38% , EWI , Italy Index, EWI
10.48% , BHI , BAKER HUGHES
6.82% , NIHD , NII Holdings, Inc.
4.94% , MVV , Ultra MidCap400 Double, MVV
2.72% , PID , Dividend International, PID
5.35% , PMCS , PMC SIERRA
2.36% , EPU , Peru MSCI iS, EPU
2.87% , PXN , Nanotech Lux, PXN
5.08% , EZA , South Africa Index, EZA
4.54% , CTB , COOPER TIRE
2.47% , VBR , Value SmallCap VIPERS, VBR
2.86% , IJT , Growth BARRA Small Cap 600, IJT
3.86% , BLL , BALL
2.62% , VOX , Telecom Services VIPERs, VOX
4.27% , FAST , Fastenal Company
3.56% , IYM , Basic Materials DJ US, IYM
4.95% , RSX , Russia MV, RSX
2.24% , RPG , Growth S&P 500, RPG
6.49% , LM , LEGG MASON
5.58% , CMI , CUMMINS
2.06% , HHH , Internet H, HHH
1.13% , PZI , Micro Cap Zachs, PZI
2.85% , AET , AETNA
4.39% , LNCR , Lincare Holdings Inc
5.15% , DE , DEERE & CO

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.73% , PSTL , Steel Global PS ETF, PSTL
-0.47% , EMB , Bond EmrgMkt JPM iS, EMB
-5.17% , MZZ , Short 200% MidCap 400 PS, MZZ
-0.99% , SIRI , Sirius Satellite
-3.38% , RIG , TRANSOCEAN
-1.28% , BBY , BEST BUY
-2.16% , KG , KING PHARM
-5.18% , SDS , Short 200% S&P 500 PS, SDS
-2.07% , TLAB , TELLABS
-2.54% , MYY , Short 100% MidCap 400, MYY
-2.55% , PSQ , Short 100% QQQ, PSQ
-0.40% , FDO , FAMILY DLR STRS
-0.73% , DDS , DILLARD STK A
-0.20% , TIN , TEMPLE INLAND
-0.09% , FII , FED INVESTORS STK B
-0.07% , IAU , Gold COMEX iS, IAU
-0.18% , TIF , TIFFANY
-0.15% , GVI , Bond Interm U.S. Gov, GVI
-0.23% , SLV , Silver Trust iS, SLV
-0.09% , BMY , BRISTOL MYERS
-0.07% , SHY , Bond, 1-3 Year Treasury, SHY
-0.95% , TLT , Bond, 20+ Years Treasury, TLT
-0.08% , TNB , THOMAS & BETTS
-0.06% , PMTC.O , PARAMETRIC

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) outperformed since 5/11/10 but still remains neutral. Absolute price of XLK corrected with the broader market, held above its previous 5/6/10 low, and 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.

Materials (XLB) Neutral, Market Weight. The Relative Strength Ratio (XLB/SPY) fell below 10-month lows on 5/20/10 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.

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 lower since 5/20/10 and remains neutral. Absolute price of XLU fell to a 9-month low on 6/1/10. The 50-day crossed below the 200-day simple moving average, and so XLU is now bearish. Support 27.44, 25.76. Resistance 30.59, 30.91, 31.64 and 32.08.

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 further above its 50-day simple moving average on 6/2/10 and remains bullish. Absolute price of the NASDAQ crossed back above its 200-day simple moving average and closed above the highs of the previous 8 trading days on 6/2/10.

Russell 1000 Value ETF Relative Strength Ratio (IWD/SPY) fell below its 50-day simple moving average on 6/1/10 thereby turning neutral again. Absolute price of IWD tested and held above its February low and remains neutral.

Growth Stock/Value Stock Relative Strength Ratio (IWF/IWD) crossed above both its 50- and 200-day simple moving averages on 6/1/10 thereby turning 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 8 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 rising toward its all-time high at 1249.7 set on 5/14/10. The main trend is strongly bullish. Support 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 05/20/10. 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 2.9 and 2.811. Resistance 3.2675, 3.3225, 3.795 and 4.27.

U.S. Treasury Bond nearest futures contract price suffered a minor breakdown on 5/27/10 which might signal a correction phase. Support 119.26, 118.24, 118.12, 115.15, 114.06. 113.04 and 112.15. Resistance 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 39.3% Bulls versus 29.2% Bears as of 5/26/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio fell to 1.35, down from 1.77 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) 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. Support 1056.74, 1040.78, 1029.38, 1019.95, 1012.42, and 1008.55. Resistance 1103.52, 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
1103.52, high of 5/27/2010

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

5.44% Turkey MSCI iS, TUR
5.13% Metals & Mining SPDR, XME
5.08% South Africa Index, EZA
4.95% Russia MV, RSX
4.69% Natural Resource iS GS, IGE
4.67% Sweden Index, EWD
4.40% Energy VIPERs, VDE
4.33% Energy SPDR, XLE
4.23% Biotech SPDR, XBI
4.18% Energy DJ, IYE
4.18% Energy Global, IXC
3.97% Thailand MSCI iS, THD
3.88% India PS, PIN
3.80% India Earnings WTree, EPI
3.73% Netherlands Index, EWN
3.67% Spain Index, EWP
3.63% South Korea Index, EWY
3.61% France Index, EWQ
3.61% Switzerland Index, EWL
3.56% Basic Materials DJ US, IYM
3.54% Emerging VIPERs, VWO
3.49% Emerging Markets, EEM
3.47% EMU Europe Index, EZU
3.38% Italy Index, EWI
3.37% Brazil Index, EWZ
3.35% European VIPERs, VGK
3.33% Canada Index, EWC
3.29% Austria Index, EWO
3.23% Emerging 50 BLDRS, ADRE
3.23% Semiconductor iS GS, IGW
3.19% Semiconductor SPDR, XSD
3.17% Latin Am 40, ILF
3.15% Pacific ex-Japan, EPP
3.13% Financial SPDR, XLF
3.13% Belgium Index, EWK
3.10% Europe 350 S&P Index, IEV
3.09% Materials SPDR, XLB
3.02% Microcap Russell, IWC
2.98% Growth SmallCap VIPERs, VBK
2.98% Growth SmallCap R 2000, IWO
2.98% Australia Index, EWA
2.98% Singapore Index, EWS
2.98% Telecom DJ US, IYZ
2.97% Value SmallCap Russell 2000, IWN
2.96% LargeCap Blend S&P=Weight R, RSP
2.95% Transportation Av DJ, IYT
2.95% MidCap Russell, IWR
2.94% Capital Markets KWB ST, KCE
2.92% Water Resources, PHO
2.91% Global ex US ACWI iS, ACWX
2.87% Growth MidCap Russell, IWP
2.86% Growth BARRA Small Cap 600, IJT
2.85% SmallCap Russell 2000, IWM
2.85% Growth EAFE MSCI, EFG
2.84% Financials VIPERs, VFH
2.83% Value MidCap Russell, IWS
2.82% Financial Services DJ, IYG
2.79% SmallCap S&P 600, IJR
2.78% Financial DJ US, IYF
2.78% Small Cap VIPERs, VB
2.77% MidCap S&P 400 iS, IJH
2.77% Value 1000 Russell, IWD
2.73% China 25 iS, FXI
2.72% Dividend International, PID
2.70% WilderHill Clean Energy PS, PBW
2.68% Growth MidCap 400 B, IJK
2.68% EAFE Index, EFA
2.65% Growth VIPERs, VUG
2.65% Value MidCap S&P 400 B, IJJ
2.63% United Kingdom Index, EWU
2.63% LargeCap Blend Russell 3000, IWV
2.63% LargeCap VIPERs, VV
2.62% S&P 500 iS LargeCap Blend, IVV
2.60% Growth S&P 500/BARRA, IVW
2.60% S&P 500 SPDRs LargeCap Blend, SPY
2.60% Blend Total Market VIPERs, VTI
2.59% Industrial SPDR, XLI
2.58% Value EAFE MSCI, EFV
2.58% LargeCap Blend S&P 100, OEF
2.56% Value VIPERs, VTV
2.55% MidCap S&P 400 SPDRs, MDY
2.54% Small Cap EAFE MSCI iS, SCZ
2.54% Mexico Index, EWW
2.52% Value LargeCap Dynamic PS, PWV
2.52% Value S&P 500 B, IVE
2.52% Networking, IGN
2.51% Consumer Discretionary SPDR, XLY
2.50% LargeCap 1000 R, IWB
2.50% Info Tech VIPERs, VGT
2.47% Value SmallCap VIPERS, VBR
2.47% Dividend DJ Select, DVY
2.46% China LargeCap Growth G D H USX PS, PGJ
2.44% Global 100, IOO
2.42% Value SmallCap S&P 600, RZV
2.40% Technology DJ US, IYW
2.37% Growth LargeCap NASDAQ 100, QQQQ
2.36% Value SmallCap S&P 600 B, IJS
2.28% DIAMONDS (DJIA), DIA
2.28% Dividend SPDR, SDY
2.25% Dividend Appreciation Vipers, VIG
2.25% Growth 1000 Russell, IWF
2.24% Technology SPDR, XLK
2.21% Real Estate US DJ, IYR
2.17% Health Care SPDR, XLV
2.16% Utilities VIPERs, VPU
2.14% REIT Wilshire, RWR
2.11% Indonesia MV, IDX
2.11% Germany Index, EWG
2.10% Utilities SPDR, XLU
2.06% Hong Kong Index, EWH
2.01% Realty Cohen & Steers, ICF
1.96% REIT VIPERs, VNQ
1.84% Oil, Crude, U.S. Oil Fund, USO
1.71% Consumer Staples SPDR, XLP
1.70% Taiwan Index, EWT
1.69% Homebuilders SPDR, XHB
1.49% Chile MSCI iS, ECH
1.36% Pacific VIPERs, VPL
1.25% Financial Preferred, PGF
1.21% Commodity Tracking, DBC
1.17% Malaysia Index, EWM
0.93% Preferred Stock iS, PFF
0.76% Dividend High Yield Equity PS, PEY
0.58% Japan Index, EWJ
0.51% Bond, High-Yield Corporate, HYG
0.35% Bond, Corp, LQD
0.04% Bond Muni ATM-Free S&P iS, MUB
-0.07% Bond, 1-3 Year Treasury, SHY
-0.09% Agriculture DB PS, DBA
-0.10% Bond, Aggregate, AGG
-0.10% Bond, TIPS, TIP
-0.11% Gold Shares S.T., GLD
-0.23% Silver Trust iS, SLV
-0.47% Bond EmrgMkt JPM iS, EMB
-0.57% Bond, 10 Year Treasury, IEF
-0.92% Bond Ex-US Treas, BWX
-0.95% Bond, 20+ Years Treasury, TLT