The S&P 500 Composite (SPX: 1,218.28) fell 35.02 points or 2.79% on Tuesday, November 1, 2011. SPX now has surrendered more than it gained last week.

NYSE volume rose 31% to confirm the stock price downtrend.

SPX fell below a 4-week uptrend line and below the lows of the past 6 trading days on 11/1/11, confirming a short-term downside correction.

Short-term Price Momentum Oscillators, designed to gauge the Daily Fluctuations, collapsed down to their most negative levels in 4 weeks. That is bearish for the short-term outlook.

The stock price recovery from 10/4/11 to 10/27/11 was larger than previous rallies–but it appears to have been a counter-trend correction rather than a change in the major trend.

Note that very high price volatility is typical of bear markets, while bull markets are much less volatile. Markets seem likely to remain volatile, with a continuing heightened sensitivity to news.

Longer-term indicators still are far from confirming any change in the major Primary Tide trend. For example, 50-day SMAs are well below 200-day SMAs for most stocks and indexes.

Ripples and Secondary Reactions opposite to the Dow Theory Primary Tide Trend lure short-term traders into trying to trade a bounce. Price corrections against the larger trends are normal and expected, of course, but playing counter-trend bounces is risky. The mood can switch from “risk on” to “risk off” overnight, leaving the too-clever trader suddenly holding the bag.

The Dow Theory signaled a Primary Tide Bear Market on 8/2/11, when both Dow-Jones Averages, Industrial and Transportation, 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. Both Averages would have to close above their closing price highs for the year to indicate a “Turn in the Tide”.
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Stock Market Indicators

NASDAQ Composite/S&P 500 Relative Strength Ratio has been correcting and consolidating gains since peaking on 9/23/11.

iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below its 50-day SMA on 10/31/11, thereby turning bearish again.

Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell below its 50-day SMA on 10/31/11, thereby turning bearish again.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below its 50-day SMA on 10/31/11, thereby turning bearish again. EFA/SPY fell below the lows of the past 5 weeks on 11/1/11.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below 6-week lows on 10/28/11, confirming a medium-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) remains neutral with the 50-day SMA below the 200-day SMA. Absolute price also remains neutral with the 50-day SMA below the 200-day SMA.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) remains neutral with the 50-day SMA below the 200-day SMA. Absolute price also remains neutral with the 50-day SMA below the 200-day SMA.

Advisory Service Sentiment: There were 40.0% Bulls versus 37.9% Bears as of 10/26/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio rose to 1.06, up from 0.87 the previous week. The Bull/Bear Ratio has been relatively low for 10 consecutive weeks, since 8/24/11. The 20-year median is 1.56 and the mean is 1.64.

VIX Fear Index fell to 24.44 on 10/28/11, down from a high of 48.00 on 8/8/11, suggesting that fear had decreased substantially. 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: 1,218.28) 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
1292.66, high of 10/27/11
1274.05, 200-day SMA
1258.07, low of 6/16/11
1257.58, Fibonacci 61.8% of 2011 range
1256.55, high of 10/24/11
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
1221.06, low of 10/26/2011

S&P 500 Composite (SPX: 1,218.28) Potential Support
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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Fixed-Income Investments

Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) price gapped higher on 11/1/11, opening above the highs of the past 3 weeks. The breakout above Resistance at 116.82 confirmed the bullish trend. TLT added to gains during the regular 9:30 to 4:00 trading session and closed near the highs of the day. The chart suggests a bullish Breakaway Gap, in my interpretation. Support 109.82, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 125.03.

Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) price gapped higher on 11/1/11, opening above the highs of the past 3 weeks. IEF added to gains during the regular 9:30 to 4:00 trading session and closed near the highs of the day. The chart suggests a bullish Breakaway Gap, in my interpretation. Longer term, IEF rose above all-time highs on 9/22/11, reconfirming a major uptrend. Support 101.36, 101.11, 99.79, and 97.66. Resistance 106.66.

Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below 3-week lows and its 50-day SMA on 11/1/11, thereby turning bearish again. Longer term, JNK/LQD broke down below the lows of the previous 29-months on 10/3/11, which reconfirmed a bearish major trend.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF), since making a low on 9/30/11, recovered a normal fraction of previous large losses–but now appears to be losing upside momentum. Longer term, TIP/IEF broke down below the lows of the previous 13-months on 9/30/11, which reconfirmed a bearish major trend. In addition, the 50-day SMA is still far below the 200-day SMA.. This bearish long-term trend means that fixed-income investors have been choosing the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs. So, fixed-income investors may be more worried about deflation than inflation.
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) price gapped higher again on 11/1/11, opening above the highs of the past 7 trading days. UUP added to gains during the regular 9:30 to 4:00 trading session and closed near the highs of the day. The chart shows a bullish Breakaway Gap. The rising 50-day SMA is bullishly above the 200-day SMA. Support 21.07, 20.84. Resistance 21.91 and 22.63.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) fell below the lows of the previous 6 trading days on 10/31/11, suggesting a short-term downtrend. This after falling 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) fell below the lows of the previous 5 trading days on 11/1/11 after losing upside momentum for the short term. Longer term, USO broke down below 2-year lows on 10/4/11 to confirm a major bear market. Support 32.52, 29.10, 26.28, and 22.74. Resistance 36.49, 39.25, 40.74, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) price appears neutral for the medium term. Price is below the 50-day SMA but above the 200-day SMA. Longer term, new highs on 9/6/11 confirmed a major bull market. Support: 154.19, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: 170.32, 172.20, 177.40, and 185.85.

Gold Mining Stocks ETF/ Gold Shares ETF Relative Strength Ratio (GDX/GLD) crossed back below its 50-day SMA on 10/31/11, indicating a bearish trend. The Ratio remains below its 200-day SMA. 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 fell below the lows of the previous 4 trading days on 11/1/11. Longer term, 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 below its 50-day SMA on 9/19/11, fell below its 200-day SMA on 9/22/11, and remains bearishly below both SMAs. Support 27.41, 26.03, and 24.44. Resistance: 34.44, 34.51, 40.23, 41.49, 42.30, 42.78, 44.71 and 48.35.

Silver/Gold ETFs Ratio (SLV/GLD) remains in bearish position, below falling 50-day and 200-day SMAs. Longer term, the SLV/GLD Ratio broke down below the lows of the previous 11 months on 9/30/11, reconfirming a bearish major trend. 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) fell below the lows of the previous 3 trading days on 11/1/11, confirming a short-term downtrend. Longer term, JJC broke down below the lows of the previous 14 months on 10/5/11, confirming a bearish major trend. 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
4.87% , DXD , Short 200% Dow 30 PS, DXD
5.39% , SDS , Short 200% S&P 500 PS, SDS
3.02% , MYY , Short 100% MidCap 400, MYY
0.99% , EWH , Hong Kong Index, EWH
5.18% , QID , Short 200% QQQ PS, QID
2.69% , SH , Short 100% S&P 500, SH
6.45% , MZZ , Short 200% MidCap 400 PS, MZZ
3.08% , TLT , Bond, 20+ Years Treasury, TLT
3.25% , LIZ , LIZ CLAIRBORNE
2.43% , DOG , Short 100% Dow 30, DOG
1.00% , IEF , Bond, 10 Year Treasury, IEF
0.91% , TIP , Bond, TIPS, TIP
0.53% , CIEN.O , CIENA
0.36% , PFE , PFIZER
0.87% , LTD , LIMITED BRANDS
0.32% , KSS , KOHLS
1.08% , CROX , CROCS Inc., CROX
0.64% , DV , DeVry, Inc.
0.31% , SJM , J. M. Smucker
1.22% , NWL , NEWELL RUBBER
1.62% , PWER , POWER ONE
0.64% , AZO , AUTOZONE
0.39% , EMR , EMERSON ELECTRIC
0.09% , HSY , HERSHEY FOODS
0.85% , THC , TENET HEALTHCARE
0.34% , RSH , RADIOSHACK
0.06% , GVI , Bond Interm U.S. Gov, GVI
0.46% , FDO , FAMILY DLR STRS
0.02% , GLD , Gold Shares S.T., GLD
0.03% , TIN , TEMPLE INLAND
0.02% , FE , FIRSTENERGY
2.51% , PSQ , Short 100% QQQ, PSQ

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-4.06% , PSTL , Steel Global PS ETF, PSTL
-5.05% , EWD , Sweden Index, EWD
-5.31% , IYG , Financial Services DJ, IYG
-3.60% , NYC , LargeCap Blend NYSE Composite iS, NYC
-6.24% , MVV , Ultra MidCap400 Double, MVV
-4.72% , RZV , Value SmallCap S&P 600, RZV
-5.13% , ADRU , Europe 100 BLDRS, ADRU
-3.90% , FDV , Value 40 Large Low P/E FT DB, FDV
-5.32% , KCE , Capital Markets KWB ST, KCE
-2.23% , PST , 200% Short Bond 7-10 Yr T, PST
-7.36% , DYN , DYNEGY
-9.09% , AMD , ADV MICRO DEV
-4.24% , IEV , Europe 350 S&P Index, IEV
-5.38% , BDH , Broadband H, BDH
-8.00% , SNV , SYNOVUS
-2.66% , IXN , Technology Global, IXN
-3.91% , TGT , TARGET
-6.99% , PDCO , Patterson Dental Company
-3.98% , PBW , WilderHill Clean Energy PS, PBW
-7.22% , RDC , ROWAN COMPANIES
-3.10% , RSP , LargeCap Blend S&P=Weight R, RSP
-3.84% , XHB , Homebuilders SPDR, XHB
-5.19% , EWP , Spain Index, EWP
-5.14% , F , FORD MOTOR
-3.54% , IJS , Value SmallCap S&P 600 B, IJS
-6.96% , EWI , Italy Index, EWI
-3.62% , EWK , Belgium Index, EWK
-6.58% , FHN , First Horizon National
-2.29% , TTH , Telecom H, TTH
-2.32% , MTK , Technology MS sT, MTK
-2.27% , IYK , Consumer Non-Cyclical, IYK
-3.02% , PUI , Utilities, PUI
-2.66% , IVV , S&P 500 iS LargeCap Blend, IVV
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
3.08% Bond, 20+ Years Treasury, TLT
1.00% Bond, 10 Year Treasury, IEF
0.99% Hong Kong Index, EWH
0.91% Bond, TIPS, TIP
0.35% Bond Muni ATM-Free S&P iS, MUB
0.22% Bond, Aggregate, AGG
0.15% Bond, Corp, LQD
0.03% Agriculture DB PS, DBA
0.02% Gold Shares S.T., GLD
-0.02% Bond Treasury Short-Term iS, SHV
-0.05% Bond, 1-3 Year Treasury, SHY
-0.43% Bond EmrgMkt JPM iS, EMB
-0.50% Taiwan Index, EWT
-1.19% Commodity Tracking, DBC
-1.23% Bond Ex-US Treas, BWX
-1.28% Japan Index, EWJ
-1.51% Oil, Crude, U.S. Oil Fund, USO
-1.53% China 25 iS, FXI
-1.53% Financial Preferred, PGF
-1.57% Pacific VIPERs, VPL
-1.57% South Korea Index, EWY
-1.66% Frontier Markets Guggenheim , FRN
-1.67% Oil Fund PowerShares, DBO
-1.74% Consumer Staples SPDR, XLP
-1.91% Health Care SPDR, XLV
-2.09% Utilities SPDR, XLU
-2.11% Utilities VIPERs, VPU
-2.12% India PS, PIN
-2.14% Preferred Stock iS, PFF
-2.15% Consumer Discretionary SPDR, XLY
-2.22% Emerging VIPERs, VWO
-2.22% Telecom DJ US, IYZ
-2.30% India Earnings WTree, EPI
-2.34% Bond, High-Yield Junk, JNK
-2.36% Bond, High-Yield Corporate, HYG
-2.39% Growth 1000 Russell, IWF
-2.40% Emerging 50 BLDRS, ADRE
-2.44% Emerging Markets, EEM
-2.48% DIAMONDS (DJIA), DIA
-2.48% Growth S&P 500/BARRA, IVW
-2.49% Value LargeCap Dynamic PS, PWV
-2.49% Dividend Appreciation Vipers, VIG
-2.50% Dividend International, PID
-2.52% United Kingdom Index, EWU
-2.53% Growth VIPERs, VUG
-2.53% Dividend DJ Select, DVY
-2.56% Transportation Av DJ, IYT
-2.56% Thailand MSCI iS, THD
-2.60% Pacific ex-Japan, EPP
-2.61% QQQ Nasdaq 100 Trust, QQQ
-2.64% LargeCap Blend S&P 100, OEF
-2.65% LargeCap 1000 R, IWB
-2.66% S&P 500 iS LargeCap Blend, IVV
-2.66% Blend Total Market VIPERs, VTI
-2.67% Materials SPDR, XLB
-2.67% Dividend SPDR, SDY
-2.70% Growth MidCap Russell, IWP
-2.72% Growth EAFE MSCI, EFG
-2.77% Technology SPDR, XLK
-2.77% LargeCap VIPERs, VV
-2.79% S&P 500 SPDRs LargeCap Blend, SPY
-2.79% LargeCap Blend Russell 3000, IWV
-2.82% South Africa Index, EZA
-2.89% Info Tech VIPERs, VGT
-2.90% Brazil Index, EWZ
-2.90% MidCap Russell, IWR
-2.90% Technology DJ US, IYW
-2.93% Value VIPERs, VTV
-2.95% Latin Am 40, ILF
-2.98% Metals & Mining SPDR, XME
-2.98% Growth SmallCap VIPERs, VBK
-3.00% Basic Materials DJ US, IYM
-3.00% China LargeCap Growth G D H USX PS, PGJ
-3.01% Growth BARRA Small Cap 600, IJT
-3.02% Value S&P 500 B, IVE
-3.02% Industrial SPDR, XLI
-3.03% Malaysia Index, EWM
-3.03% Dividend High Yield Equity PS, PEY
-3.05% Energy DJ, IYE
-3.05% Silver Miners Global X, SIL
-3.10% Water Resources, PHO
-3.10% LargeCap Blend S&P=Weight R, RSP
-3.12% Energy & Nat Res iS GS, IGE
-3.13% EAFE Index, EFA
-3.14% MidCap S&P 400 iS, IJH
-3.14% Value 1000 Russell, IWD
-3.15% MidCap S&P 400 SPDRs, MDY
-3.18% Value MidCap Russell, IWS
-3.18% Chile MSCI iS, ECH
-3.19% Semiconductor iS IGW, SOXX
-3.19% Growth MidCap 400 B, IJK
-3.20% SmallCap S&P 600, IJR
-3.20% Turkey MSCI iS, TUR
-3.22% REIT VIPERs, VNQ
-3.23% Energy SPDR, XLE
-3.26% Canada Index, EWC
-3.28% Small Cap VIPERs, VB
-3.29% Energy VIPERs, VDE
-3.29% Value MidCap S&P 400 B, IJJ
-3.30% Small Cap EAFE MSCI iS, SCZ
-3.32% Silver Trust iS, SLV
-3.32% Growth SmallCap R 2000, IWO
-3.35% Mexico Index, EWW
-3.35% Global 100, IOO
-3.37% Real Estate US DJ, IYR
-3.39% Global ex US ACWI iS, ACWX
-3.40% Energy Global, IXC
-3.40% Switzerland Index, EWL
-3.45% Networking, IGN
-3.49% Value SmallCap VIPERS, VBR
-3.52% REIT Wilshire, RWR
-3.52% Indonesia MV, IDX
-3.54% Biotech SPDR, XBI
-3.54% SmallCap Russell 2000, IWM
-3.54% Value SmallCap S&P 600 B, IJS
-3.62% Belgium Index, EWK
-3.63% Value SmallCap Russell 2000, IWN
-3.63% Realty Cohen & Steers, ICF
-3.67% Singapore Index, EWS
-3.71% Australia Index, EWA
-3.78% Microcap Russell, IWC
-3.84% Homebuilders SPDR, XHB
-3.86% Semiconductor SPDR, XSD
-3.89% Value EAFE MSCI, EFV
-3.98% WilderHill Clean Energy PS, PBW
-4.16% European VIPERs, VGK
-4.24% Europe 350 S&P Index, IEV
-4.30% Russia MV, RSX
-4.37% Financial DJ US, IYF
-4.44% Financials VIPERs, VFH
-4.61% Netherlands Index, EWN
-4.71% Financial SPDR, XLF
-5.05% Sweden Index, EWD
-5.19% Spain Index, EWP
-5.26% EMU Europe Index, EZU
-5.28% Germany Index, EWG
-5.31% Financial Services DJ, IYG
-5.32% Capital Markets KWB ST, KCE
-5.51% Austria Index, EWO
-5.67% France Index, EWQ
-6.96% Italy Index, EWI