The stock market lost upside momentum this week. It is overbought short-term.

S&P 500 Composite (SPX, 1,339.22) rose 1.34 points or 0.10% on Wednesday 7/6/11. SPX shows substantial chart Resistance in a 3% band from 1331 to 1371. Support 1249 to 1279.

Trading volume on the NYSE fell 2% below the previous day’s pace and still was 19% below the 200-day SMA. Low and falling volume raises doubts about the significance of any rally attempt.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) broke down below 6-week lows on 7/6/11.
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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
12.73% , MTG , MGIC INVESTMENT
5.63% , URBN , Urban Outfitters Inc.
0.33% , BDH , Broadband H, BDH
0.62% , IJK , Growth MidCap 400 B, IJK
2.57% , GPC , GENUINE PARTS
5.52% , CPWR , COMPUWARE
0.41% , IWZ , Growth LargeCap Russell 3000, IWZ
0.41% , IWF , Growth 1000 Russell, IWF
2.23% , S , SPRINT NEXTEL
1.92% , ABC , AMERISOURCEBERGN
1.93% , CTB , COOPER TIRE
0.46% , IGM , Technology GS, IGM
2.88% , GT , GOODYEAR TIRE
1.55% , QLGC , QLOGIC
0.57% , ITF , Japan LargeCap Blend TOPIX 150, ITF
0.22% , PSTL , Steel Global PS ETF, PSTL
0.39% , JKG , MidCap Blend Core iS M, JKG
1.81% , AMP , Ameriprise Financial Inc.
0.81% , LNCR , Lincare Holdings Inc
0.86% , XL , XL CAPITAL STK A
1.38% , DD , DU PONT
1.15% , TNB , THOMAS & BETTS
1.37% , CECO , CAREER EDUCATION CORP
0.36% , PEY , Dividend High Yield Equity PS, PEY
2.16% , KSU , Kansas City Southern, KSU
1.62% , FDO , FAMILY DLR STRS
0.34% , PWO , OTC Dynamic PS, PWO
1.52% , WAG , WALGREEN
1.11% , PPG , PPG INDUSTRIES
1.91% , JBL , JABIL CIRCUIT
1.11% , IYT , Transportation Av DJ, IYT
1.47% , IGT , INTL GAME TECH
0.72% , IGV , Software, IGV

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-0.17% , PZI , Micro Cap Zachs, PZI
-0.68% , MYY , Short 100% MidCap 400, MYY
-3.17% , RIG , TRANSOCEAN
-3.95% , SCHW.K , CHARLES SCHWAB, SCHW.O
-3.40% , LIZ , LIZ CLAIRBORNE
-0.62% , DGT , Global Titans, DGT
-3.40% , NE , NOBLE
-3.46% , X , US STEEL CORP
-2.92% , LRCX , LAM RESEARCH CORP
-2.43% , RF , REGIONS FINAN
-3.75% , EK , EASTMAN KODAK
-0.42% , XSD , Semiconductor SPDR, XSD
-0.34% , IGN , Networking, IGN
-0.68% , ADRU , Europe 100 BLDRS, ADRU
-3.25% , EWI , Italy Index, EWI
-1.43% , PTEN , Patterson-UTI Energy Inc
-0.17% , NY , Value LargeCap NYSE 100 iS, NY
-1.22% , FLEX , Flextronics International Ltd
-0.88% , PSI , Semiconductors, PSI
-0.35% , PSQ , Short 100% QQQ, PSQ
-0.94% , LOW , LOWES
-2.36% , BAC , BANK OF AMERICA
-2.57% , LBTYA , Liberty Global Inc. (LBTYA)
-1.29% , EWK , Belgium Index, EWK
-0.45% , MDP , MEREDITH
-2.06% , ZEUS , Olympic Steel, ZEUS
-1.85% , CMCSA , COMCAST HOLDINGS STK A
-0.80% , SOXX , Semiconductor iS IGW, SOXX
-4.15% , RIMM , RESEARCH IN MOTION LTD
-0.11% , EFG , Growth EAFE MSCI, EFG
-3.68% , ATI , ALLEGHENY TECH
-0.74% , NVLS , NOVELLUS SYS
-1.28% , FXI , China 25 iS, FXI
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9 Major U.S. Stock Sectors
ranked in order of long-term relative strength
Now available by subscription at a 33% discount.
The Colby Global Markets Report (click here)
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) has been trading with a bearish bias since peaking on 10/14/10. The Ratio remains below the 200-day SMA, below the 50-day SMA, and the 50-day SMA remains below the 200-day SMA. Absolute price broke down below 14-week lows on 6/23/11.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) broke down below 6-week lows on 7/6/11. The Ratio has been trading with a bearish bias since peaking on 11/27/07. The Ratio remains below the 200-day SMA, below the 50-day SMA, and the 50-day SMA remains below the 200-day SMA. Absolute price broke down below 14-week lows on 6/23/11.

NASDAQ Composite/S&P 500 Relative Strength Ratio entered a correction since peaking on 1/18/11. The Ratio fell below 8-month lows on 6/20/11.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell further below 28-year lows on 5/26/11, again reconfirming its preexisting bearish major trend.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) broke down further below 4-month lows on 6/13/11 and has been in a downside correction since 4/5/11.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose above 13-week highs on 7/6/11. Price, however, remains stuck in a neutral trading range.

Crude Oil nearest futures contract price broke out above a 2-month downtrend line on 7/5/11, overcoming resistance. And this just after Oil broke down below the lows of the past 4 months on 6/27/11, reconfirming a significant downtrend. Unpredictable reversals like this make Oil a risky market to trade at this time. At this moment, the bulls have regained the momentum advantage–but who knows for how long? Support 93.45, 87.09, 83.85, 83.55, 80.28, 80.06, 79.84, 79.25, 78.86, 73.52, 72.63, 70.76, 70.35, 69.51, 68.59, 67.15, 65.05, and 64.24. Resistance 103.39, 104.60, 105.16, 114.83, 115.27, 120.42, 130.0, and 147.27.

Gold nearest futures contract price rose above the highs of the previous 7 days on 7/6/11, suggesting a minor rally attempt. But Gold broke down below the lows of the past 6 weeks on 7/1/11, reconfirming a preexisting short-term downtrend. On 6/9/11, when Gold was 1542.7, I noted that Gold “appears to have stalled out since 6/6/11. Gold’s 5-week countertrend bounce might be weakening. Reward/Risk does not appear attractive. It seems possible that Gold has finally topped out at 1577.4 after rising 132% from 681 in October, 2008.” Support: 1478.3, 1462.5, 1445.0, 1411.5, 1380.7, 1419.5, 1351.4, 1309.1, 1307.7, 1297.0, 1274.8, 1270.5, 1232.4, 1210.9, 1191.5, and 1155.6. Resistance: 1514.8, 1559.3 and 1577.4.

Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) fell further below 27-month lows on 6/17/11. The Ratio has been falling steeply since 4/8/11 and remains bearish. GDX is offering a bearish divergence relative to GLD, and that might be taken as a warning about prospects for GLD, Gold futures, bullion, and coins.

Silver nearest futures contract price rose above the highs of the previous 7 days on 7/6/11, suggesting a minor rally attempt. But Silver broke down below the lows of the past 5 weeks on 6/27/11, confirming a short-term downtrend. Silver fell 35% from 49.82 on 4/25/11 to 32.3 on 5/12/11, breaking down below 10-week lows. On 5/2/11, when Silver was 46.084, I wrote, “Silver nearest futures contract price broke sharply below the lows of the previous 2 weeks. The short-term price trend has turned down. If this downtrend continues, it could have implications for inflation expectations.” Support 33.38, 32.3, 31.695, 31.61, 30.265, 29.635, 26.30, 24.98, and 22.84. Resistance: 36.77, 37.86, 38.845, 39.38, 39.47, 49.82, 49.845 and 50.35.

Silver/Gold Ratio fell below the lows of the previous 4 months in 6/27/11, reconfirming a preexisting downtrend for the medium term. The Ratio entered a steep downtrend since the peak on 4/28/11 and remains bearish.

Copper nearest futures contract price hesitated on 7/6/11, a day after rising above 2-month highs on 7/5/11, and thereby reconfirming a short-term bounce. Longer term, Copper broke down below previous 5-month lows on 5/12/11. Weakness in Copper suggests doubts about the economic outlook, while strength suggests confidence in the future. Support 4.0505, 4.0240, 3.9505, 3.8725, 3.8535, 3.846, 3.6065, 3.3930, 3.1775, 2.9285, 2.8555, 2.8445, and 2.72. Resistance: 4.402, 4.533, 4.554, 4.6495, 4.6535, and 4.6575.

U.S. Treasury Bond nearest futures contract price rose above the highs of the previous 3 trading days on 7/6/11, confirming a minor upside reversal. On 7/5/11, the Bond penetrated above a 5-day downtrend line, suggesting an oversold bounce. Support 122.05, 120.20, 119.15, 117.28, 117.04, 116.26, 115.15, 114.06, 113.04, and 112.15. Resistance 127.01, 127.19, 128.00 129.14, 129.27, 132.26, 133.00, 135.12, 135.19, 136.31, 137.31, and 142.31.

Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) bounced back to the neutral zone after breaking down below 9-month lows on 6/16/11. Absolute price of JNK also bounced back after breaking down below 9-month lows on 6/16/11.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell below the lows of the previous 6 months on 6/20/11, again reconfirming a significant downtrend. TIP/IEF entered a downtrend after peaking on 4/8/11. This downtrend means that fixed-income investors prefer the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs.

The U.S. dollar nearest futures contract price rose above the highs of the previous 3 trading days on 7/6/11, suggesting a minor upside reversal. USD has stabilized since making a low at 73.325 on 5/2/11, and that may be base building for a more significant upside reversal in a longer time frame. Support 74.505, 73.88, 73.515, 73.325, 72.86, and 70.80. Resistance 76.59, 76.87, 76.98, 77.675, 78.98, 79.34, 81.635, 81.935, 82.02, 83.64, 84.73, 85.36, 86.71, 88.80, 89.22, 89.71, and 92.53.

Advisory Service Sentiment: There were 39.8% Bulls versus 26.9% Bears as of 6/29/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio fell to 1.48, which is moderately below normal, with a 20-year range of 0.41 to 3.74, a median of 1.56, and a mean of 1.64. Note that Advisory Service Sentiment as of 4/6/11 peaked at 3.65, its highest level in 8 years. The market has been working off that excess since 5/2/11 by correcting to the downside.

VIX Fear Index collapsed below the lows of the previous 8-weeks, plunging to 15.12 intraday on 7/1/11, in a surprisingly rapid swing to bullish complacency. 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 Dow Theory signaled a 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.

As of the close on June 6, 2011, the Dow Theory confirmed a Secondary Reaction (a significant downside correction) for the general stock market, as the Dow Industrials and Transports both closed below 10-week lows. Previously, as of June 1, 2011, the Dow Theory gave a warning of a significant downside correction for the general stock market, as the Dow Industrials and Transports both closed below 5-week lows.

As of the close on July 1, 2011, the Dow Theory suggested a divergence and non-confirmation as the Dow-Jones Transportation Average closed above all previous closing price highs but the Dow-Jones Industrial Average failed to confirm. The Dow Industrials currently suggest nothing more than an insignificant Minor Ripple.

On 5/2/11, when the S&P 500 Composite (SPX) was 1,358.59, I warned, “The majority of major stock price indexes opened higher on gaps but reversed to close with losses on the day. This may signal exhaustion of the short-term uptrend. Sentiment indicators have been suggesting that the stock market may be over loved and overbought. And in view of the sharp reversals in the metal commodities, the so-called “inflation trade”, when speculators buy stocks and sell fixed-income instruments based on expectations of rising price levels for goods and services, may be on thin ice.”

Based on the daily SPX, momentum indicators gave bearish divergence warnings in April; that is, they never made it back to their February peaks when the price indexes rose to higher highs.

S&P 500 Composite (SPX, 1,339.22) rose 1.34 points or 0.10% on Wednesday 7/6/11. SPX shows substantial chart Resistance in a 3% band from 1331 to 1371. Support 1249 to 1279.

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
1370.50, high of 5/2/11
1359.44, high of 5/10/11
1346.82, high of 5/19/11

S&P 500 Cash Index Potential Support
1258.07, low of 6/16/11
1249.05, low of 3/16/11
1246.73, high of 12/13/10
1238.81, Fibonacci 78.6% of 1,576.09 high
1235.05, high of 12/7/10
1232.85, low of 12/16/10
1228.74, Fibonacci 61.8% of 2007-2009 range
1227.08, high of 11/5/10
1173.00, low of 11/16/10
1171.70, low of 10/27/10
1166.74, low of 10/20/10
1159.71, low of 10/19/10
1,151.41, low of 10/7/10
1,131.87, low of 10/4/10
1122.79, low of 9/23/2010
1114.63, low of 9/15/2010
1110.88, low of 9/10/2010
1091.15, low of 9/7/2010
1039.70, low of 8/27/10
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
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
2.22% Silver Miners Global X, SIL
1.36% Silver Trust iS, SLV
1.11% Transportation Av DJ, IYT
0.87% Gold Shares S.T., GLD
0.75% REIT VIPERs, VNQ
0.67% Realty Cohen & Steers, ICF
0.62% MidCap S&P 400 iS, IJH
0.62% Growth MidCap 400 B, IJK
0.62% Real Estate US DJ, IYR
0.60% Microcap Russell, IWC
0.59% Biotech SPDR, XBI
0.59% MidCap S&P 400 SPDRs, MDY
0.57% Japan Index, EWJ
0.55% Dividend Appreciation Vipers, VIG
0.54% Industrial SPDR, XLI
0.54% Consumer Staples SPDR, XLP
0.53% Small Cap VIPERs, VB
0.51% Technology DJ US, IYW
0.51% Bond, 20+ Years Treasury, TLT
0.51% Value SmallCap VIPERS, VBR
0.48% REIT Wilshire, RWR
0.48% DIAMONDS (DJIA), DIA
0.46% Technology SPDR, XLK
0.46% Value MidCap S&P 400 B, IJJ
0.46% Growth SmallCap VIPERs, VBK
0.43% Growth SmallCap R 2000, IWO
0.41% Growth 1000 Russell, IWF
0.40% SmallCap Russell 2000, IWM
0.40% Info Tech VIPERs, VGT
0.40% Materials SPDR, XLB
0.40% Growth S&P 500/BARRA, IVW
0.38% Dividend SPDR, SDY
0.36% Value SmallCap Russell 2000, IWN
0.36% Dividend High Yield Equity PS, PEY
0.36% Telecom DJ US, IYZ
0.36% Dividend DJ Select, DVY
0.33% Growth VIPERs, VUG
0.33% QQQ Nasdaq 100 Trust, QQQ
0.30% Water Resources, PHO
0.30% Growth MidCap Russell, IWP
0.29% Value SmallCap S&P 600 B, IJS
0.29% Bond, TIPS, TIP
0.28% Health Care SPDR, XLV
0.27% South Korea Index, EWY
0.26% Pacific VIPERs, VPL
0.26% Utilities VIPERs, VPU
0.24% SmallCap S&P 600, IJR
0.23% MidCap Russell, IWR
0.21% Bond, Corp, LQD
0.21% Utilities SPDR, XLU
0.20% Blend Total Market VIPERs, VTI
0.19% LargeCap 1000 R, IWB
0.18% LargeCap Blend S&P 100, OEF
0.18% Bond, 10 Year Treasury, IEF
0.16% LargeCap Blend Russell 3000, IWV
0.15% LargeCap VIPERs, VV
0.12% S&P 500 SPDRs LargeCap Blend, SPY
0.11% Growth BARRA Small Cap 600, IJT
0.09% S&P 500 iS LargeCap Blend, IVV
0.09% Bond Muni ATM-Free S&P iS, MUB
0.06% Bond, Aggregate, AGG
0.05% LargeCap Blend S&P=Weight R, RSP
0.04% Bond, High-Yield Corporate, HYG
0.04% Value MidCap Russell, IWS
0.04% Bond, 1-3 Year Treasury, SHY
0.03% Basic Materials DJ US, IYM
0.01% Bond Treasury Short-Term iS, SHV
0.00% Value LargeCap Dynamic PS, PWV
0.00% Taiwan Index, EWT
-0.02% Value VIPERs, VTV
-0.03% Commodity Tracking, DBC
-0.06% Financial Preferred, PGF
-0.06% Value 1000 Russell, IWD
-0.08% Preferred Stock iS, PFF
-0.08% Value S&P 500 B, IVE
-0.11% Global 100, IOO
-0.11% Growth EAFE MSCI, EFG
-0.13% Bond Ex-US Treas, BWX
-0.18% Energy & Nat Res iS GS, IGE
-0.18% Energy SPDR, XLE
-0.18% Oil, Crude, U.S. Oil Fund, USO
-0.20% Bond, High-Yield Junk, JNK
-0.22% Financials VIPERs, VFH
-0.22% Homebuilders SPDR, XHB
-0.22% Energy VIPERs, VDE
-0.23% Bond EmrgMkt JPM iS, EMB
-0.24% Energy DJ, IYE
-0.25% South Africa Index, EZA
-0.26% Metals & Mining SPDR, XME
-0.27% Emerging VIPERs, VWO
-0.28% United Kingdom Index, EWU
-0.29% Mexico Index, EWW
-0.30% Financial DJ US, IYF
-0.31% Dividend International, PID
-0.33% WilderHill Clean Energy PS, PBW
-0.34% Networking, IGN
-0.36% Consumer Discretionary SPDR, XLY
-0.39% Malaysia Index, EWM
-0.42% Semiconductor SPDR, XSD
-0.43% Energy Global, IXC
-0.47% Canada Index, EWC
-0.48% Oil Fund PowerShares, DBO
-0.49% Pacific ex-Japan, EPP
-0.51% Russia MV, RSX
-0.52% Financial SPDR, XLF
-0.54% Hong Kong Index, EWH
-0.54% Frontier Markets Guggenheim , FRN
-0.55% Emerging 50 BLDRS, ADRE
-0.56% Germany Index, EWG
-0.57% Chile MSCI iS, ECH
-0.59% Small Cap EAFE MSCI iS, SCZ
-0.62% Global ex US ACWI iS, ACWX
-0.63% EAFE Index, EFA
-0.65% Agriculture DB PS, DBA
-0.65% Singapore Index, EWS
-0.65% Financial Services DJ, IYG
-0.66% Australia Index, EWA
-0.66% Emerging Markets, EEM
-0.73% Capital Markets KWB ST, KCE
-0.75% Latin Am 40, ILF
-0.75% India Earnings WTree, EPI
-0.80% Semiconductor iS IGW, SOXX
-0.81% China LargeCap Growth G D H USX PS, PGJ
-0.86% Value EAFE MSCI, EFV
-0.88% Brazil Index, EWZ
-0.90% Switzerland Index, EWL
-0.90% Indonesia MV, IDX
-0.94% India PS, PIN
-1.04% European VIPERs, VGK
-1.04% Europe 350 S&P Index, IEV
-1.17% France Index, EWQ
-1.19% EMU Europe Index, EZU
-1.21% Netherlands Index, EWN
-1.28% China 25 iS, FXI
-1.29% Belgium Index, EWK
-1.30% Thailand MSCI iS, THD
-1.32% Austria Index, EWO
-1.40% Sweden Index, EWD
-1.76% Turkey MSCI iS, TUR
-2.24% Spain Index, EWP
-3.25% Italy Index, EWI