The stock market lost upside momentum, it remains short-term overbought, and it appers vulnerable to an immediate price pullback.

S&P 500 Composite (SPX, 1,337.89) fell 1.78 points or 0.13% on 7/5/11. SPX shows substantial chart Resistance in a 3% band from 1331 to 1371. Support 1249 to 1279.

Trading volume on the NYSE fell 1% below the previous day’s pace and still was 18% below the 200-day SMA. Low and falling volume raises doubts about the significance of any rally attempt.
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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
0.74% , PEJ , Leisure & Entertainment, PEJ
0.50% , ADRA , Asia 50 BLDRS, ADRA
1.00% , PSJ , Software, PSJ
0.59% , ITF , Japan LargeCap Blend TOPIX 150, ITF
0.97% , PHO , Water Resources, PHO
4.29% , SIL , Silver Miners Global X, SIL
0.86% , AEP , AM ELEC POWER
2.44% , EPU , Peru MSCI iS, EPU
0.42% , JKE , Growth LargeCap iS M, JKE
0.22% , PSTL , Steel Global PS ETF, PSTL
3.40% , MRO , MARATHON OIL
2.08% , TIN , TEMPLE INLAND
2.22% , NOV , NATIONAL OILWELL VARC0
0.40% , IXC , Energy Global, IXC
1.40% , DPS , Dr Pepper Snapple Group
1.51% , FMCN , Focus Media, FMCN
1.29% , MJN , Mead Johnson Nutrition
1.59% , CHKP , Check Point Software Technologies Ltd
0.90% , EWL , Switzerland Index, EWL
4.94% , SLV , Silver Trust iS, SLV
0.35% , IJR , SmallCap S&P 600, IJR
0.56% , PGJ , China LargeCap Growth G D H USX PS, PGJ
1.38% , NYT , NY TIMES STK A
0.17% , PPH , Pharmaceutical H, PPH
3.17% , DLX , DELUXE
1.45% , DLTR , Dollar Tree Stores Inc
0.17% , GVI , Bond Interm U.S. Gov, GVI
1.68% , HAL , HALLIBURTON
0.30% , IAH , Internet Architecture H, IAH
0.19% , EWJ , Japan Index, EWJ
1.10% , TDC , Teradata Corporation, TDC
1.39% , DDS , DILLARD STK A
0.10% , KLD , LargeCap Blend Socially Responsible iS, KLD

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.35% , MI , MARSHAL & ILSLEY
-1.47% , EWO , Austria Index, EWO
-4.87% , PWER , POWER ONE
-3.60% , RYAAY , Ryanair Holdings plc
-5.05% , TXT , TEXTRON
-0.92% , PPA , Aerospace & Defense, PPA
-3.75% , CIEN.O , CIENA
-3.48% , ODP , OFFICE DEPOT
-2.97% , MDT , MEDTRONIC
-1.48% , EZU , EMU Europe Index, EZU
-0.23% , JKF , Value LargeCap iS M, JKF
-0.15% , PBJ , Food & Beverage, PBJ
-0.73% , IWW , Value LargeCap Russell 3000, IWW
-2.44% , CPWR , COMPUWARE
-0.46% , FEU , Value LargeCap Euro STOXX 50 DJ, FEU
-3.02% , CMA , COMERICA
-2.42% , IP , INTL PAPER
-1.48% , EWK , Belgium Index, EWK
-1.00% , IXG , Financials Global LargeCap Value, IXG
-0.40% , ADRE , Emerging 50 BLDRS, ADRE
-1.28% , EWN , Netherlands Index, EWN
-2.03% , SWY , SAFEWAY
-1.08% , AES , AES
-2.65% , GNW , GENWORTH FINANCIAL
-0.26% , VOX , Telecom Services VIPERs, VOX
-1.83% , IGT , INTL GAME TECH
-1.97% , FEZ , Euro STOXX 50, FEZ
-1.91% , JCP , JC PENNEY
-2.16% , TLAB , TELLABS
-0.44% , JKI , Value MidCap iS M, JKI
-1.21% , PXN , Nanotech Lux, PXN
-0.39% , EWM , Malaysia Index, EWM
-2.03% , KLAC , KLA TENCOR
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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) 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 11-week highs on 6/24/11. 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 previous day’s high on 7/5/11, but Gold stopped short of last week’s high of 1514.8. 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 6 trading days on 7/5/11 but is in questionable technical position. 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 rose further above 2-month highs on 7/5/11, 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 previous day’s high and penetrated above a 5-day downtrend line on 7/5/11, 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 pulled back moderately over the past week but stayed within its larger pattern, which could be base building. USD has been stabilizing over the past 2 months after making a low at 73.325 on 5/2/11. 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, 1,337.89) fell 1.78 points or 0.13% on 7/5/11. SPX shows substantial chart Resistance in a 3% band from 1331 to 1371.

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
5.08% Thailand MSCI iS, THD
4.94% Silver Trust iS, SLV
4.29% Silver Miners Global X, SIL
2.18% Oil, Crude, U.S. Oil Fund, USO
1.86% Gold Shares S.T., GLD
1.64% Oil Fund PowerShares, DBO
1.34% Commodity Tracking, DBC
1.18% Agriculture DB PS, DBA
1.00% Energy & Nat Res iS GS, IGE
0.97% Water Resources, PHO
0.90% Switzerland Index, EWL
0.84% REIT Wilshire, RWR
0.77% Realty Cohen & Steers, ICF
0.77% REIT VIPERs, VNQ
0.70% South Korea Index, EWY
0.63% Bond, 10 Year Treasury, IEF
0.62% Real Estate US DJ, IYR
0.62% Energy SPDR, XLE
0.61% Growth BARRA Small Cap 600, IJT
0.61% Energy VIPERs, VDE
0.56% China LargeCap Growth G D H USX PS, PGJ
0.56% Growth SmallCap R 2000, IWO
0.50% QQQ Nasdaq 100 Trust, QQQ
0.49% Growth SmallCap VIPERs, VBK
0.45% Energy DJ, IYE
0.44% Consumer Discretionary SPDR, XLY
0.40% Energy Global, IXC
0.39% Bond, Aggregate, AGG
0.37% Growth MidCap 400 B, IJK
0.36% Bond, Corp, LQD
0.35% SmallCap S&P 600, IJR
0.29% Metals & Mining SPDR, XME
0.28% Canada Index, EWC
0.26% Technology DJ US, IYW
0.23% Basic Materials DJ US, IYM
0.22% Bond, 20+ Years Treasury, TLT
0.22% Growth VIPERs, VUG
0.22% Info Tech VIPERs, VGT
0.21% Small Cap VIPERs, VB
0.21% Value SmallCap S&P 600 B, IJS
0.20% Russia MV, RSX
0.19% Japan Index, EWJ
0.15% Technology SPDR, XLK
0.14% Growth S&P 500/BARRA, IVW
0.13% Bond, High-Yield Corporate, HYG
0.13% Preferred Stock iS, PFF
0.13% Materials SPDR, XLB
0.13% South Africa Index, EZA
0.12% Bond, 1-3 Year Treasury, SHY
0.11% Bond, TIPS, TIP
0.11% Biotech SPDR, XBI
0.09% Bond Muni ATM-Free S&P iS, MUB
0.08% MidCap S&P 400 iS, IJH
0.08% MidCap S&P 400 SPDRs, MDY
0.06% Growth MidCap Russell, IWP
0.06% Dividend International, PID
0.01% Value SmallCap VIPERS, VBR
0.00% Bond Treasury Short-Term iS, SHV
0.00% LargeCap Blend S&P 100, OEF
0.00% United Kingdom Index, EWU
-0.01% Hong Kong Index, EWH
-0.01% Blend Total Market VIPERs, VTI
-0.03% Bond EmrgMkt JPM iS, EMB
-0.03% Consumer Staples SPDR, XLP
-0.04% S&P 500 iS LargeCap Blend, IVV
-0.04% Emerging Markets, EEM
-0.06% Financial Preferred, PGF
-0.06% Microcap Russell, IWC
-0.06% SmallCap Russell 2000, IWM
-0.07% DIAMONDS (DJIA), DIA
-0.08% LargeCap VIPERs, VV
-0.08% S&P 500 SPDRs LargeCap Blend, SPY
-0.09% Sweden Index, EWD
-0.10% Growth 1000 Russell, IWF
-0.10% Bond, High-Yield Junk, JNK
-0.20% Telecom DJ US, IYZ
-0.20% Value MidCap S&P 400 B, IJJ
-0.23% LargeCap Blend S&P=Weight R, RSP
-0.25% Dividend High Yield Equity PS, PEY
-0.25% Value LargeCap Dynamic PS, PWV
-0.25% Turkey MSCI iS, TUR
-0.25% Small Cap EAFE MSCI iS, SCZ
-0.25% Chile MSCI iS, ECH
-0.26% Emerging VIPERs, VWO
-0.28% Health Care SPDR, XLV
-0.30% Dividend Appreciation Vipers, VIG
-0.31% Dividend SPDR, SDY
-0.32% Bond Ex-US Treas, BWX
-0.33% Homebuilders SPDR, XHB
-0.35% Frontier Markets Guggenheim , FRN
-0.36% Brazil Index, EWZ
-0.38% Growth EAFE MSCI, EFG
-0.39% Value VIPERs, VTV
-0.39% Malaysia Index, EWM
-0.40% Networking, IGN
-0.40% Emerging 50 BLDRS, ADRE
-0.41% LargeCap Blend Russell 3000, IWV
-0.42% MidCap Russell, IWR
-0.43% Value S&P 500 B, IVE
-0.47% Utilities VIPERs, VPU
-0.47% Global 100, IOO
-0.48% Latin Am 40, ILF
-0.48% LargeCap 1000 R, IWB
-0.48% Global ex US ACWI iS, ACWX
-0.48% Dividend DJ Select, DVY
-0.49% Pacific VIPERs, VPL
-0.54% Value SmallCap Russell 2000, IWN
-0.55% India PS, PIN
-0.57% Industrial SPDR, XLI
-0.57% Mexico Index, EWW
-0.58% India Earnings WTree, EPI
-0.59% Utilities SPDR, XLU
-0.59% EAFE Index, EFA
-0.60% Semiconductor SPDR, XSD
-0.63% Financial DJ US, IYF
-0.65% Singapore Index, EWS
-0.67% Financials VIPERs, VFH
-0.70% Germany Index, EWG
-0.72% European VIPERs, VGK
-0.76% China 25 iS, FXI
-0.78% Europe 350 S&P Index, IEV
-0.79% Semiconductor iS IGW, SOXX
-0.83% Financial Services DJ, IYG
-0.83% Capital Markets KWB ST, KCE
-0.84% Taiwan Index, EWT
-0.87% Transportation Av DJ, IYT
-0.88% WilderHill Clean Energy PS, PBW
-0.90% Financial SPDR, XLF
-0.91% Value 1000 Russell, IWD
-0.95% Value EAFE MSCI, EFV
-0.95% Value MidCap Russell, IWS
-1.28% Netherlands Index, EWN
-1.35% Indonesia MV, IDX
-1.46% Pacific ex-Japan, EPP
-1.47% Austria Index, EWO
-1.48% EMU Europe Index, EZU
-1.48% Belgium Index, EWK
-1.64% Australia Index, EWA
-1.68% France Index, EWQ
-1.96% Italy Index, EWI
-2.24% Spain Index, EWP