Stocks Rose Again, But Trading Volume Fell Significantly

Consumer Discretionary stock sector Relative Strength Ratio (XLY/SPY) rose to another new 2-month high on 9/2/10 and remains bullish.

Utilities stock sector absolute price rose to a new 8-month high on 9/2/10 and remains bullish.

Materials stock sector Relative Strength Ratio (XLB/SPY) rose to a new 7-month high on 9/2/10. Technically, the Ratio remains neutral, with the 50-day SMA below the 200-day SMA–although the SMAs appear to be converging toward a possible bullish crossover in weeks ahead.

Technology stock sector Relative Strength Ratio (XLK/SPY) fell to another new 3-month low on 9/2/10 and remains neutral.

The S&P 500 Equally Weighted ETF Relative Strength Ratio (RSP/SPY) rose above 5-week highs on 9/2/10 and is bullish. Longer term, RSP/SPY has been bullish, trending upward since 11/19/08.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) crossed above its 200 SMA on 9/2/10 but remains neutral, with the 50-day SMA below the 200-day SMA.

The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose above 5-week highs on 9/2/10 and is bullish.

Copper nearest futures contract price rose further above 4-month highs on 9/2/10, again confirming an intermediate-term Secondary Uptrend. Strength in Copper suggests confidence about prospects for the world economy.

S&P 500 Composite (SPX, 1,090.10) rose 9.81 points or 0.91% on Thursday 9/2/10. Trading volume fell significantly, thereby denying confirmation of price strength. SPX turned neutral by crossing above its 50-day SMA but remains below its falling 200-day SMA. The market may need to demonstrate further upside follow-through in order to turn around investor confidence, which has fallen to a low level. It still may be a “show me” market. The stock market has been consolidating in a trading range between the SPX 1131.23 high of 6/21/2010 and the SPX 1010.91 low of 7/1/2010. Further consolidation seems likely in days ahead.
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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
5.24% , BHH , Internet B2B H, BHH
1.46% , PIV , Value Line Timeliness MidCap Gr, PIV
2.31% , PMR , Retail, PMR
1.00% , DSV , Value Small Cap DJ, DSV
9.84% , TIN , TEMPLE INLAND
7.73% , LIZ , LIZ CLAIRBORNE
8.05% , JWN , NORDSTROM
1.94% , PWJ , Growth Mid Cap Dynamic PS, PWJ
5.72% , TER , TERADYNE
0.73% , PWP , Value MidCap Dynamic PS, PWP
3.81% , HMA , HEALTH MGMT STK A
5.57% , FRX , FOREST LABS STK A
3.46% , ITW , ILLINOIS TOOL
6.30% , GT , GOODYEAR TIRE
4.01% , MCO , MOODYS CORP
1.20% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
2.42% , SYK , STRYKER
4.14% , SBUX , STARBUCKS
2.80% , MI , MARSHAL & ILSLEY
5.42% , CTB , COOPER TIRE
4.46% , URBN , Urban Outfitters Inc.
2.93% , TNB , THOMAS & BETTS
0.58% , IOO , Global 100, IOO
0.80% , TMW , Wilshire 5000 ST TM, TMW
2.03% , FPX , IPOs, First Tr IPOX-100, FPX
2.97% , APC , ANADARKO PETRO
3.96% , WYN , Wyndham Worldwide
1.29% , FEZ , Euro STOXX 50, FEZ
3.30% , LOW , LOWES
3.24% , HAS , HASBRO
3.76% , PSTL , Steel Global PS ETF, PSTL
4.83% , S , SPRINT NEXTEL
6.00% , OMX , OFFICEMAX INC., OMX
0.99% , GNTX , Gentex Corporation
1.55% , IGN , Networking, IGN
3.51% , DRI , DARDEN REST
1.92% , WFMI , Whole Foods Market Inc
0.59% , ADRU , Europe 100 BLDRS, ADRU
3.79% , FAST , Fastenal Company
2.95% , AA , ALCOA

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.25% , APA , APACHE
-2.86% , HRB , H&R BLOCK
-1.49% , AEE , AMEREN
-0.72% , PPL , PPL
-0.08% , TTH , Telecom H, TTH
-1.09% , PX , PRAXAIR
-1.64% , CI , CIGNA
-0.46% , AXP , AMERICAN EXPRESS
-0.61% , RIG , TRANSOCEAN
-1.37% , MYY , Short 100% MidCap 400, MYY
-0.51% , CCE , COCA COLA ENTER
-0.08% , CIEN.O , CIENA
-0.34% , PNW , PINNACLE WEST
-0.38% , HSY , HERSHEY FOODS
-0.13% , AGG , Bond, Aggregate, AGG
-0.48% , XEL , XCEL ENERGY
-0.25% , STJ , ST JUDE MEDICAL
-0.42% , IEF , Bond, 10 Year Treasury, IEF

9 major U.S. stock sectors ranked in order of long-term relative strength:

Consumer Discretionary (XLY) Bullish, Over Weight. The Relative Strength Ratio (XLY/SPY) rose to another new 2-month high on 9/2/10 and remains bullish. The Ratio remains above both SMAs and the 50-day SMA remains above the 200-day SMA. Absolute price remains neutral, with the 50-day SMA below the 200-day SMA. Support 29.80, 28.64, 28.21, and 26.62. Resistance 32.41, 33.12, 34.39, 36.13, 38.25 and 39.09.

Utilities (XLU) Bullish, Over Weight. The Relative Strength Ratio (XLU/SPY) rose to a new 12-month high on 8/31/10 and remains bullish, with the ratio above 50-day and 200-day SMAs, and with the 50 above the 200. Absolute price of XLU rose to a new 8-month high on 9/2/10 and remains bullish. Support 30.15, 29.66, 27.91, 27.44, and 25.76. Resistance 31.64 and 32.08.

Materials (XLB) Neutral, Market Weight. The Relative Strength Ratio (XLB/SPY) rose to a new 7-month high on 9/2/10. Technically, the Ratio remains neutral, with the 50-day SMA below the 200-day SMA–although the SMAs appear to be converging toward a possible bullish crossover in weeks ahead. Absolute price remains neutral, with the 50-day SMA below the 200-day SMA. Support 29.88, 29.43, and 27.67. Resistance 32.93, 33.06, 35.47, and 37.56.

Industrial (XLI) Neutral, Market Weight. The Relative Strength Ratio (XLI/SPY) crossed above the 50-day SMA on 9/1/10, turning bullish again. Absolute price remains neutral, with the 50-day below the 200-day SMA. Support 27.67, 26.79 and 26.66. Resistance 31.15, 32.41, 33.46, 34.24, 34.50, and 35.00.

Consumer Staples (XLP) Neutral, Market Weight. The Relative Strength Ratio (XLP/SPY) The Relative Strength Ratio (XLY/SPY) rose above 7-month highs on 8/24/10, again confirming a bullish trend. Absolute price of XLP remains neutral, with the 50-day below the 200-day SMA. Support 26.34, 25.30, and 24.95. Resistance 27.83, 27.95, 28.20, 28.75, 29.29 and 30.29.

Technology (XLK) Neutral, Market Weight. The Relative Strength Ratio (XLK/SPY) fell to another new 3-month low on 9/2/10 and remains neutral. Absolute price of XLK remains bearish, below both SMAs and with the 50-day SMA below the 200-day SMA. Support 20.01 and 19.51. Resistance 22.62, 23.27, 24.16, 24.68, and 25.69.

Health Care (XLV) Bearish, Under Weight. The Relative Strength Ratio (XLV/SPY) has been bearish since peaking on 2/23/09. Absolute price of XLV has been bearish since peaking on 1/20/10. Support 27.49. Resistance 29.38, 29.93, 30.83, 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.

Energy (XLE) Bearish, Under Weight. The Relative Strength Ratio (XLE/SPY) has been mostly bearish since peaking on 7/1/08. Absolute price of XLE turned mostly bearish after peaking on 4/26/10. Support 50.33, 48.56, 46.16, and 43.66. Resistance 56.70, 58.11, 59.84, 62.30, 62.73, 69.95, and 78.10.

Financial (XLF) Bearish, Under Weight. The Relative Strength Ratio (XLF/SPY) fell to a new 9-month low on 8/30/10 and remains bearish—despite a 3.88% price jump on 9/1/10. Absolute price fell to a new 12-month low on 8/25/10 and has been in a bearish trend since peaking on 4/15/10. Support 13.29 and 13.08. Resistance 15.09, 15.67, 16.13, 16.90, 17.12, 17.16, and 17.87.
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) rose to another new 10-month high on 9/1/10, again confirming a significant bullish trend. Absolute price of EEM remains neutral, with the 50-day SMA below the 200-day SMA.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) remains neutral, with the 50-day SMA below the 200-day SMA.

NASDAQ Composite/S&P 500 Relative Strength Ratio fell below 6-month lows on 8/13/10, thereby confirming a significant correction to the downside.

The S&P 500 Equally Weighted ETF Relative Strength Ratio (RSP/SPY) rose above 5-week highs on 9/2/10 and is bullish. Longer term, RSP/SPY has been bullish, trending upward since 11/19/08. Absolute price remains neutral, with the 50-day SMA below the 200-day SMA.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) appears to be consolidating losses since its low on 6/15/10. Big caps have been out of favor for more than 10 years, since 3/29/2000.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) crossed above its 200 SMA on 9/2/10 but remains neutral, with the 50-day SMA below the 200-day SMA. This Ratio has demonstrated underperformance of Small Caps since peaking on 5/17/10. Longer term, however, IWM/SPY has been bullish, trending upward since 4/8/99.

The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose above 5-week highs on 9/2/10 and is bullish. Longer term, MDY /SPY has been bullish, trending upward since 4/7/99. Absolute price remains neutral, with the 50-day SMA below the 200-day SMA.

Crude Oil nearest futures contract recovered most of its previous day’s loss on 9/1/10. Oil may be bearish: it has been heading down most days since making a high at 83.40 on 8/4/10. A longer time frame downside correction started after the 87.15 peak on 5/3/10. Watch critical support around 70.76 and 70.35. Support 70.76, 70.35, 69.51, 68.59, 67.15, 65.05, and 64.24. Resistance 77.03, 84.55, 87.15, 90.51, 98.65, and 102.84.

Gold nearest futures contract rose above 8-week highs on 8/31/10, again confirming a significant uptrend. Support 1232.4, 1210.9, 1191.5, 1155.6, 1124.3, 1120.9, 1084.8, 1045.2, 1026.9, and 989.3. Resistance: 1264.8 and 1267.1.

Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) has been whipsawing sideways through moving averages in recent months. Best stand aside until a clear trend emerges.

Silver/Gold Ratio has been mostly neutral, consolidating losses since making a low on 2/8/10. Longer term, Silver has underperformed Gold since 4/19/06.

Copper nearest futures contract price rose further above 4-month highs on 9/2/10, again confirming an intermediate-term Secondary Uptrend. Strength in Copper suggests confidence about prospects for the world economy, while weakness in Copper suggests doubts. Support 3.1775, 2.9285, 2.8555, 2.8445, and 2.72. Resistance 3.68, 3.795, 4.0825, and 4.27.

U.S. Treasury Bond nearest futures contract price surrendered most of the previous 2-day’s gains on 9/1/10, which by itself is not much of a clue. The bond set its highest daily close in 19-months on 8/31/10, again confirming that the major trend remained bullish. Support 130.29, 126.01, 125.07, 124.19, 123.03, 121.28, 119.26, 118.24, 118.12, 115.15, 114.06. 113.04, and 112.15. Resistance 136.31, 137.31, and 142.31.

Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) fell below 3-month lows on 8/26/10, again confirming the preexisting bearish trend. The Ratio has been heading lower since the peak on 1/8/10. From 3/9/09 to 1/8/10, JNK/LQD was bullish, with the ratio moving upward and Junk outperforming.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell further below 15-month lows on 8/24/10 and remains RELATIVELY bearish. This implies that investors are choosing less inflation protection.

The U.S. dollar nearest futures contract price fell below 8-day lows on 9/1/10. The short-term trend now appears to be bearish, while the Secondary intermediate-term trend appears uncertain…possibly bearish. Long term, USD may be consolidating losses since bottoming at 70.805 in March 2008. Support 80.14, 79.73, 79.61, 78.83, 78.20, 76.74 and 75.90, 74.27, and 70.805. Resistance 83.64, 85.36, 86.71, 88.80, 89.22, 89.71, and 92.53.

Advisory Service Sentiment: There were 29.4% Bulls versus 37.7% Bears as of 9/1/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio fell to 0.78, down from 1.07 the previous week. This ratio is now at its lowest level of bullish sentiment in 17 months, since 3/25/09. The 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.

The Dow Theory suggests a Primary Tide Bull Market, in my interpretation. The Dow Theory last 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, 1,090.10) rose 9.81 points or 0.91% on Thursday 9/2/10. Trading volume fell significantly, thereby denying confirmation of price strength. SPX turned neutral by crossing above its 50-day SMA but remains below its falling 200-day SMA. The market may need to demonstrate further upside follow-through in order to turn around investor confidence, which has fallen to a low level. It still may be a “show me” market. The stock market has been consolidating in a trading range between the SPX 1131.23 high of 6/21/2010 and the SPX 1010.91 low of 7/1/2010. Further consolidation seems likely in days ahead.

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
1173.57, high of 5/13/2010
1040.00, Fibonacci 61.8% of 2010 range
1131.23, high of 6/21/2010
1100.14, high of 8/17/2010

S&P 500 Cash Index Potential Support
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

2.97% Homebuilders SPDR, XHB
2.17% Semiconductor SPDR, XSD
2.03% Semiconductor iS GS, IGW
1.86% Consumer Discretionary SPDR, XLY
1.70% Growth MidCap Russell, IWP
1.69% Silver Trust iS, SLV
1.64% Austria Index, EWO
1.64% Biotech SPDR, XBI
1.59% Growth SmallCap VIPERs, VBK
1.58% WilderHill Clean Energy PS, PBW
1.55% Networking, IGN
1.51% France Index, EWQ
1.50% Growth MidCap 400 B, IJK
1.47% Netherlands Index, EWN
1.45% Growth SmallCap R 2000, IWO
1.38% REIT Wilshire, RWR
1.38% Growth BARRA Small Cap 600, IJT
1.38% MidCap Russell, IWR
1.34% Oil, Crude, U.S. Oil Fund, USO
1.31% Realty Cohen & Steers, ICF
1.31% MidCap S&P 400 SPDRs, MDY
1.30% LargeCap Blend S&P=Weight R, RSP
1.30% Transportation Av DJ, IYT
1.28% Small Cap VIPERs, VB
1.27% Metals & Mining SPDR, XME
1.27% REIT VIPERs, VNQ
1.26% Industrial SPDR, XLI
1.26% Italy Index, EWI
1.26% Real Estate US DJ, IYR
1.25% MidCap S&P 400 iS, IJH
1.24% South Africa Index, EZA
1.22% Value MidCap S&P 400 B, IJJ
1.22% Spain Index, EWP
1.22% Value MidCap Russell, IWS
1.21% Value SmallCap S&P 600, RZV
1.19% Materials SPDR, XLB
1.12% Growth LargeCap NASDAQ 100, QQQQ
1.11% Financial Services DJ, IYG
1.10% SmallCap Russell 2000, IWM
1.10% EMU Europe Index, EZU
1.09% SmallCap S&P 600, IJR
1.08% Growth VIPERs, VUG
1.05% Blend Total Market VIPERs, VTI
1.05% Water Resources, PHO
1.04% Growth 1000 Russell, IWF
1.04% Natural Resource iS GS, IGE
1.04% LargeCap 1000 R, IWB
1.03% LargeCap Blend Russell 3000, IWV
1.02% Info Tech VIPERs, VGT
1.02% China 25 iS, FXI
1.01% Basic Materials DJ US, IYM
0.99% Belgium Index, EWK
0.98% Financial SPDR, XLF
0.98% Value SmallCap VIPERS, VBR
0.98% Sweden Index, EWD
0.96% Value SmallCap S&P 600 B, IJS
0.96% China LargeCap Growth G D H USX PS, PGJ
0.95% S&P 500 iS LargeCap Blend, IVV
0.93% LargeCap VIPERs, VV
0.93% S&P 500 SPDRs LargeCap Blend, SPY
0.92% Value S&P 500 B, IVE
0.91% Value SmallCap Russell 2000, IWN
0.91% Financial DJ US, IYF
0.90% Growth S&P 500/BARRA, IVW
0.90% Technology SPDR, XLK
0.87% Turkey MSCI iS, TUR
0.87% Mexico Index, EWW
0.86% Dividend International, PID
0.86% Financials VIPERs, VFH
0.86% Energy VIPERs, VDE
0.84% Value LargeCap Dynamic PS, PWV
0.84% Switzerland Index, EWL
0.83% European VIPERs, VGK
0.83% Value VIPERs, VTV
0.83% Energy SPDR, XLE
0.83% Canada Index, EWC
0.82% Capital Markets KWB ST, KCE
0.82% Europe 350 S&P Index, IEV
0.81% Technology DJ US, IYW
0.81% Dividend Appreciation Vipers, VIG
0.78% Energy DJ, IYE
0.76% Agriculture DB PS, DBA
0.76% Value 1000 Russell, IWD
0.76% Energy Global, IXC
0.75% LargeCap Blend S&P 100, OEF
0.75% Germany Index, EWG
0.73% Small Cap EAFE MSCI iS, SCZ
0.73% Latin Am 40, ILF
0.71% Commodity Tracking, DBC
0.67% Dividend SPDR, SDY
0.63% Consumer Staples SPDR, XLP
0.60% Malaysia Index, EWM
0.58% Global 100, IOO
0.57% Growth EAFE MSCI, EFG
0.56% EAFE Index, EFA
0.54% Value EAFE MSCI, EFV
0.54% Telecom DJ US, IYZ
0.52% Health Care SPDR, XLV
0.49% Gold Shares S.T., GLD
0.47% DIAMONDS (DJIA), DIA
0.45% United Kingdom Index, EWU
0.44% Pacific ex-Japan, EPP
0.41% Global ex US ACWI iS, ACWX
0.41% Microcap Russell, IWC
0.40% Dividend DJ Select, DVY
0.38% Brazil Index, EWZ
0.31% Hong Kong Index, EWH
0.24% Emerging 50 BLDRS, ADRE
0.17% Bond Ex-US Treas, BWX
0.17% Emerging Markets, EEM
0.17% Financial Preferred, PGF
0.16% Bond, High-Yield Corporate, HYG
0.13% Bond Muni ATM-Free S&P iS, MUB
0.13% India Earnings WTree, EPI
0.09% Australia Index, EWA
0.08% Taiwan Index, EWT
0.05% Emerging VIPERs, VWO
0.04% Chile MSCI iS, ECH
0.04% South Korea Index, EWY
0.03% Russia MV, RSX
0.00% Utilities SPDR, XLU
0.00% Dividend High Yield Equity PS, PEY
-0.02% Pacific VIPERs, VPL
-0.03% Bond, 1-3 Year Treasury, SHY
-0.07% Bond EmrgMkt JPM iS, EMB
-0.13% Bond, Corp, LQD
-0.13% Bond, Aggregate, AGG
-0.15% Preferred Stock iS, PFF
-0.19% Bond, TIPS, TIP
-0.23% Utilities VIPERs, VPU
-0.24% Singapore Index, EWS
-0.31% Japan Index, EWJ
-0.42% Bond, 10 Year Treasury, IEF
-0.47% Thailand MSCI iS, THD
-0.83% India PS, PIN
-1.06% Bond, 20+ Years Treasury, TLT
-1.47% Indonesia MV, IDX