Materials Relative Strength Ratio (XLB/SPY) fell below 14-month lows on 9/12/11, reconfirming a long-term downtrend.

The S&P 500 Composite (SPX, 1,162.27) rose 8.04 points or 0.70% on Monday, September 12, 2011. SPX fell below the lows of the previous 9 trading days before rebounding in the final hour of trading in reaction to a report in the media that the Chinese may invest heavily in Italian bonds.

NYSE volume fell 5%, calling into question the staying power of the rally attempt.

SPX appears to be at a critical juncture: testing the lower boundary line of a Bear Flag Continuation Pattern. A break Monday’s low of 1,136.07, on higher volume would confirm a new and significant down leg in this ongoing Bear Market.

Longer-term, SPX fell below 11-month lows on 8/9/11 and remains bearishly below falling 20-, 50-, and 200-day SMAs.

Minor upside reversals (such as we saw last Tuesday and Wednesday) lure short-term traders into trying to trade a bounce. Minor price corrections against the trend are normal and expected, of course. But playing minor 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, as we have seen repeatedly in recent weeks.

We keep in mind that the dominant trend for the stock market remains persistently bearish. That is the bias. In a bear market, surprises come to the downside.

Typically, there is no safe place to hide in a Dow Theory Primary Tide Bear Market. Even those stocks that have held up relatively well through most of the Bear Market eventually succumb to the relentless tide of selling.
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Includes Top Ten ETFs and Major Trend Relative Strength Rankings.
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Stock Market Indicators

NASDAQ Composite/S&P 500 Relative Strength Ratio rose above previous 10-year highs on 9/12/11. This means a long NASDAQ Composite and short S&P 500 hedge has been a winning trade. NASDAQ absolute price fell further below 50- and 200-day SMAs on 9/9/11, however, which is bearish.

Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) remains bearish. The EEM/SPY Ratio has been in a downtrend since peaking on 10/14/10. EEM/SPY broke down below 6-month lows on 8/25/11, remains below its 50- and 200-day SMAs, and the 50-day SMA remains below the 200-day SMA. Absolute price has been weak since 5/2/11, broke down below 13-month lows on 8/8/11 , and remains below falling 50- and 200-day SMAs.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) remains bearish. The EFA/SPY Ratio broke down below 6-year lows on 9/9/11. Absolute price has been weak since 5/2/11 and broke down below 12-month lows on 9/9/11. Both the EFA/SPY Ratio and the EFA price remain below falling 50- and 200-day SMAs.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below the lows of the previous 5 weeks on 9/7/11, confirming a minor downtrend. Longer term, OEX/SPX fell below 28-year lows on 5/26/11, confirming a bearish major trend.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) remains bearish for the major trend. IWM/SPY fell below 11-month lows on 8/22/11, remains below its 50- and 200-day SMAs, and the 50-day SMA remains below the 200-day SMA. Absolute price has been weak since 5/2/11, broke down below 13-month lows on 8/8/11, and remains below falling 50- and 200-day SMAs.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) remains bearish for the major trend. MDY/SPY fell below 11-month lows on 8/8/11, confirming a bearish major trend. Both the MDY/SPY Ratio and the MDY price remain below 50- and 200-day SMAs.

Advisory Service Sentiment: There were 38.7% Bulls versus 37.6% Bears as of 9/7/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio was 1.03, down from 1.12 the previous week. The Bull/Bear Ratio is now nearly 1 standard deviation below the 20-year average. When advisors turn this cautious, stocks usually have further to fall. The 20-year median is 1.56 and the mean is 1.64.

VIX Fear Index rose to 43.18 intraday on 9/12/11, up from 30.16 on 8/31/11. VIX hit 48.00 on 8/8/11, its highest level in 14 months, since 5/21/10. It could be possible for VIX to rise much higher: VIX was 89.53 on 10/24/08 during the financial crisis. Options players tend to grow more fearful as stock prices decline, and the trend of stock prices is down. 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 Bear Market on 8/2/11, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed below their closing price lows of June, 2011.

The S&P 500 Composite (SPX, 1,162.27) rose 8.04 points or 0.70% on Monday, September 12, 2011

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
1370.58, 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
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
1234.56, low of 8/3/11
1232.85, low of 12/16/10
1228.74, Fibonacci 61.8% of 2007-2009 range
1230.71, high of 8/31/11

S&P 500 Cash Index Potential Support
1136.07, low of 9/12/2010
1101.54, low of 8/9/2010
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
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Fixed-Income Investments

Bond, iShares Barclays 20+ Year U.S. Treasury ETF (TLT) price rose above the highs of the previous 2 years on 9/6/11, again confirming a major uptrend. Support 111.31, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 114.93, 116.92, 120.45, and 123.15.

Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (TLT) price rose above all-time highs on 9/9/11, confirming a preexisting major uptrend. Investors are anticipating a Fed “Operation Twist” to be announced after the Fed meeting on 9/22/11; the central bank would attempt to lower longer-term interest rates, in order to stimulate the economy, by selling short-term debt instruments on its balance sheet and using the proceeds to buy 7-10 year Treasurys.

Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) remains bearish. Short term, JNK/LQD fell below 4-week lows on 9/9/11. Long term, JNK/LQD fell below 2-year lows on 8/10/11.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below 11-month lows on 9/6/11. TIP/IEF has been weak since peaking on 4/8/11 and remains below 3 key SMAs: 20, 50, and 200 days. This means fixed-income investors have been choosing the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs. Fixed-income investors are not worried about inflation.
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) is acting bullish. UUP rose above the highs of the previous 5 months, rose further above a 4-month Triangle boundary line, and rose above its 200-day SMA on 9/12/11. Support 21.67, 21.24 ,21.24, and 20.84. Resistance 21.98, 22.21, and 22.63.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price fell below the lows of the previous 14 trading days on 9/12/11, suggesting a minor downtrend within a larger downtrend. On 8/9/11, DBA traded below 8-month lows, confirming a long-term downtrend.

Crude Oil, United States Oil ETF (USO) price fell below the lows of the previous 2 trading days on 9/9/11, suggesting a minor downtrend within a larger downtrend. Oil fell below the lows of the previous 2 years on 8/9/11, confirming a major downtrend. Support 32.60, 31.45, 30.31, 26.28, 22.74. Resistance 35.00, 35.14, 39.25, 40.74, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) has been consolidating gains within its major uptrend over the past 4 days. Gold rose above all-time highs intraday on 9/6/11. Although minor price consolidations and corrections are to be expected in any trend, the dominant trend remains persistently bullish. In a world of too much debt, weak currencies, and self-serving politicians running amok, investors around the globe seek the safety of gold as the only forever-true money. Support: 174.45, 165.88, 159.68, 156.11, 154.10, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: 185.85.

Gold Mining Stocks ETF/ Gold Shares ETF Relative Strength Ratio (GDX/GLD) rose above 5-week highs on 9/7/11, confirming a minor rally attempt for the short term. GDX/GLD fell below 29-month lows on 8/8/11, confirming a bearish major trend for the long term. Absolute price of GDX is bullish, just not as bullish as GLD; investors prefer Gold over Gold Miners.

Silver, iShares Silver Trust ETF (SLV) rose above 3-month highs on 8/22/11, confirming a medium-term price uptrend, but has turned choppy and volatile since. SLV remains above key SMAs, so we assume the main trend is still bullish. Support 38.65,, 38.05, 36.04, 35.29, 34.02, and 31.97. Resistance: 42.78, 44.71 and 48.35.

Silver/Gold ETFs Ratio (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-Idx ETN (JJC ) remains bearish. JJC fell further below 50- and 200-day SMAs on 9/9/11 and fell below the lows of the previous 8 months on 8/10/11. Weakness in Copper suggests doubts about the economic outlook, while strength in Copper suggests confidence. Support 51.11, 50.59, and 49.00. Resistance: 54.10, 54.94, 56.64, 57.48, 59.06, 60.04, and 61.69.
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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
0.56% , XLG , LargeCap Rydex Rus Top 50, XLG
0.92% , KCE , Capital Markets KWB ST, KCE
2.97% , PXQ , Networking, PXQ
2.89% , SOXX , Semiconductor iS IGW, SOXX
1.91% , HHH , Internet H, HHH
1.82% , RKH , Bank Regional H, RKH
0.35% , JKL , Value SmallCap iS M, JKL
0.47% , FDV , Value 40 Large Low P/E FT DB, FDV
3.98% , MHP , MCGRAW HILL
0.68% , IWW , Value LargeCap Russell 3000, IWW
1.49% , ONEQ , Growth LargeCap NASDAQ Fidelity, ONEQ
2.22% , WYNN , Wynn Resorts L
0.61% , VPU , Utilities VIPERs, VPU
6.27% , EK , EASTMAN KODAK
0.47% , IWS , Value MidCap Russell, IWS
1.74% , GRMN , GARMIN LTD
1.49% , DTE , DTE ENERGY
0.98% , IYC , Consumer Cyclical DJ, IYC
1.61% , PSJ , Software, PSJ
1.95% , NCR , NCR
4.86% , PMCS , PMC SIERRA
1.00% , VCR , Consumer D. VIPERs, VCR
3.45% , NBR , NABORS
1.74% , HBAN , HUNTINGTON
3.86% , PNC , PNC FINL SVC
4.61% , MBI , MBIA
0.87% , IWN , Value SmallCap Russell 2000, IWN
0.48% , IWP , Growth MidCap Russell, IWP
0.51% , IJK , Growth MidCap 400 B, IJK
0.53% , TMW , Wilshire 5000 ST TM, TMW
0.84% , XEL , XCEL ENERGY
2.36% , SLM , SLM CORP
1.91% , IGN , Networking, IGN

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.77% , FRN , Frontier Markets Guggenheim , FRN
-1.50% , RFV , Value MidCap S&P 400, RFV
-9.96% , THC , TENET HEALTHCARE
-1.06% , IAH , Internet Architecture H, IAH
-2.15% , PWO , OTC Dynamic PS, PWO
-2.07% , PIC , Insurance, PIC
-2.90% , ECH , Chile MSCI iS, ECH
-1.76% , EWO , Austria Index, EWO
-4.34% , PSTL , Steel Global PS ETF, PSTL
-2.62% , SIRI , Sirius Satellite
-1.52% , ADRU , Europe 100 BLDRS, ADRU
-1.95% , ADRD , Developed 100 BLDRS, ADRD
-0.78% , NY , Value LargeCap NYSE 100 iS, NY
-0.70% , IXG , Financials Global LargeCap Value, IXG
-2.90% , NIHD , NII Holdings, Inc.
-4.01% , SIL , Silver Miners Global X, SIL
-2.85% , DOV , DOVER
-0.31% , IXP , Telecommunications Global, IXP
-1.33% , PSQ , Short 100% QQQ, PSQ
-3.41% , SLV , Silver Trust iS, SLV
-2.25% , EWQ , France Index, EWQ
-1.31% , JKF , Value LargeCap iS M, JKF
-1.01% , IYM , Basic Materials DJ US, IYM
-1.48% , TEVA , Teva Pharmaceutical Industries Limited
-4.04% , ERIC.O , LM Ericsson Telephone Company
-2.19% , DD , DU PONT
-1.24% , OXY , OCCIDENTAL
-4.17% , GT , GOODYEAR TIRE
-1.38% , FMCN , Focus Media, FMCN
-1.39% , CL , COLGATE
-1.87% , FEZ , Euro STOXX 50, FEZ
-0.55% , EFV , Value EAFE MSCI, EFV
-1.27% , EPP , Pacific ex-Japan, EPP
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
3.74% Semiconductor SPDR, XSD
2.93% Turkey MSCI iS, TUR
2.89% Semiconductor iS IGW, SOXX
1.91% Networking, IGN
1.68% Oil, Crude, U.S. Oil Fund, USO
1.28% QQQ Nasdaq 100 Trust, QQQ
1.27% Technology DJ US, IYW
1.27% Info Tech VIPERs, VGT
1.26% Financial Services DJ, IYG
1.19% Technology SPDR, XLK
1.19% Consumer Discretionary SPDR, XLY
1.14% Financial SPDR, XLF
1.05% Financial DJ US, IYF
1.04% Financials VIPERs, VFH
1.01% Homebuilders SPDR, XHB
0.98% Japan Index, EWJ
0.92% Capital Markets KWB ST, KCE
0.90% Oil Fund PowerShares, DBO
0.89% Value SmallCap S&P 600 B, IJS
0.88% Growth SmallCap R 2000, IWO
0.87% Value SmallCap Russell 2000, IWN
0.86% SmallCap Russell 2000, IWM
0.82% Utilities SPDR, XLU
0.76% Small Cap VIPERs, VB
0.72% SmallCap S&P 600, IJR
0.71% Blend Total Market VIPERs, VTI
0.71% Value 1000 Russell, IWD
0.70% LargeCap VIPERs, VV
0.69% S&P 500 iS LargeCap Blend, IVV
0.69% LargeCap Blend Russell 3000, IWV
0.68% LargeCap 1000 R, IWB
0.68% Value S&P 500 B, IVE
0.68% Russia MV, RSX
0.67% Value SmallCap VIPERS, VBR
0.65% S&P 500 SPDRs LargeCap Blend, SPY
0.64% Growth S&P 500/BARRA, IVW
0.63% LargeCap Blend S&P 100, OEF
0.63% Microcap Russell, IWC
0.63% DIAMONDS (DJIA), DIA
0.63% LargeCap Blend S&P=Weight R, RSP
0.62% Growth VIPERs, VUG
0.62% Dividend High Yield Equity PS, PEY
0.61% Utilities VIPERs, VPU
0.61% Growth 1000 Russell, IWF
0.58% Value VIPERs, VTV
0.58% Dividend DJ Select, DVY
0.58% Value LargeCap Dynamic PS, PWV
0.57% Growth SmallCap VIPERs, VBK
0.54% Energy DJ, IYE
0.53% Growth BARRA Small Cap 600, IJT
0.53% MidCap S&P 400 SPDRs, MDY
0.51% MidCap Russell, IWR
0.51% Growth MidCap 400 B, IJK
0.51% Biotech SPDR, XBI
0.49% Value MidCap S&P 400 B, IJJ
0.49% MidCap S&P 400 iS, IJH
0.48% Dividend Appreciation Vipers, VIG
0.48% Growth MidCap Russell, IWP
0.47% Value MidCap Russell, IWS
0.47% Energy SPDR, XLE
0.42% Realty Cohen & Steers, ICF
0.39% Dividend SPDR, SDY
0.38% Energy VIPERs, VDE
0.34% Health Care SPDR, XLV
0.33% REIT VIPERs, VNQ
0.31% Real Estate US DJ, IYR
0.31% Taiwan Index, EWT
0.30% WilderHill Clean Energy PS, PBW
0.29% REIT Wilshire, RWR
0.27% Bond Muni ATM-Free S&P iS, MUB
0.18% Industrial SPDR, XLI
0.11% Bond, 20+ Years Treasury, TLT
0.10% Consumer Staples SPDR, XLP
0.06% United Kingdom Index, EWU
0.03% Energy Global, IXC
0.00% Telecom DJ US, IYZ
0.00% Bond Treasury Short-Term iS, SHV
0.00% Agriculture DB PS, DBA
-0.02% South Korea Index, EWY
-0.06% Water Resources, PHO
-0.07% Bond, 1-3 Year Treasury, SHY
-0.10% Bond Ex-US Treas, BWX
-0.10% Pacific VIPERs, VPL
-0.17% Global 100, IOO
-0.20% Bond, Aggregate, AGG
-0.20% Emerging Markets, EEM
-0.22% Germany Index, EWG
-0.24% Commodity Tracking, DBC
-0.26% Indonesia MV, IDX
-0.28% Transportation Av DJ, IYT
-0.29% Growth EAFE MSCI, EFG
-0.29% Bond, High-Yield Junk, JNK
-0.30% Bond, 10 Year Treasury, IEF
-0.33% Small Cap EAFE MSCI iS, SCZ
-0.34% Bond, TIPS, TIP
-0.36% Emerging VIPERs, VWO
-0.43% EAFE Index, EFA
-0.43% Bond EmrgMkt JPM iS, EMB
-0.44% Thailand MSCI iS, THD
-0.45% China 25 iS, FXI
-0.47% Energy & Nat Res iS GS, IGE
-0.51% European VIPERs, VGK
-0.55% Value EAFE MSCI, EFV
-0.60% Emerging 50 BLDRS, ADRE
-0.61% Bond, Corp, LQD
-0.63% Dividend International, PID
-0.65% Global ex US ACWI iS, ACWX
-0.65% China LargeCap Growth G D H USX PS, PGJ
-0.68% Materials SPDR, XLB
-0.77% Switzerland Index, EWL
-0.78% Hong Kong Index, EWH
-0.86% Bond, High-Yield Corporate, HYG
-0.87% Malaysia Index, EWM
-1.01% Basic Materials DJ US, IYM
-1.02% India PS, PIN
-1.02% Europe 350 S&P Index, IEV
-1.06% Singapore Index, EWS
-1.15% India Earnings WTree, EPI
-1.16% South Africa Index, EZA
-1.18% Mexico Index, EWW
-1.20% Metals & Mining SPDR, XME
-1.27% Pacific ex-Japan, EPP
-1.35% Latin Am 40, ILF
-1.41% Netherlands Index, EWN
-1.43% Belgium Index, EWK
-1.51% EMU Europe Index, EZU
-1.51% Australia Index, EWA
-1.58% Canada Index, EWC
-1.59% Spain Index, EWP
-1.61% Brazil Index, EWZ
-1.73% Preferred Stock iS, PFF
-1.76% Austria Index, EWO
-1.77% Frontier Markets Guggenheim , FRN
-2.07% Italy Index, EWI
-2.23% Gold Shares S.T., GLD
-2.25% France Index, EWQ
-2.34% Financial Preferred, PGF
-2.90% Chile MSCI iS, ECH
-3.06% Sweden Index, EWD
-3.41% Silver Trust iS, SLV
-4.01% Silver Miners Global X, SIL