Technical Indicators Appear Mixed

Consumer Discretionary and Utilities stock sectors showed strength again last week, continuing their bullish major trends.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) appears to be trending lower again in recent weeks…

while Small Caps and MidCaps are outperforming.

Copper rose further above 4-month highs on 9/3/10, again confirming an intermediate-term Secondary Uptrend.

U.S. Treasury Bond futures price broke down below previous 2-week lows on 9/3/10, which may be taken as a sign of a minor downside correction.

The U.S. dollar futures price fell below 3-week lows on 9/3/10, thereby confirming the short-term trend as bearish. The Secondary, intermediate-term trend appears uncertain–possibly bearish as well. Long term, USD may be consolidating losses since bottoming at 70.805 in March 2008.

S&P 500 Composite (SPX, 1,104.51) rose 14.41 points or 1.32% on Friday 9/3/10. Absolute price rose above its 50-day SMA on 9/2/10 but is only neutral below the 200-day SMA and with the 50-day SMA below the 200-day SMA. Technical indicators appear mixed, and 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
1.79% , NYC , LargeCap Blend NYSE Composite iS, NYC
0.81% , PSTL , Steel Global PS ETF, PSTL
1.76% , IYW , Technology DJ US, IYW
7.39% , MTG , MGIC INVESTMENT
1.43% , PXE , Energy Exploration & Prod, PXE
5.37% , GS , GOLDMAN SACHS
1.53% , DGT , Global Titans, DGT
1.64% , HHH , Internet H, HHH
1.07% , JKF , Value LargeCap iS M, JKF
1.39% , NY , Value LargeCap NYSE 100 iS, NY
4.52% , RHI , ROBERT HALF
1.64% , RFG , Growth MidCap S&P 400, RFG
0.77% , EFG , Growth EAFE MSCI, EFG
1.07% , IYE , Energy DJ, IYE
1.34% , IJJ , Value MidCap S&P 400 B, IJJ
1.55% , PIC , Insurance, PIC
3.82% , MS , MORGAN STANLEY
1.55% , IYJ , Industrial LargeCap Blend DJ US, IYJ
1.67% , EPU , Peru MSCI iS, EPU
1.48% , PTE , Telecommunications & Wireless, PTE
3.30% , MDP , MEREDITH
1.74% , DBA , Agriculture DB PS, DBA
3.17% , BK , BANK OF NEW YORK
1.86% , EWT , Taiwan Index, EWT
2.32% , HANS , Hansen Natural, HANS
0.97% , IYZ , Telecom DJ US, IYZ
1.64% , VBR , Value SmallCap VIPERS, VBR
3.31% , MET , METLIFE
3.47% , NTRS , NORTHERN TRUST
4.36% , DLX , DELUXE
1.43% , IJK , Growth MidCap 400 B, IJK
1.22% , IXC , Energy Global, IXC
1.51% , JKD , LargeCap Blend Core iS M, JKD
7.52% , OMX , OFFICEMAX INC., OMX
3.71% , WYNN , Wynn Resorts L
2.08% , PSI , Semiconductors, PSI
1.50% , MTK , Technology MS sT, MTK
4.36% , LNC , LINCOLN NATL
2.03% , FPX , IPOs, First Tr IPOX-100, FPX
4.25% , NYT , NY TIMES STK A

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-2.97% , CPB , CAMPBELL SOUP
-1.18% , DYN , DYNEGY
-1.34% , SH , Short 100% S&P 500, SH
-2.70% , MZZ , Short 200% MidCap 400 PS, MZZ
-1.23% , DOG , Short 100% Dow 30, DOG
-3.27% , QID , Short 200% QQQ PS, QID
-2.63% , SDS , Short 200% S&P 500 PS, SDS
-1.86% , DLTR , Dollar Tree Stores Inc
-1.63% , PSQ , Short 100% QQQ, PSQ
-1.44% , CHKP , Check Point Software Technologies Ltd
-2.28% , FDO , FAMILY DLR STRS
-2.41% , DXD , Short 200% Dow 30 PS, DXD
-0.73% , TLH , Bond 10-20 Year US Treas, TLH
-1.43% , MYY , Short 100% MidCap 400, MYY
-1.03% , FHN , FIRST TENNESSEE
-0.58% , RF , REGIONS FINAN
-0.90% , USO , Oil, Crude, U.S. Oil Fund, USO
-0.30% , EFX , EQUIFAX
-1.24% , TLT , Bond, 20+ Years Treasury, TLT
-0.30% , GIS , GENERAL MILLS
-0.60% , HNZ , HJ HEINZ
-0.35% , GLD , Gold Shares S.T., GLD
-0.51% , NOVL , NOVELL
-0.31% , GVI , Bond Interm U.S. Gov, GVI
-0.27% , EWZ , Brazil Index, EWZ
-0.41% , BCR , C R BARD
-0.16% , TIP , Bond, TIPS, TIP
-0.57% , IEF , Bond, 10 Year Treasury, IEF
-0.55% , BHI , BAKER HUGHES
-0.04% , EWM , Malaysia Index, EWM
-1.50% , PWER , POWER ONE
-0.05% , JNK , Bond, High-Yield Junk, JNK

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 9/3/10 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 another new 8-month high on 9/3/10 and remains bullish. Support 30.15, 29.66, 27.91, 27.44, and 25.76. Resistance 31.64 and 32.08.

Industrial (XLI) Neutral, Market Weight. The Relative Strength Ratio (XLI/SPY) rose further above rising 50-day and 200-day SMAs on 9/3/10 and remains bullish. 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.

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.

Consumer Staples (XLP) Neutral, Market Weight. The Relative Strength Ratio (XLP/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 27.46, 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 rose above its 50-day SMA on 9/3/10 but is only neutral 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.

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 rose above its 50-day SMA on 9/3/10 but is only neutral with the 50-day SMA below the 200-day SMA. Support 13.29 and 13.08. Resistance 15.09, 15.67, 16.13, 16.90, 17.12, 17.16, and 17.87.

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.

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.
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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 further above 5-week highs on 9/3/10 and remains 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 trending lower again in recent weeks, since 8/3/10. Big caps have been relatively 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 50 SMA on 9/3/10, thereby turning bullish. Significantly, the 50-day SMA is above the 200-day SMA. Long term, IWM/SPY has been bullish (trending upward) since 4/8/99.

The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose further above 5-week highs on 9/3/10 and remains 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 appears to be consolidating losses since its low of 8/25/10. 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 9/3/10, 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 broke down below previous 2-week lows on 9/3/10, which may be taken as a sign of a minor downside correction. The bond set its highest daily close in 19-months on 8/31/10, again confirming that the major trend remained bullish. Support 129.22, 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 3-week lows on 9/3/10, thereby confirming the short-term trend as bearish. The Secondary, intermediate-term trend appears uncertain–possibly bearish as well. 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 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

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

2.89% Capital Markets KWB ST, KCE
2.19% Financial Services DJ, IYG
2.17% Semiconductor SPDR, XSD
2.10% Financial SPDR, XLF
2.03% Financial DJ US, IYF
2.02% Financials VIPERs, VFH
2.00% WilderHill Clean Energy PS, PBW
1.94% Networking, IGN
1.92% Semiconductor iS GS, IGW
1.86% Taiwan Index, EWT
1.82% Value SmallCap Russell 2000, IWN
1.81% Value SmallCap S&P 600, RZV
1.79% SmallCap Russell 2000, IWM
1.78% Value SmallCap S&P 600 B, IJS
1.76% Technology DJ US, IYW
1.74% Agriculture DB PS, DBA
1.73% Growth SmallCap VIPERs, VBK
1.72% SmallCap S&P 600, IJR
1.71% Growth SmallCap R 2000, IWO
1.69% Microcap Russell, IWC
1.66% Info Tech VIPERs, VGT
1.66% Growth LargeCap NASDAQ 100, QQQQ
1.64% Value SmallCap VIPERS, VBR
1.62% Small Cap VIPERs, VB
1.60% Indonesia MV, IDX
1.58% Growth BARRA Small Cap 600, IJT
1.55% Water Resources, PHO
1.52% Industrial SPDR, XLI
1.49% Technology SPDR, XLK
1.48% Consumer Discretionary SPDR, XLY
1.47% Realty Cohen & Steers, ICF
1.46% REIT VIPERs, VNQ
1.44% MidCap S&P 400 iS, IJH
1.43% Growth MidCap 400 B, IJK
1.43% Growth VIPERs, VUG
1.43% Dividend International, PID
1.42% United Kingdom Index, EWU
1.41% LargeCap Blend S&P=Weight R, RSP
1.40% REIT Wilshire, RWR
1.38% Canada Index, EWC
1.37% Growth S&P 500/BARRA, IVW
1.36% LargeCap VIPERs, VV
1.36% MidCap S&P 400 SPDRs, MDY
1.36% Growth 1000 Russell, IWF
1.35% France Index, EWQ
1.35% Growth MidCap Russell, IWP
1.34% Value MidCap S&P 400 B, IJJ
1.34% Thailand MSCI iS, THD
1.34% MidCap Russell, IWR
1.33% Value 1000 Russell, IWD
1.33% Blend Total Market VIPERs, VTI
1.32% Homebuilders SPDR, XHB
1.32% LargeCap Blend Russell 3000, IWV
1.31% LargeCap Blend S&P 100, OEF
1.31% Real Estate US DJ, IYR
1.31% Value MidCap Russell, IWS
1.31% LargeCap 1000 R, IWB
1.30% S&P 500 iS LargeCap Blend, IVV
1.30% S&P 500 SPDRs LargeCap Blend, SPY
1.29% Value VIPERs, VTV
1.27% Value S&P 500 B, IVE
1.26% DIAMONDS (DJIA), DIA
1.25% Dividend High Yield Equity PS, PEY
1.24% Germany Index, EWG
1.22% Energy Global, IXC
1.21% Energy SPDR, XLE
1.20% Value LargeCap Dynamic PS, PWV
1.19% Basic Materials DJ US, IYM
1.18% EMU Europe Index, EZU
1.18% Emerging Markets, EEM
1.18% Italy Index, EWI
1.17% Materials SPDR, XLB
1.13% Biotech SPDR, XBI
1.12% Transportation Av DJ, IYT
1.11% Emerging VIPERs, VWO
1.09% Global 100, IOO
1.08% Metals & Mining SPDR, XME
1.08% Global ex US ACWI iS, ACWX
1.07% Energy DJ, IYE
1.06% Small Cap EAFE MSCI iS, SCZ
1.06% Natural Resource iS GS, IGE
1.06% Dividend DJ Select, DVY
1.05% European VIPERs, VGK
1.03% Dividend SPDR, SDY
0.99% South Africa Index, EZA
0.98% Europe 350 S&P Index, IEV
0.98% Mexico Index, EWW
0.98% Energy VIPERs, VDE
0.97% Dividend Appreciation Vipers, VIG
0.97% Telecom DJ US, IYZ
0.96% Netherlands Index, EWN
0.96% Russia MV, RSX
0.93% Health Care SPDR, XLV
0.93% India PS, PIN
0.93% Value EAFE MSCI, EFV
0.92% EAFE Index, EFA
0.92% Emerging 50 BLDRS, ADRE
0.90% Turkey MSCI iS, TUR
0.87% South Korea Index, EWY
0.83% Pacific VIPERs, VPL
0.82% China LargeCap Growth G D H USX PS, PGJ
0.77% Growth EAFE MSCI, EFG
0.76% Australia Index, EWA
0.73% Japan Index, EWJ
0.73% Silver Trust iS, SLV
0.72% Spain Index, EWP
0.67% Austria Index, EWO
0.63% Chile MSCI iS, ECH
0.63% Consumer Staples SPDR, XLP
0.62% Utilities VIPERs, VPU
0.59% China 25 iS, FXI
0.57% Belgium Index, EWK
0.56% Pacific ex-Japan, EPP
0.55% Latin Am 40, ILF
0.53% Commodity Tracking, DBC
0.50% India Earnings WTree, EPI
0.48% Singapore Index, EWS
0.44% Utilities SPDR, XLU
0.38% Switzerland Index, EWL
0.31% Sweden Index, EWD
0.30% Bond, High-Yield Corporate, HYG
0.28% Preferred Stock iS, PFF
0.12% Hong Kong Index, EWH
0.11% Financial Preferred, PGF
0.10% Bond EmrgMkt JPM iS, EMB
-0.04% Malaysia Index, EWM
-0.05% Bond, 1-3 Year Treasury, SHY
-0.05% Bond Ex-US Treas, BWX
-0.16% Bond, TIPS, TIP
-0.23% Bond, Aggregate, AGG
-0.23% Bond Muni ATM-Free S&P iS, MUB
-0.27% Brazil Index, EWZ
-0.35% Gold Shares S.T., GLD
-0.57% Bond, 10 Year Treasury, IEF
-0.75% Bond, Corp, LQD
-0.90% Oil, Crude, U.S. Oil Fund, USO
-1.24% Bond, 20+ Years Treasury, TLT

Technical Indicators Appear Mixed

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