The S&P 500 Composite (SPX, 1,164.97 ) rose 20.94 points or 1.83% on Thursday, October 6, 2011. SPX closed above the highs of the previous 4 trading days, confirming a minor bounce.

SPX remains bearishly below falling 50-day and 200-day simple moving averages (SMAs), as it has consistently over the past 2 months.

NYSE volume fell 5% below Wednesday’s relatively moderate pace of trading activity. Declining volume denies confirmation of the significance of rally attempts.

Over the past 3 trading days, the stock market has recovered a normal fraction of recent losses. Over the past 2 months, there have been 9 previous bounces lasting 1 to 5 trading days. Minor bounces are entirely normal and expected, but they also are fickle and fleeting. This 3-day stock price recovery appears to be a typical minor bounce of no real importance, except to very short-term traders.

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 Bear Market was confirmed on 10/3/11 by lower lows for both Averages. A Dow Theory Primary Tide Bear Market is a powerful beast that must not be underestimated.
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Stock Market Indicators

NASDAQ Composite/S&P 500 Relative Strength Ratio fell below the lows of the previous 4 weeks on 10/3/11, confirming a minor downside correction. The Ratio rose above previous 10-year highs on 9/23/11, reconfirming a long-term uptrend. A long NASDAQ Composite and short S&P 500 hedge was a winning trade from 10/8/2002 to 9/23/11, and that major trend probably will resume in time. NASDAQ absolute price remains bearish, falling below 52-week price lows and falling further below falling 50-day and 200-day SMAs on 10/4/11.

iShares MSCI BRIC Fund (BKF) Relative Strength Ratio (BKF/SPY) fell below 31-month lows on 10/4/11, reconfirming a major long-term downtrend. This basket of the stocks of Brazil, Russia, India and China is in a relatively bearish major trend.

Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) broke down below 29-month lows on 9/22/11, reconfirming its preexisting bearish major trend. Absolute price broke down below 2-year lows on 10/4/11 and remains bearishly below falling 50- and 200-day SMAs.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) broke down below 7-year lows on 9/19/11, reconfirming its preexisting bearish major trend. Absolute price broke down below 2-year lows on 10/4/11 and remains bearishly below falling 50- and 200-day SMAs.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) OEX/SPX rose above 50-day and 200-day SMAs on 9/21/11, which was a RELATIVELY bullish sign. Absolute price of OEX remains bearish.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below 20-month lows on 10/3/11, reconfirming a major downtrend. Absolute price has been weak since 5/2/11, broke down below 13-month lows on 10/4/11, and remains bearishly below falling 50- and 200-day SMAs.

The S&P Mid Cap 400/Large Cap Relative Strength Ratio (MDY/SPY) fell below the lows of the previous 18-months on 10/3/11, reconfirming a bearish long-term major trend. MDY/SPY fell below the lows of the previous 13-months on 10/4/11, reconfirming a bearish long-term major trend.

Advisory Service Sentiment: There were 34.4% Bulls versus 45.2% Bears as of 10/5/11, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear Ratio was 0.76, which is the lowest level since the big bear market of 2007- 2009. The Bull/Bear Ratio is now more 1 standard deviation below the 20-year average. It was more than 2 standard deviations above the 20-year average at the end of April, 2011. The 20-year median is 1.56 and the mean is 1.64. Sentiment is not so easy to interpret. Contrary to what many contrarians seem to believe, when advisors turn this cautious, stocks sometimes have much further to fall. Examples include similar levels of bearish sentiment in April 1973 and in July 2008, after which stock prices fell much further.

VIX Fear Index remains stuck in its 7-week, relatively high level trading range, from a low of 30.16 to a high of 48.00. 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 Bear Market was confirmed on 10/3/11 by lower lows for both Dow-Jones Industrial and Transportation Averages.

The S&P 500 Composite (SPX, 1,164.97) rose 20.94 points or 1.83% on Thursday, October 6, 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
1074.77, low of 10/4/2011
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) rose above all-time highs on 10/4/11, reconfirming a long-term, major uptrend. Support 115.76, 114.05, 111.25, 106.08, 103.20, 102.27, 96.31, 94.83, 93.14, 89.65, and 88.14. Resistance 125.03.

Bond, iShares Barclays 7-10 Year U.S. Treasury ETF (IEF) pulled back, consolidating short term. IEF rose above all-time highs on 9/22/11, reconfirming its long-term, preexisting major uptrend. Support 103.80, 103.55, 102.50, and 102.38. Resistance 106.66.

Junk/Investment-Grade Corporate Bond ETFs Relative Strength Ratio (JNK/LQD) fell below 29-month lows on 10/3/11, reconfirming a bearish long-term major trend.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio (TIP/IEF) fell below 13-month lows on 10/3/11, reconfirming a bearish long-term major trend. This means that fixed-income investors have been choosing the unprotected 7-10 Year U.S. Treasury Note ETF (IEF) over the inflation-protected TIPs. So, fixed-income investors may be more worried about deflation than inflation.
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Tangible Assets, Commodities

U.S. dollar ETF (UUP) price pulled back moderately after rising above the highs of the previous 8 months on 10/4/11 and thereby reconfirming a major price uptrend. After the collapse of gold and the Swiss Franc, the U.S. dollar may be the last refuge for risk-averse investors. Support 22.13, 21.94, 21.75, 21.56, 21.42, and 20.84. Resistance 22.63.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price fell below the lows of the previous 10 months on 10/3/11, reconfirming a major long-term downtrend.

Crude Oil, United States Oil ETF (USO) price broke down below 17-month lows on 10/4/11, reconfirming a major long-term downtrend. Support 28.10, 26.28, and 22.74. Resistance 32.83, 32.91, 35.08, 35.14, 39.25, 40.74, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) price broke down below 9-week lows on 9/26/11,confirming a downtrend, for the short term at least. Gold rose above all-time highs on 9/6/11, reconfirming its preexisting major uptrend. Support: 154.19, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: 162.29, 170.32, 177.40, and 185.85.

Gold Mining Stocks ETF/ Gold Shares ETF Relative Strength Ratio (GDX/GLD) remains bearishly below its falling 50-day and 200-day SMAs. GDX/GLD fell below 29-month lows on 8/8/11, reconfirming a bearish major trend for the long term. Investors still prefer Gold bullion over Gold Miners.

Silver, iShares Silver Trust ETF (SLV) price broke down below the lows of the previous 7 months on 9/26/11, confirming a bearish major trend for the long term. SLV fell back below its 50-day SMA on 9/19/11 and fell below its 200-day SMA on 9/22/11. Support 27.41, 26.03, and 24.44. Resistance: 32.62, 34.51, 40.23, 41.49, 42.30, 42.78, 44.71 and 48.35.

Silver/Gold ETFs Ratio (SLV/GLD) broke down below the lows of the previous 11 months on 9/30/11, reconfirming a bearish major trend for the long term. 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-Index ETN (JJC) fell below the lows of the previous 14 months on 10/5/11, reconfirming a bearish major trend for the long term. Such weakness in Copper suggests serious concerns about the economic outlook.
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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
3.11% , EWN , Netherlands Index, EWN
1.96% , FDV , Value 40 Large Low P/E FT DB, FDV
11.35% , ESRX , EXPRESS SCRIPTS
2.66% , JKG , MidCap Blend Core iS M, JKG
12.69% , NYT , NY TIMES STK A
6.48% , SIL , Silver Miners Global X, SIL
1.87% , IXN , Technology Global, IXN
2.17% , RPV , Value S&P 500, RPV
3.87% , PCG , PG&E
3.55% , EWI , Italy Index, EWI
2.78% , MTK , Technology MS sT, MTK
10.54% , WYNN , Wynn Resorts L
2.26% , PWB , Lg Cap Growth PSD, PWB
18.85% , EK , EASTMAN KODAK
2.93% , FRN , Frontier Markets Guggenheim , FRN
7.55% , KEY , KEYCORP
1.82% , IDU , Utilities DJ, IDU
1.81% , ISI , LargeCap Blend S&P 1500 iS, ISI
7.14% , GLW , CORNING
4.78% , SWH , Software H, SWH
2.16% , IWW , Value LargeCap Russell 3000, IWW
2.35% , VBR , Value SmallCap VIPERS, VBR
9.54% , PWER , POWER ONE
4.32% , TGT , TARGET
7.85% , ERIC.O , LM Ericsson Telephone Company
5.84% , HBAN , HUNTINGTON
1.65% , PIV , Value Line Timeliness MidCap Gr, PIV
2.47% , RWR , REIT Wilshire, RWR
5.70% , KWT , Solar Energy MV, KWT
2.73% , JKJ , SmallCap Core iS M, JKJ
4.19% , BBT , BB&T
7.37% , ZION , ZIONS
2.56% , JKI , Value MidCap iS M, JKI

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-1.05% , TLH , Bond 10-20 Year US Treas, TLH
-3.18% , DYN , DYNEGY
-3.32% , DXD , Short 200% Dow 30 PS, DXD
-1.16% , CAH , CARDINAL HEALTH
-2.40% , PTEN , Patterson-UTI Energy Inc
-0.48% , GVI , Bond Interm U.S. Gov, GVI
-1.40% , TJX , TJX
-0.65% , LNCR , Lincare Holdings Inc
-0.88% , BSX , BOSTON SCIENT
-1.05% , ECL , ECOLAB
-0.57% , CTXS , CITRIX SYSTEMS
-0.77% , ABC , AMERISOURCEBERGN
-0.26% , MCK , MCKESSON CORP
-0.28% , HSIC , Henry Schein Inc
-0.17% , KLAC , KLA TENCOR
-0.70% , IEF , Bond, 10 Year Treasury, IEF
-0.33% , MMC , MARSH & MCLENNAN
-0.31% , MUB , Bond Muni ATM-Free S&P iS, MUB
-1.31% , HP , Helmerich & Payne HP
-0.62% , BCR , C R BARD
-1.53% , PSQ , Short 100% QQQ, PSQ
-0.21% , KO , COCA COLA
-0.03% , FAST , Fastenal Company
-0.01% , TIP , Bond, TIPS, TIP
-0.23% , AAPL , APPLE COMPUTER
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
6.48% Silver Miners Global X, SIL
5.87% Chile MSCI iS, ECH
5.45% Russia MV, RSX
5.41% Thailand MSCI iS, THD
5.19% Silver Trust iS, SLV
4.99% Brazil Index, EWZ
4.92% Indonesia MV, IDX
4.36% Australia Index, EWA
3.91% Germany Index, EWG
3.85% Financial Services DJ, IYG
3.76% Pacific ex-Japan, EPP
3.74% France Index, EWQ
3.73% Sweden Index, EWD
3.71% China LargeCap Growth G D H USX PS, PGJ
3.70% Oil, Crude, U.S. Oil Fund, USO
3.68% Latin Am 40, ILF
3.66% EMU Europe Index, EZU
3.55% Italy Index, EWI
3.41% United Kingdom Index, EWU
3.39% Europe 350 S&P Index, IEV
3.34% Emerging VIPERs, VWO
3.31% Oil Fund PowerShares, DBO
3.31% Emerging Markets, EEM
3.27% WilderHill Clean Energy PS, PBW
3.21% Financial DJ US, IYF
3.16% European VIPERs, VGK
3.16% Financials VIPERs, VFH
3.12% South Korea Index, EWY
3.11% Financial SPDR, XLF
3.11% Netherlands Index, EWN
3.03% Canada Index, EWC
3.00% Financial Preferred, PGF
2.93% Spain Index, EWP
2.93% Homebuilders SPDR, XHB
2.93% Frontier Markets Guggenheim , FRN
2.90% Emerging 50 BLDRS, ADRE
2.87% Hong Kong Index, EWH
2.81% Global ex US ACWI iS, ACWX
2.80% Growth EAFE MSCI, EFG
2.79% Austria Index, EWO
2.77% Biotech SPDR, XBI
2.76% Real Estate US DJ, IYR
2.76% Realty Cohen & Steers, ICF
2.74% REIT VIPERs, VNQ
2.73% Networking, IGN
2.71% Small Cap EAFE MSCI iS, SCZ
2.70% Switzerland Index, EWL
2.69% EAFE Index, EFA
2.65% Growth SmallCap VIPERs, VBK
2.57% Capital Markets KWB ST, KCE
2.55% Growth BARRA Small Cap 600, IJT
2.55% Value MidCap S&P 400 B, IJJ
2.54% Value EAFE MSCI, EFV
2.54% Energy & Nat Res iS GS, IGE
2.53% Materials SPDR, XLB
2.51% Small Cap VIPERs, VB
2.50% MidCap S&P 400 iS, IJH
2.50% South Africa Index, EZA
2.47% Growth MidCap 400 B, IJK
2.47% REIT Wilshire, RWR
2.46% Growth MidCap Russell, IWP
2.40% MidCap S&P 400 SPDRs, MDY
2.39% MidCap Russell, IWR
2.39% Growth SmallCap R 2000, IWO
2.38% Mexico Index, EWW
2.37% Value MidCap Russell, IWS
2.35% Value SmallCap VIPERS, VBR
2.33% Consumer Discretionary SPDR, XLY
2.33% Water Resources, PHO
2.33% Global 100, IOO
2.31% LargeCap Blend S&P=Weight R, RSP
2.27% Energy Global, IXC
2.26% Metals & Mining SPDR, XME
2.22% SmallCap Russell 2000, IWM
2.20% SmallCap S&P 600, IJR
2.19% Basic Materials DJ US, IYM
2.16% Value SmallCap S&P 600 B, IJS
2.15% Value SmallCap Russell 2000, IWN
2.09% Dividend International, PID
2.09% Belgium Index, EWK
2.08% Commodity Tracking, DBC
2.05% Transportation Av DJ, IYT
2.01% Industrial SPDR, XLI
1.99% Value 1000 Russell, IWD
1.99% Growth VIPERs, VUG
1.95% LargeCap VIPERs, VV
1.94% Blend Total Market VIPERs, VTI
1.93% Dividend High Yield Equity PS, PEY
1.93% Singapore Index, EWS
1.93% LargeCap 1000 R, IWB
1.90% Taiwan Index, EWT
1.90% LargeCap Blend Russell 3000, IWV
1.88% Energy SPDR, XLE
1.88% Value VIPERs, VTV
1.87% Preferred Stock iS, PFF
1.86% Value S&P 500 B, IVE
1.86% Pacific VIPERs, VPL
1.86% Growth 1000 Russell, IWF
1.85% Energy VIPERs, VDE
1.84% Info Tech VIPERs, VGT
1.83% S&P 500 iS LargeCap Blend, IVV
1.82% India Earnings WTree, EPI
1.81% S&P 500 SPDRs LargeCap Blend, SPY
1.80% India PS, PIN
1.78% Energy DJ, IYE
1.77% Utilities SPDR, XLU
1.77% Growth S&P 500/BARRA, IVW
1.74% Technology DJ US, IYW
1.69% Microcap Russell, IWC
1.68% QQQ Nasdaq 100 Trust, QQQ
1.68% LargeCap Blend S&P 100, OEF
1.66% Bond, High-Yield Junk, JNK
1.66% DIAMONDS (DJIA), DIA
1.65% Semiconductor SPDR, XSD
1.64% Dividend DJ Select, DVY
1.62% Utilities VIPERs, VPU
1.60% Malaysia Index, EWM
1.55% Bond, High-Yield Corporate, HYG
1.50% Technology SPDR, XLK
1.50% Value LargeCap Dynamic PS, PWV
1.47% Dividend SPDR, SDY
1.42% China 25 iS, FXI
1.34% Dividend Appreciation Vipers, VIG
1.22% Semiconductor iS IGW, SOXX
1.20% Health Care SPDR, XLV
1.19% Bond EmrgMkt JPM iS, EMB
1.19% Telecom DJ US, IYZ
1.18% Consumer Staples SPDR, XLP
0.65% Gold Shares S.T., GLD
0.61% Turkey MSCI iS, TUR
0.48% Japan Index, EWJ
0.34% Bond Ex-US Treas, BWX
0.33% Agriculture DB PS, DBA
0.00% Bond Treasury Short-Term iS, SHV
-0.01% Bond, TIPS, TIP
-0.02% Bond, 1-3 Year Treasury, SHY
-0.16% Bond, Aggregate, AGG
-0.31% Bond Muni ATM-Free S&P iS, MUB
-0.40% Bond, Corp, LQD
-0.70% Bond, 10 Year Treasury, IEF
-1.85% Bond, 20+ Years Treasury, TLT