The Stock Market Remains Overbought For the Short Term

The S&P 500 Composite (SPX, 1,238.25) rose 22.86 points or 1.88% on Friday, October 21, 2011.

Sensitive price momentum indicators have not been confirming price for several days. There remains a bearish price momentum divergence for the very short term. This divergence could lead to a deeper price pullback in days ahead.

The Dow Theory signaled nothing more than an upward Ripple on 10/21/11, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 11 weeks. Ripples are the very minor day-to-day fluctuations that are of concern only to short-term traders and not at all to Dow Theorists. Ripples can last from a day to several weeks, although most last 2 weeks or less. This one has lasted 14 trading days, which is less than 3 weeks.

Much more significantly, the Dow Theory signaled a Primary Tide Bear Market on 8/2/11, when both Averages closed below their closing price lows of the previous 11 months. This Bear Market was confirmed on 10/3/11 by lower closing price lows for both Averages.

A Dow Theory Primary Tide Bear Market is a powerful beast that must not be underestimated. The median Dow Theory Primary Tide Bear Market in history lasts 16 months and takes stock prices down 34%.
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Includes Top Ten ETFs, Major Trend Relative Strength Rankings, charts, support and resistance levels, and much more.

The S&P 500 Composite (SPX: 1,238.25) 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
1307.28, Fibonacci 78.6% of 2011 range
1258.07, low of 6/16/11
1257.58, Fibonacci 61.8% of 2011 range
1249.05, low of 3/16/11
1246.73, high of 12/13/10
1238.81, Fibonacci 78.6% of 1,576.09 high

S&P 500 Composite (SPX: 1,238.25) Potential Support
1222.68, Fibonacci 50% of 2011 range
1204.49, Fibonacci 23.6% of 2009-11 range
1190.58, low of 10/13/2011
1187.77, Fibonacci 38.2% of 2011 range
1144.38, Fibonacci 23.6% of 2011 range
1101.73, Fibonacci 38.2% of 2009-11 range
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
1018.69, Fibonacci 50% of 2009-11 range
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
935.64, Fibonacci 61.8% of 2009-11 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
817.40, Fibonacci 78.6% of 2009-11 range
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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Tangible Assets, Commodities

U.S. dollar ETF (UUP) price fell below the lows of the previous 5 weeks and below its 50-day SMA on 10/21/11, suggesting the possibility of a deeper downside short-term correction. Support 21.42 and 20.84. Resistance 21.91 and 22.63.

Agriculture, PowerShares DB Agriculture Fund ETF (DBA) price reversed to the downside on 10/21/11, possibly resuming its major price downtrend. DBA fell below the lows of the previous 10 months on 10/3/11, which reconfirmed a major long-term downtrend.

Crude Oil, United States Oil ETF (USO) price stalled out in recent days following an 11-day bounce. USO has lost minor upside momentum and could soon resume its major price downtrend. Support 32.52, 29.10, 26.28, and 22.74. Resistance 34.63, 35.08, 35.14, 39.25, 40.74, and 45.60.

Gold, SPDR Gold Shares ETF (GLD) price broke down below the lows of the previous 2 weeks, thereby confirming the bearish short-term trend. The medium-term trend still appears doubtful. Support: 154.19, 153.61, 147.19, 143.97, 143.42, and 142.55. Resistance: 164.00, 165.72, 170.32, 177.40, and 185.85.

Gold Mining Stocks ETF/ Gold Shares ETF Relative Strength Ratio (GDX/GLD) broke sharply lower on 10/19/11. 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 consolidated losses over the past 3 weeks. SLV price broke down below the lows of the previous 7 months on 9/26/11, which confirmed 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: 31.96, 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) price broke down below the lows of the previous 14 months on 10/5/11, confirming a bearish major trend for the long term. Major trend 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
20.55% , HAR , Harman International
2.73% , PMR , Retail, PMR
3.45% , EWK , Belgium Index, EWK
3.31% , BBH , Biotech H, BBH
1.97% , MTK , Technology MS sT, MTK
7.86% , FLEX , Flextronics International Ltd
2.55% , FPX , IPOs, First Tr IPOX-100, FPX
2.66% , ADRU , Europe 100 BLDRS, ADRU
6.45% , EK , EASTMAN KODAK
2.55% , PXE , Energy Exploration & Prod, PXE
7.05% , BIIB , BIOGEN IDEC
2.36% , PEJ , Leisure & Entertainment, PEJ
6.93% , GT , GOODYEAR TIRE
1.95% , IXJ , Healthcare Global, IXJ
12.17% , ALTR , ALTERA
5.91% , URBN , Urban Outfitters Inc.
2.36% , IJJ , Value MidCap S&P 400 B, IJJ
2.60% , IXG , Financials Global LargeCap Value, IXG
5.14% , CB , CHUBB
1.52% , IXP , Telecommunications Global, IXP
2.36% , SDY , Dividend SPDR, SDY
6.92% , COF , CAPITAL ONE FNCL
2.23% , VO , MidCap VIPERs, VO
1.76% , FHN , First Horizon National
6.64% , HOG , HARLEY DAVIDSON
2.95% , EWH , Hong Kong Index, EWH
2.13% , SOXX , Semiconductor iS IGW, SOXX
5.58% , ODP , OFFICE DEPOT
2.23% , IYC , Consumer Cyclical DJ, IYC
5.17% , SNI , Scripps Networks Interactive
4.88% , TLAB , TELLABS
1.44% , XLG , LargeCap Rydex Rus Top 50, XLG
2.33% , PBJ , Food & Beverage, PBJ

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-5.74% , MTG , MGIC INVESTMENT
-3.33% , STI , SUNTRUST BANKS
-5.43% , PWER , POWER ONE
-6.06% , LVLT , LEVEL 3 COMMUNICATIONS
-3.28% , CPWR , COMPUWARE
-1.92% , GE , GENERAL ELECTRIC
-2.81% , HAL , HALLIBURTON
-2.33% , MU.O , MICRON TECH
-1.57% , DOV , DOVER
-0.90% , SLB , SCHLUMBERGER
-1.40% , LLY , ELI LILLY
-0.41% , APD , AIR PRODS & CHEM
-2.03% , MYY , Short 100% MidCap 400, MYY
-1.06% , TLT , Bond, 20+ Years Treasury, TLT
-1.69% , KWT , Solar Energy MV, KWT
-0.18% , IEF , Bond, 10 Year Treasury, IEF
-2.53% , LUV , SOUTHWEST AIRLS
-0.62% , AAPL , APPLE COMPUTER
-0.24% , GVI , Bond Interm U.S. Gov, GVI
-0.26% , DLTR , Dollar Tree Stores Inc
-0.05% , ZEUS , Olympic Steel, ZEUS
-0.07% , DBA , Agriculture DB PS, DBA
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One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
4.19% Germany Index, EWG
4.12% Thailand MSCI iS, THD
4.09% Russia MV, RSX
4.06% Homebuilders SPDR, XHB
3.58% EMU Europe Index, EZU
3.45% Belgium Index, EWK
3.43% South Africa Index, EZA
3.41% Realty Cohen & Steers, ICF
3.38% Sweden Index, EWD
3.36% REIT Wilshire, RWR
3.35% European VIPERs, VGK
3.30% REIT VIPERs, VNQ
3.16% Europe 350 S&P Index, IEV
3.01% Turkey MSCI iS, TUR
3.01% Basic Materials DJ US, IYM
3.00% Metals & Mining SPDR, XME
2.96% France Index, EWQ
2.95% Real Estate US DJ, IYR
2.95% Hong Kong Index, EWH
2.92% Italy Index, EWI
2.85% Emerging Markets, EEM
2.78% Spain Index, EWP
2.78% Emerging VIPERs, VWO
2.77% Netherlands Index, EWN
2.77% Consumer Discretionary SPDR, XLY
2.76% Switzerland Index, EWL
2.73% China 25 iS, FXI
2.71% Austria Index, EWO
2.69% Value EAFE MSCI, EFV
2.65% Materials SPDR, XLB
2.59% South Korea Index, EWY
2.58% Financial SPDR, XLF
2.56% Chile MSCI iS, ECH
2.56% Latin Am 40, ILF
2.52% Silver Trust iS, SLV
2.50% Indonesia MV, IDX
2.45% Growth EAFE MSCI, EFG
2.42% Financial DJ US, IYF
2.42% EAFE Index, EFA
2.41% LargeCap Blend S&P=Weight R, RSP
2.38% Financials VIPERs, VFH
2.36% Water Resources, PHO
2.36% Dividend SPDR, SDY
2.36% Value MidCap S&P 400 B, IJJ
2.35% Global ex US ACWI iS, ACWX
2.35% Energy Global, IXC
2.35% United Kingdom Index, EWU
2.32% Pacific ex-Japan, EPP
2.29% Emerging 50 BLDRS, ADRE
2.27% Value SmallCap Russell 2000, IWN
2.27% Value SmallCap S&P 600 B, IJS
2.27% Growth MidCap Russell, IWP
2.24% SmallCap S&P 600, IJR
2.24% Brazil Index, EWZ
2.22% Dividend Appreciation Vipers, VIG
2.21% Value SmallCap VIPERS, VBR
2.20% Semiconductor SPDR, XSD
2.19% DIAMONDS (DJIA), DIA
2.18% Growth BARRA Small Cap 600, IJT
2.17% Value MidCap Russell, IWS
2.17% SmallCap Russell 2000, IWM
2.17% Transportation Av DJ, IYT
2.13% Semiconductor iS IGW, SOXX
2.13% Australia Index, EWA
2.11% Growth SmallCap VIPERs, VBK
2.11% MidCap S&P 400 SPDRs, MDY
2.10% MidCap Russell, IWR
2.10% Growth SmallCap R 2000, IWO
2.09% MidCap S&P 400 iS, IJH
2.07% Global 100, IOO
2.06% Growth MidCap 400 B, IJK
2.03% Energy & Nat Res iS GS, IGE
2.02% Growth VIPERs, VUG
2.02% Financial Services DJ, IYG
2.01% Capital Markets KWB ST, KCE
2.00% Health Care SPDR, XLV
2.00% Small Cap VIPERs, VB
1.96% Dividend International, PID
1.94% Value S&P 500 B, IVE
1.94% Value 1000 Russell, IWD
1.93% Industrial SPDR, XLI
1.93% LargeCap VIPERs, VV
1.90% S&P 500 SPDRs LargeCap Blend, SPY
1.89% Energy DJ, IYE
1.89% Biotech SPDR, XBI
1.88% Blend Total Market VIPERs, VTI
1.88% LargeCap Blend Russell 3000, IWV
1.88% Microcap Russell, IWC
1.87% Energy VIPERs, VDE
1.86% Small Cap EAFE MSCI iS, SCZ
1.84% Energy SPDR, XLE
1.83% S&P 500 iS LargeCap Blend, IVV
1.83% Canada Index, EWC
1.83% Dividend DJ Select, DVY
1.83% Value VIPERs, VTV
1.82% Taiwan Index, EWT
1.78% China LargeCap Growth G D H USX PS, PGJ
1.77% India PS, PIN
1.75% LargeCap 1000 R, IWB
1.75% Growth 1000 Russell, IWF
1.74% Growth S&P 500/BARRA, IVW
1.74% Value LargeCap Dynamic PS, PWV
1.71% Utilities VIPERs, VPU
1.69% Utilities SPDR, XLU
1.61% Consumer Staples SPDR, XLP
1.60% LargeCap Blend S&P 100, OEF
1.58% Silver Miners Global X, SIL
1.58% Mexico Index, EWW
1.56% Oil, Crude, U.S. Oil Fund, USO
1.55% India Earnings WTree, EPI
1.46% Frontier Markets Guggenheim , FRN
1.43% Pacific VIPERs, VPL
1.41% Info Tech VIPERs, VGT
1.38% Singapore Index, EWS
1.38% Dividend High Yield Equity PS, PEY
1.38% Telecom DJ US, IYZ
1.27% Technology SPDR, XLK
1.27% Bond, High-Yield Junk, JNK
1.25% QQQ Nasdaq 100 Trust, QQQ
1.21% Bond, High-Yield Corporate, HYG
1.16% Oil Fund PowerShares, DBO
1.11% Gold Shares S.T., GLD
1.07% Technology DJ US, IYW
1.05% Japan Index, EWJ
0.92% Networking, IGN
0.83% Malaysia Index, EWM
0.82% Preferred Stock iS, PFF
0.63% Bond Ex-US Treas, BWX
0.61% Financial Preferred, PGF
0.52% Commodity Tracking, DBC
0.33% Bond, Corp, LQD
0.26% Bond Muni ATM-Free S&P iS, MUB
0.18% WilderHill Clean Energy PS, PBW
0.10% Bond EmrgMkt JPM iS, EMB
0.05% Bond, Aggregate, AGG
0.02% Bond Treasury Short-Term iS, SHV
-0.04% Bond, 1-3 Year Treasury, SHY
-0.07% Agriculture DB PS, DBA
-0.10% Bond, TIPS, TIP
-0.18% Bond, 10 Year Treasury, IEF
-1.06% Bond, 20+ Years Treasury, TLT