Technology Stock Sector Relative Strength Ratio (XLK/SPY) rose above 4-month highs on 6/4/10, while absolute price of XLK held above its May low.

Materials Stock Sector Relative Strength Ratio (XLB/SPY) fell below 14-month lows on 6/4/10 and remains bearish.

Growth Stock/Value Stock Relative Strength Ratio (IWF/IWD) rose above 3-month highs on 6/4/10.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below its 50-day SMA on 6/4/10 and so turned neutral.

NASDAQ 100/S&P 500 Relative Strength Ratio rose above 9-year highs on 6/4/10 and remains bullish.

S&P 500 Composite (SPX) tested recent lows and held them. SPX is in a deeply oversold position and at previous support, suggesting that bargain-hunting demand could appear again roughly where it has before, technically speaking.

The VIX Fear Index recently has been stuck in the mid 30s after rising to a 14-month high of 48.20 on 5/21/10. This might suggest some kind of divergence compared to price indexes, which are nearer their extreme lows of the year.

Clearly, excessive bullish sentiment has been wrung out of the stock market. This is a major change from last month. On 4/26/10, I wrote: “Investors Intelligence survey of stock market newsletter advisors, Call/Put Volume Ratios, and implied option volatility have shown bullish complacency in recent weeks. Excessive bullish sentiment sometimes precedes a shakeout to the downside.” We got that shakeout, and now it appears to be over.

Copper nearest futures price broke down to a new 7-month low on 6/4/10. Copper’s downtrend reflects current uncertainties about the global economic prospects.

The U.S. dollar price broke out to a new 14-month high on 6/4/10. USD main trend remains bullish.
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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
4.29% , MYY , Short 100% MidCap 400, MYY
6.35% , DXD , Short 200% Dow 30 PS, DXD
8.18% , MZZ , Short 200% MidCap 400 PS, MZZ
6.69% , QID , Short 200% QQQ PS, QID
7.00% , SDS , Short 200% S&P 500 PS, SDS
3.13% , DOG , Short 100% Dow 30, DOG
1.39% , IEF , Bond, 10 Year Treasury, IEF
0.64% , TIP , Bond, TIPS, TIP
3.60% , SH , Short 100% S&P 500, SH
0.04% , BWX , Bond Ex-US Treas, BWX
0.56% , CEPH , Cephalon Inc
1.04% , GLD , Gold Shares S.T., GLD
0.23% , SHY , Bond, 1-3 Year Treasury, SHY
0.26% , AGG , Bond, Aggregate, AGG

Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-4.71% , FEU , Value LargeCap Euro STOXX 50 DJ, FEU
-4.78% , PWT , Growth SmallCap Dynamic PS, PWT
-2.90% , VPL , Pacific VIPERs, VPL
-3.22% , KCE , Capital Markets KWB ST, KCE
-3.91% , IWP , Growth MidCap Russell, IWP
-4.97% , JKL , Value SmallCap iS M, JKL
-2.80% , BDH , Broadband H, BDH
-5.66% , VNQ , REIT VIPERs, VNQ
-10.77% , OMX , OFFICEMAX INC., OMX
-4.61% , VBK , Growth SmallCap VIPERs, VBK
-3.94% , JKI , Value MidCap iS M, JKI
-4.44% , PWY , Value SmallCap Dynamic PS, PWY
-5.32% , IWN , Value SmallCap Russell 2000, IWN
-4.69% , BK , BANK OF NEW YORK
-7.29% , LAMR , Lamar Advertising Company
-4.59% , PWJ , Growth Mid Cap Dynamic PS, PWJ
-3.65% , PWB , Lg Cap Growth PSD, PWB
-4.24% , ADRD , Developed 100 BLDRS, ADRD
-4.81% , PIC , Insurance, PIC
-8.18% , TXT , TEXTRON
-10.19% , LIZ , LIZ CLAIRBORNE
-7.45% , EWO , Austria Index, EWO
-3.05% , NY , Value LargeCap NYSE 100 iS, NY
-8.62% , DDS , DILLARD STK A
-3.34% , PTE , Telecommunications & Wireless, PTE
-3.90% , PBE , Biotech & Genome, PBE
-3.10% , PWV , Value LargeCap Dynamic PS, PWV
-4.89% , VGK , European VIPERs, VGK
-3.73% , IWD , Value 1000 Russell, IWD
-2.38% , TTH , Telecom H, TTH
-4.38% , ADRU , Europe 100 BLDRS, ADRU
-7.09% , AM , AMER GREETINGS STK A
-7.04% , AFL , AFLAC
-4.97% , VBR , Value SmallCap VIPERS, VBR
-3.59% , PIN , India PS, PIN
-4.56% , IJT , Growth BARRA Small Cap 600, IJT
-4.48% , PSJ , Software, PSJ
-6.95% , STI , SUNTRUST BANKS
-4.39% , IWS , Value MidCap Russell, IWS
-4.94% , TUR , Turkey MSCI iS, TUR

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

Consumer Discretionary (XLY) Bullish, Overweight. The Relative Strength Ratio (XLY/SPY) rose above 12-year highs on 5/27/10 and remains bullish. Absolute price of XLY remains above its 200-day SMA and May low and remains neutral. Support 30.34. Resistance 34.39, 36.13, 38.25 and 39.09.

Industrial (XLI) Bullish, Overweight. The Relative Strength Ratio (XLI/SPY) fell below its 50-day SMA on 6/1/10 and so is now neutral, according to the 50/200 trend-following moving average system. Absolute price of XLI held above its May low and remains neutral. Support 27.91. Resistance 32.41, 33.46, 34.24, 34.50, and 35.00.

Technology (XLK) Neutral, Market Weight. The Relative Strength Ratio (XLK/SPY) rose further above 4-month highs on 6/4/10 but still remains neutral. Absolute price of XLK held above its May low and remains neutral. Support 20.64. Resistance 23.27, 24.16, 24.68, and 25.69.

Consumer Staples (XLP) Neutral, Market Weight. The Relative Strength Ratio (XLP/SPY) has performed about in-line with the broader market for the past 8-months and remains neutral. Absolute price of XLP also remains neutral. Support 25.78 and 24.95. Resistance 27.83, 27.95, 28.20, 28.75, 29.29 and 30.29.

Health Care (XLV) Neutral, Market Weight. The Relative Strength Ratio (XLV/SPY) underperformed significantly over the past 4 months and remains bearish. Absolute price of XLV fell below 6-month lows on 5/25/10 and remains neutral. Support 27.96. Resistance 30.83, 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.

Financial (XLF) Neutral, Market Weight. The Relative Strength Ratio (XLF/SPY) has moderately underperformed the broader market for the past 7-months and remains neutral. Absolute price of XLF remains neutral. Support 13.84 and 13.51. Resistance 15.67, 16.13, 16.90, 17.12, 17.16, and 17.87.

Utilities (XLU) Neutral, Market Weight. The Relative Strength Ratio (XLU/SPY) firmed up since 5/27/10 and remains neutral. Absolute price of XLU remains bearish, with price below SMAs and the 50 below the 200 SMA. Support 27.44, 25.76. Resistance 30.59, 30.91, 31.64 and 32.08.

Materials (XLB) Neutral, Market Weight. The Relative Strength Ratio (XLB/SPY) fell below 14-month lows on 6/4/10 and remains bearish. Absolute price of XLB crossed below the 200-day SMA on 5/14/10 and remains neutral. Support 28.87. Resistance 33.06, 35.47, and 37.56.

Energy (XLE) Neutral, Market Weight. The Relative Strength Ratio (XLE/SPY) fell below 2-year lows on 6/1/10 and remains bearish. Absolute price of XLE fell below its 8-month lows on 5/25/10 and remains neutral. Support 50.15 Resistance 58.11, 59.84, 62.30, 62.73, 69.95, and 78.10.
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) fell to a 12-month low on 5/20/10. EEM/SPY trend turned bearish on 4/16/10, according to strict moving average analysis. Absolute price of EEM fell to an 8-month low on 5/25/10.

Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) fell below 5-year lows on 5/26/10 and remains bearish. Absolute price of EFA fell below 10-month lows on 5/25/10 and remains bearish.

NASDAQ 100/S&P 500 Relative Strength Ratio rose above 9-year highs on 6/4/10 and remains bullish.

NASDAQ Composite/S&P 500 Relative Strength Ratio rose above 9-year highs on 6/3/10 and remains bullish. Absolute price of the NASDAQ held above its May low and remains neutral.

Russell 1000 Value ETF Relative Strength Ratio (IWD/SPY) remains neutral. Absolute price of IWD tested and held above its February low and remains neutral.

Growth Stock/Value Stock Relative Strength Ratio (IWF/IWD) rose above 3-month highs on 6/4/10 and remains neutral. Absolute price of IWF held above its May low and remains neutral.

The S&P 500 Equally Weighted ETF Relative Strength Ratio (RSP/SPY) rose to challenge its highs on 5/27/10 and remains bullish. Absolute price of RSP held above its May low and remains neutral.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below the lows of the previous 22 months on 5/27/10 and remains bearish. Absolute price of OEX remains neutral.

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) fell below its 50-day SMA on 6/4/10 and so turned neutral. Absolute price of IWM held above its May low and remains neutral.

The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose to a new 15-year high on 5/28/10 and remains bullish. Absolute price of MDY tested its 200-day SMA on 5/25/10 and closed above it.

Crude Oil nearest futures contract price rolled to the downside and could test its low of 67.15 set on 5/25/10. Technical trends appear uncertain. Support 67.15 and 65.05. Resistance 75.72, 77.74, 78.81, 81.29, 87.15, 90.51, 98.65, and 102.84.

Gold nearest futures contract price has been consolidating since setting its all-time high at 1249.7 on 5/14/10. The main trend remains bullish. Support 1168.0, 1156.2, 1124.3, 1084.8, 1045.2, 1026.9 and 989.3. Resistance: 1249.7.

Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) fell steeply on 6/4/10 and is neutral.

Silver/Gold Ratio turned bearish on 5/17/10 when it crossed below both 50- and 200-day SMAs, with the 50-day SMA below the 200-day SMA.

Copper nearest futures price broke down to a new 7-month low on 6/4/10. Copper’s downtrend reflects current uncertainties about the global economic prospects. Strength in Copper suggests renewed hope about prospects for the world economy, while weakness suggests doubts. Support 2.9005 and 2.811. Resistance 3.187, 3.2675, 3.3225, 3.795 and 4.27.

U.S. Treasury Bond nearest futures contract price rose above 5-day highs on 6/4/10, reflecting a flight to safety. Support 121.06, 119.26, 118.24, 118.12, 115.15, 114.06. 113.04, and 112.15. Resistance 126.15 and 130.31.

Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) has been moving with the stock market and remains neutral.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) fell below 6-month lows on 5/20/10 but still remains neutral for the intermediate-term trend. This implies that investors are choosing somewhat less inflation protection. Absolute price of TIP remains bullish.

The U.S. dollar nearest futures contract price broke out to a new 14-month high on 6/4/10. USD main trend remains bullish. Support 85.325, 83.07, 81.74, 80.14, 79.73, 79.61, 78.83, 78.20, 76.74 and 75.90. Resistance 89.71 and 92.53.

The Art of Contrary Thinking: The various surveys of investor sentiment are best considered as background factors. The majority of investors can be right for a long time before a major trend finally changes course. The Art of Contrary Thinking is best used together with more precise market timing tools.

Advisory Service Sentiment: There were 39.8% Bulls versus 28.4% Bears as of 6/2/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio fell to 1.40, up from 1.35 the previous week. The current Bull/Bear 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.

VIX Fear Index recently has been stuck in the mid 30s after rising to a 14-month high of 48.20 on 5/21/10. This might suggest some kind of divergence compared to price indexes, which are nearer their extreme lows of the year. A high and rising VIX suggests increasing bearish sentiment. 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.

VXN Fear Index recently has been stuck in the mid 30s after rising to a 14-month high of 48.89 on 5/21/10. This might suggest some kind of divergence compared to price indexes, which are nearer their extreme lows of the year. A high and rising VIX suggests increasing bearish sentiment. VXN measures NASDAQ Volatility using a method comparable to that used for VIX.

ISEE Call/Put Ratio fell to .059 on 5/7/10, a low level that indicates bearish sentiment. Its 2-year mean is 1.20, and its typical range is 0.69 to 1.71, which represents two standard deviations from the mean.

CBOE Put/Call Ratio rose to 0.96 on 5/20/10, its highest level of the year. A high level indicates bearish sentiment. The 2-year mean is 0.70, and the typical range is 0.44 to 0.96, which represents two standard deviations from the mean.

The Dow Theory again 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) tested recent lows and held them. SPX is in a deeply oversold position and at previous support, suggesting that bargain-hunting demand could appear again roughly where it has before, technically speaking. Support 1056.74, 1040.78, 1029.38, 1019.95, 1012.42, and 1008.55. Resistance 1109.17, 1130.29, 1151.41, 1173.57, 1181.49, 1219.80, 1220.03, and 1228.74.

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
1181.49, Fibonacci 78.6% of 2010 range
1173.57, high of 5/13/2010
1151.41, Fibonacci 61.8% of 2010 range
1130.29, Gann 50.0% of 2010 range
1109.17, Fibonacci 38.2% of 2010 range

S&P 500 Cash Index Potential Support
1056.74, close of 2/8/2010
1040.78, low of 5/25/2010
1029.38, low of 11/2/2009
1019.95, low of 10/2/2009
1012.42, Gann 37.5% of 2009-2010 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
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

2.69% Bond, 20+ Years Treasury, TLT
1.39% Bond, 10 Year Treasury, IEF
1.04% Gold Shares S.T., GLD
0.64% Bond, TIPS, TIP
0.61% Bond, Corp, LQD
0.26% Bond, Aggregate, AGG
0.23% Bond, 1-3 Year Treasury, SHY
0.04% Bond Ex-US Treas, BWX
-0.14% Bond Muni ATM-Free S&P iS, MUB
-0.47% Bond EmrgMkt JPM iS, EMB
-0.56% Bond, High-Yield Corporate, HYG
-0.85% Financial Preferred, PGF
-1.17% Preferred Stock iS, PFF
-1.86% Malaysia Index, EWM
-1.87% Japan Index, EWJ
-1.91% Chile MSCI iS, ECH
-1.96% Agriculture DB PS, DBA
-2.26% Thailand MSCI iS, THD
-2.40% China 25 iS, FXI
-2.49% Hong Kong Index, EWH
-2.51% Singapore Index, EWS
-2.53% South Korea Index, EWY
-2.65% Consumer Staples SPDR, XLP
-2.68% Telecom DJ US, IYZ
-2.68% Mexico Index, EWW
-2.72% Taiwan Index, EWT
-2.90% Pacific VIPERs, VPL
-2.93% Health Care SPDR, XLV
-2.98% Utilities SPDR, XLU
-3.10% Commodity Tracking, DBC
-3.10% Value LargeCap Dynamic PS, PWV
-3.16% DIAMONDS (DJIA), DIA
-3.19% LargeCap Blend S&P 100, OEF
-3.20% Utilities VIPERs, VPU
-3.21% Technology SPDR, XLK
-3.22% Growth 1000 Russell, IWF
-3.22% Capital Markets KWB ST, KCE
-3.28% Energy DJ, IYE
-3.28% Latin Am 40, ILF
-3.31% Emerging VIPERs, VWO
-3.31% China LargeCap Growth G D H USX PS, PGJ
-3.33% Emerging 50 BLDRS, ADRE
-3.34% Silver Trust iS, SLV
-3.35% LargeCap VIPERs, VV
-3.35% Dividend Appreciation Vipers, VIG
-3.36% Indonesia MV, IDX
-3.39% Growth VIPERs, VUG
-3.39% Growth S&P 500/BARRA, IVW
-3.40% India Earnings WTree, EPI
-3.42% Technology DJ US, IYW
-3.42% Growth LargeCap NASDAQ 100, QQQQ
-3.43% Switzerland Index, EWL
-3.44% Brazil Index, EWZ
-3.44% LargeCap 1000 R, IWB
-3.47% Value VIPERs, VTV
-3.48% Dividend SPDR, SDY
-3.49% Info Tech VIPERs, VGT
-3.50% Energy VIPERs, VDE
-3.51% S&P 500 iS LargeCap Blend, IVV
-3.51% S&P 500 SPDRs LargeCap Blend, SPY
-3.51% Blend Total Market VIPERs, VTI
-3.52% Energy SPDR, XLE
-3.54% Value S&P 500 B, IVE
-3.55% Emerging Markets, EEM
-3.59% India PS, PIN
-3.60% LargeCap Blend Russell 3000, IWV
-3.63% Dividend DJ Select, DVY
-3.64% Canada Index, EWC
-3.69% Financial Services DJ, IYG
-3.70% Natural Resource iS GS, IGE
-3.73% Value 1000 Russell, IWD
-3.87% Dividend High Yield Equity PS, PEY
-3.87% Consumer Discretionary SPDR, XLY
-3.89% United Kingdom Index, EWU
-3.91% Growth MidCap Russell, IWP
-3.92% Dividend International, PID
-3.93% Growth EAFE MSCI, EFG
-3.96% Global 100, IOO
-3.96% Materials SPDR, XLB
-3.96% Financial DJ US, IYF
-4.00% MidCap S&P 400 iS, IJH
-4.00% Financial SPDR, XLF
-4.02% Growth MidCap 400 B, IJK
-4.06% Global ex US ACWI iS, ACWX
-4.06% LargeCap Blend S&P=Weight R, RSP
-4.07% MidCap Russell, IWR
-4.08% MidCap S&P 400 SPDRs, MDY
-4.09% Semiconductor SPDR, XSD
-4.15% Financials VIPERs, VFH
-4.17% Small Cap EAFE MSCI iS, SCZ
-4.20% Energy Global, IXC
-4.25% Value MidCap S&P 400 B, IJJ
-4.25% Biotech SPDR, XBI
-4.27% EAFE Index, EFA
-4.33% Networking, IGN
-4.39% Pacific ex-Japan, EPP
-4.39% Value MidCap Russell, IWS
-4.40% Value EAFE MSCI, EFV
-4.46% Semiconductor iS GS, IGW
-4.46% Basic Materials DJ US, IYM
-4.54% Germany Index, EWG
-4.56% Growth BARRA Small Cap 600, IJT
-4.58% Growth SmallCap R 2000, IWO
-4.61% Growth SmallCap VIPERs, VBK
-4.61% Oil, Crude, U.S. Oil Fund, USO
-4.69% Industrial SPDR, XLI
-4.81% Small Cap VIPERs, VB
-4.81% Water Resources, PHO
-4.82% SmallCap S&P 600, IJR
-4.83% Netherlands Index, EWN
-4.89% European VIPERs, VGK
-4.91% Europe 350 S&P Index, IEV
-4.94% Turkey MSCI iS, TUR
-4.95% Belgium Index, EWK
-4.96% Transportation Av DJ, IYT
-4.97% Value SmallCap VIPERS, VBR
-5.03% SmallCap Russell 2000, IWM
-5.06% WilderHill Clean Energy PS, PBW
-5.08% Sweden Index, EWD
-5.14% South Africa Index, EZA
-5.15% Homebuilders SPDR, XHB
-5.17% Australia Index, EWA
-5.19% Value SmallCap S&P 600 B, IJS
-5.22% Microcap Russell, IWC
-5.26% Value SmallCap S&P 600, RZV
-5.32% Metals & Mining SPDR, XME
-5.32% Value SmallCap Russell 2000, IWN
-5.38% Russia MV, RSX
-5.43% Real Estate US DJ, IYR
-5.66% REIT VIPERs, VNQ
-5.70% EMU Europe Index, EZU
-5.76% Realty Cohen & Steers, ICF
-5.86% REIT Wilshire, RWR
-5.94% France Index, EWQ
-6.70% Italy Index, EWI
-6.83% Spain Index, EWP
-7.45% Austria Index, EWO