Stock Market: a small recovery attempt was not confirmed by volume.

The S&P 500 rose 0.65% on Monday, but volume of trading declined.

The Dow-Jones Industrial Average rose, but the Transportation and Utility Averages fell, indicating bearish price divergences.

Large Cap stocks rose more than Mid Caps, while Small Caps declined again, continuing their trend of underperformance.

NASDAQ Composite/S&P 500 Relative Strength Ratio broke down below 4-month lows on 11/2/09, indicating bearish trends for the short term and intermediate term.

Nasdaq Cumulative Daily Advance-Decline Line fell to its lowest level in more than 3 months and continues to underperform the NYSE A-D Line.

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
% Price Change, Symbol, Name
8.29% , F , FORD MOTOR
5.64% , CTB , COOPER TIRE
7.17% , BC , BRUNSWICK
4.81% , BBT , BB&T
2.60% , MHS , MEDCO HEALTH
2.02% , VIA , VIACOM INC.
3.30% , JCI , JOHNSON CONTROLS
2.05% , AIG , AMER INTL GROUP
1.67% , VIA.B , VIACOM STK B
2.59% , WPI , WATSON PHARM
5.37% , MOT , MOTOROLA
3.52% , THC , TENET HEALTHCARE
1.38% , GR , GOODRICH CORP
0.92% , AET , AETNA
2.58% , KMB , KIMBERLY CLARK
1.08% , BCR , C R BARD
1.88% , PPG , PPG INDUSTRIES
1.11% , BSX , BOSTON SCIENT
0.66% , BF.B , BROWN FORMAN STK B
2.97% , CBS , CBS CORP.
1.53% , TAP , ADOLPH COORS STK B, TAP
1.00% , BNI , BURLINGTON NORTH
2.37% , VMC , VULCAN MATERIALS
3.42% , IGT , INTL GAME TECH
1.62% , DLX , DELUXE
2.52% , BMS , BEMIS
3.77% , UIS , UNISYS
1.49% , APC , ANADARKO PETRO
0.52% , YUM , YUM BRANDS

Bearish Stocks: Falling Price and Rising Volume
% Price Change, Symbol, Name
-65.28% , CIT , CIT GROUP
-3.23% , SRE , SEMPRA ENERGY
-1.88% , CMS , CMS ENERGY
-6.50% , FRE , FREDDIE MAC
-2.45% , C , CITIGROUP
-2.06% , HOT , STARWOOD HOTELS
-1.93% , VLO , VALERO ENERGY
-2.76% , NCR , NCR
-0.90% , MHP , MCGRAW HILL
-3.09% , MU , MICRON TECH
-2.45% , MCO , MOODYS CORP
-1.08% , AM , AMER GREETINGS STK A
-2.08% , NUE , NUCOR
-0.62% , GLW , CORNING
-1.52% , HUM , HUMANA
-1.64% , ROK , ROCKWELL AUTOMAT
-1.33% , MDP , MEREDITH
-0.31% , T , AT&T Corp., T
-3.15% , SNV , SYNOVUS
-0.62% , KSU , Kansas City Southern, KSU
-0.15% , UNP , UNION PACIFIC
-0.19% , RHT , Red Hat Inc.
-0.12% , PFG , PRINCIPAL FINL
-0.22% , DDS , DILLARD STK A
-2.71% , MBI , MBIA
-0.08% , LEN , Lennar Corp.
-0.77% , NSM , NATL SEMICONDUCT
-0.08% , FHN , FIRST TENNESSEE
-0.18% , WHR , WHIRLPOOL

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

Technology Neutral, Market Weight. The Relative Strength Ratio rose to a new 13-week high on 10/30/09. Short term and intermediate term, the relative trend is bullish. Long term, on 7/22/09, XLK/SPY rose to its highest level in 7 years, thereby confirming a long-term uptrend in effect since 9/30/02.

Consumer Discretionary Neutral, Market Weight. The Relative Strength Ratio broke down to a new 8-week low on 10/28/09, turning the short-term relative trend bearish. Long term, XLY was relatively strong from 11/19/08 to 4/30/09, but that trend is now in question.

Consumer Staples Neutral, Market Weight. The Relative Strength Ratio rose to another new 13-week highs on 10/30/09. This defensive sector outperforms when investors move away from risk.

Financial Bearish, Underweight. The Relative Strength Ratio broke down to a new 11-week low on 10/28/09. The XLF/SPY trend looks bearish for the intermediate-term and probably the long-term as well.

Health Care Bearish, Underweight. The Relative Strength Ratio broke out above previous 3-week highs on 10/30/09, which appears bullish for the short term. XLV/SPY fell below the lows of the previous 12 months on 10/22/09, which appeared bearish for the long term.

Industrial Neutral, Market Weight. The Relative Strength Ratio broke down to another new 8-week low on 10/30/09. XLI/SPY has underperformed since making a high on 9/17/09. XLI/SPY was in an intermediate-term uptrend from its low on 3/6/09 to its high on 9/17/09. The long-term trend peaked on 3/31/08.

Energy Neutral, Market Weight. The Relative Strength Ratio broke down below previous 11-day lows on 10/30/09, which is bearish for the short term. Longer term, it appears likely that XLE/SPY bottomed a year ago, on 10/16/08, and has been building a technical base over the past year.

Materials Neutral, Market Weight. The Relative Strength Ratio broke down to a new 14-week low on 10/28/09. Short term and intermediate term, the relative trend is bearish. Long term, XLB/SPY has underperformed for 16 months since 6/23/08.

Utilities Bearish, Underweight. The Relative Strength Ratio fell below previous 24-month lows on 10/14/09. XLU has underperformed since 11/21/08, as the appetite for risk recovered.

Emerging Markets Stocks ETF Relative Strength Ratio fell steeply, breaking down below the lows of the previous 5 weeks on 10/28/09, confirming a downside correction for the short term. EEM/SPY moved above previous 6-year highs on 10/14/09, confirming a major bull market trend.

Foreign Stocks ETF Relative Strength Ratio fell steeply, breaking down below the lows of the previous 8 weeks on 10/28/09, confirming a downside correction for the short term. above previous 6-week highs on 10/21/09. The ratio outperformed from 10/27/08 to 9/9/09, and that uptrend could resume eventually. EFA is the ETF representing the EAFE, the international developed country stock markets, excluding the U.S. and Canada.

NASDAQ Composite/S&P 500 Relative Strength Ratio broke down below 4-month lows on 11/2/09, indicating bearish trends for the short term and intermediate term.

Growth Stock/Value Stock Relative Strength Ratio broke out above highs of the previous 12 weeks on 10/30/09. IWF/IWD was in an uptrend from 8/8/06 to 3/5/09, and it seems quite possible that uptrend could resume.

Russell 1000 Value ETF Relative Strength Ratio broke down below the lows of the previous 12 weeks on 10/30/09. IWD/SPY has underperformed since 9/18/09. Long term, IWD/SPY remains in a bearish trend, underperforming since 3/22/07.

The S&P 500 equally weighted index relative to the S&P 500 capitalization weighted index broke down to a new 8-week low on 10/28/09, confirming a significant downside correction. The ratio had been in a strong uptrend from 11/19/08 to 9/16/09, and that trend could resume when this correction is over.

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio broke out above the highs of the previous 13 weeks on 10/28/09, as the market shifted back again toward risk aversion.

The Small Cap/Large Cap Relative Strength Ratio fell below the lows of the previous 16 weeks on 10/29/09, confirming again the preexisting bearish trend.

The Mid Cap/Large Cap Relative Strength Ratio broke down to a new 13-week low on 10/28/09, indicating a significant downside correction. The major secular trend since 1999 remains bullish, however.

Crude Oil nearest futures contract price moved further below the lows of the previous 2 weeks on 11/2/09, but reversed to close higher. The short-term trend seems uncertain. Long term, Oil made a new 12-month high of 82.00 on 10/21/09, confirming a bullish major trend. Potential support may be seen around the high of 75.00 set on 8/25/09.

Gold nearest futures contract price closed above the highs of the previous 4 trading days on 11/2/09, but may not be out of the woods in the short term. Long term, Gold rose to an all-time high of 1072.0 on 10/14/09, confirming a bullish major trend. Technical supports might be found around previous highs and lows at 1026.9, 1024.7, 982.2, 940.3, 931.5, 925.2 and 904.8, based on the nearest futures contract. Watch highs at 1069.0 and 1072.0 for potential resistance.

Gold Mining Stocks ETF Relative Strength Ratio broke down below the lows of the previous 9 weeks on 10/30/09. The 2-week, short-term trend has been weak. The ratio rose to a 14-month high on 9/17/09, confirming a preexisting longer-term uptrend in effect since 10/27/08. This main trend remains bullish for both Gold bullion and Gold Mining Stocks.

Silver/Gold Ratio fell steeply to another new 8-week low on 10/30/09, indicating a significant downside correction. A downtrend suggests doubts about global economic prospects.

Copper nearest futures contract price has turned choppy and uncertain for the very short term over the past few days. Longer term, Copper broke out to a new 13-month high of 3.0690 on 10/26/09, thereby clearly confirming that the main trend remains bullish. Rising copper prices suggest growing confidence about global economic prospects, while falling copper prices suggest doubts.

U.S. Treasury Bond December futures contract price has turned choppy and uncertain for the short term. Intermediate term, the Bond has been in a mild rising trend since making a low on 6/11/09. The Bond may find short-term support around the previous lows of 117.25 set on 10/26/09, 117.18 set on 9/9/09, and 116.30 set on 8/24/09. On 8/7/09, Bonds found support at the upper end of the 112-115 zone of many previous reversal points .

Bond Quality Relative Strength Ratio fell below the lows of the previous 3 weeks on 10/30/09, confirming a preexisting downside correction for the short term. When JNK/LQD is weak, that indicates risk aversion. Long term, JNK/LQD rose to a new 12-month high on 10/23/09, indicating an increasing appetite for risk.

The U.S. dollar nearest futures contract price has turned choppy for the short term. Long term, the dominant trend remains bearish. USD fell below the lows of the previous 14 months on 10/21/09, confirming a bearish major trend.

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. So, Contrary Thinking should be used with more precise market timing tools.

Advisory Service Sentiment: There were 48.3% Bulls versus 22.5% Bears as of 10/28/09, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio was 2.15, up from 2.14 the previous week. The ratio was 2.61 on 8/26/09, the highest reading since 10/17/07. The ratio’s 39-year range is 0.28 to 17.51, the median is 1.43, and the mean is 1.73.

VIX Fear Index jumped to a 16-week high of 31.84 on 11/2/09, indicating rising levels of fear. VIX fell to a 13-month low of 20.10 on 10/21/09, indicating bullish complacency. VIX is down from a closing high of 80.86 set on 11/20/08. 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 jumped to a 16-week high of 31.42 on 11/2/09, indicating rising levels of fear. VXN fell to a 13-month low of 20.75 on 10/21/09, indicating bullish complacency. VXN is down from a closing high of 80.64 set on 11/20/08. VXN measures NASDAQ Volatility using a method comparable to that used for VIX.

ISEE Call/Put Ratio fell to 0.84 on 10/30/09, indicating bearish sentiment. The ratio’s 6-year mean is 1.41, its median is 1.36, and its range is 0.51 to 3.16.

CBOE Put/Call Ratio rose to 0.80 on 10/30/09, indicating bearish sentiment. The ratio’s 6-year mean is 0.66, its median is 0.64, and its range is 0.35 to 1.35.

Fundamentals: The 2003-2007 Bull Market was fed by abundant global liquidly, M&A, leveraged buyouts, corporate stock buybacks, and a net balance of positive earnings surprises. The unfolding fallout from the credit market crisis derailed that engine. Since the stock market low on 3/9/09, massive monetary and fiscal stimulation appears to have had a Bullish impact on investor sentiment.

The Dow Theory signaled a Primary Tide Bull Market on 7/23/09 when both the Dow-Jones Industrial Average the Dow-Jones Transportation Average closed above their May-June 2009 closing price highs. This reverses the previous 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
1,576.09, high of 10/11/2007
1,552.76, high of 10/31/2007
1,523.57, high of 12/11/2007
1,498.85, high of 12/26/2007
1,440.24, high of 5/19/2008
1,406.32, high of 5/29/2008
1,381.50, Fibonacci 78.6% of 2007-2009 range
1,366.59, high of 6/17/2008
1,335.63, high of 6/25/2008
1,313.15, high of 8/11/2008
1,274.42, high of 9/8/2008
1,255.09, high of 9/12/2008
1,238.81, Fibonacci 78.6% of 1,576.09 high
1,228.74, Fibonacci 61.8% of 2007-2009 range
1,220.03, high of 9/25/2008
1,158.76, EW ABC measured move target
1,121.44, Fibonacci 50.0% of 2007-2009 drop
1,101.36, high of 10/21/2009
1,066.83, high of 10/29/2009
1,047.03, Gann 12.5% Retrace of 2009 range
1,041.17, low of 9/25/2009

S&P 500 Cash Index Potential Support
1,019.85, low of 10/2/2009
1,014.14, Fibonacci 38.2% of 2007-2009 drop
1,007.78, Gann 37.5% of 2007-2009 range
998.80, Fibonacci 23.6% Retrace of 2009 range
991.97, low of 9/2/2009
992.72, Gann 25% Retrace of 2009 range
978.51, low of 8/17/2009
956.50, Dow 33.3% Retrace of 2009 range
956.23, high of 6/11/2009
935.35, Fibonacci 38.2% Retrace of 2009 range
930.17, high of 5/8/2009
884.08, Fibonacci 50% of 2009 range
869.32, low of 7/8/2009
826.83, low of 4/21/2009
832.80, Fibonacci 61.8% Retrace of 2009 range
814.53, low of 4/7/2009
813.62, high of 4/1/2009
779.81, low of 3/30/2009
775.43, Gann 75% Retrace of 2009 range
759.79, Fibonacci 78.6% Retrace of 2009 range
721.11, Gann 87.5% Retrace of 2009 range
666.79, intraday low of 3/6/2009
602.07, Fibonacci 38.2% of 1,576.09 high