Stocks closed lower on lighter trading volume on 7/28/10. The S&P 500 Composite moved a little further below its 200-day SMA and remains neutral. SPX remains above its 50-day SMA, but the 50 is below the 200. MACD rose further above 12-week highs, but many other price momentum indicators turned modestly lower. A mild price consolidation is evident, nothing more. Although greater price volatility also would be normal, downside damage may prove to be limited, reflecting the degree of the May-July deep oversold condition and the depth of bearish sentiment, which has yet to be worked off. Russell 1000 Value ETF Relative Strength Ratio appears moderately bearish for the intermediate term, trending downward since 5/3/10. Longer term, IWD/SPY appears bearish, trending downward since 3/22/07. Growth Stock/Value Stock Relative Strength Ratio appears moderately bullish for the intermediate term, trending upward since 4/14/10. Longer term, IWF/IWD appears bullish, trending upward since 8/8/06. Crude Oil fell below 3-day lows on 7/28/10. Oil tried but failed to overcome resistance around 79-80. Oil has been in a trading range since making a low at 64.24 on 5/25/10. Gold fell below 12-week lows intraday on 7/28/10 before reversing to close higher. On 7/22/10, I wrote, “Gold has been in a correction within a major bullish trend since 6/21/10, and that correction may resume soon.” Copper rose further above 10-week highs on 7/28/10, again confirming a significant uptrend for the intermediate-term. Strength in Copper suggests confidence about prospects for the world economy.

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