Some stock pickers start with a screen. I start with a concept: Look for the hated!

I search for investment themes that are decidely contrarian. That means that few like the concept, the sector or the stock. The themes must meet several important critera:

Negative sentiment and/or polling
Analyst skepticism
Modest valuations

and most importantly -- hatred.

Today was quit a volatile session before the May jobs report is disclosed tomorrow morning at 8:30. Stocks traded in both directions today significantly. At the end of the day the Nasdaq Composite (QQQQ) led the market today with a mild 0.2% gain while the DJIA (DIA) and S&P 500 (SPY) fell in small order 0.3% and 0.1%, respectively.

The stock market had another nice day in terms of price action with the major indexes all posting gains of 1% or higher. Breadth was strong again (not like when the rally began in March 2009-could indicate a late stage bull market) but volume figures are making it difficult to determine if the resumption of the rally is for real or just a head fake.

For the third session in a row stocks had a down day. Just like yesterday stock opened weak and had an afternoon rally. Only today stocks materially weakened in late trading and couldn't finish near their highs. As a result, we are lowering the support/resistance levels for the DJIA (DIA), S&P 500 (SPY), and Nasdaq Composite (QQQQ) (see below).