Friday, November 23, 2007

Bears swilling in the muck

An incredible (further) sell off on Wednesday has been followed with a modest pullback on this shorterned trading day. The biggest story of the week are the internals - something you will have no doubt seen mentioned on other blogs. Here is my take.

The Nasdaq Bullish Percent Index is only a couple of points away from entering bear market oversold territory, but is at a bottom for a bull market:

The percentage of Nasdaq stocks above the 50-day MAs is also lingering close to bear market territory, and like the bullish percents, is at a level which generated the August bounce. Note the developing bullish divergence in Ultimate Oscillator, a good sign for a bottom here.

The Nasdaq Summation Index is perhaps the only internal which still has some downside room to indicate a strong bottom, but an uptick here would not preclude a decent rally:

Today's action will be interesting for those few traders who decide to take a dip in the pool, as things look nicely set for a big gap up on Monday. Enjoy the long weekend and Turkey leftovers.

P.S. Because of another weekend without Broadband there will be no Stockcharts Weekly Review.