Tuesday, July 22, 2008

Bullish Percents and the rally

With last week's bounce still in effect I took a look at the bullish percents to gauge how long this may run. It was a bit of a mixed bag.

While all three key bullish percent indices generated bullish signals, only the S&P breached declining resistance, as defined by closing price, to suggest it is a true bull rally. It could change today - although results from American Express (AXP) won't help, even if oil trades around $132 a barrel.

The Dow finished the day bang on resistance. Will it pullback like the Nasdaq did yesterday?

The S&P cleared the sharper of two resistance levels. A slower resistance line lurks some 60 points above:

However, it is interesting to see the Russell 2000 continue to map out a bottom similar to how it did in March:

Today's action may give more significant clues, even if there is a bit of trader's exhaustion out there following last week's capitulation. Look for prices to drift lower but hold last week's lows.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website