Bullish Percents all Bearish

Adding to the intermediate top picture are the Bullish Percents for the Dow, S&P and Nasdaq are now all negative. None of the indices came close to challenging price resistance during the Bullish Percents rally; very disappointing and a worry for bulls looking for a tradable bottom.

I think money will stay on the sidelines (or move back there for those in the market) over the next couple of weeks. I don't think we are going to see another big downleg like Sep/Oct as the associated period of volatility is a rare occurrence. More likely is a series of drip losses to take the indices back to November lows. From there it's anyone's guess but it will mark the first point of entry for value buyers to step in.

During these market conditions I like to read Richard Lehman's analysis on Trend Channels to get an idea as to what's happening over the short term. His reading of what's going on is a bounce looks best bet forward. If a bounce does materialise I will be looking for confirmation of the intermediate top with a failed test of former ascending triangle resistance.

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

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