Wednesday, May 06, 2009

Market Sentiment: S&P Bullish Percent at Resistance

The S&P Bullish Percent has reached the reaction high resistance from the start of the year. This follows the break of resistance in the Summation Index and Percentage of Stocks above 50-day MA. Even the former lagging Percentage of Stocks above the 200-day MA has reached resistance from last August highs:

All very healthy for the long term even if the short term this has been thin air for the best part of a month.

The "Death Cross" between the 50-day and 200-day MAs of the VIX shows a long term shift towards low volatility; even if in relative terms @33 it is near the upper range of volatility for a bull market but well below the lows of a bear market.

Having said that, the cyclical bear market has at least a year left in the tank but the worst looks behind us. But the secular bear still has a cyclical bull and bear market ahead of it; the next cyclical bear market will probably come on the back of all the inflation the current stimulus will generate. Gold Bugs are a bear cyclical too early.

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.