Dow % bullish Indicator for 12/8/09 close

The indicator stood at -15.71% at the close on Tuesday. We could easily see some bearish action after such a readying, but its not a very bearish reading. Looking through the Dow there is very little bullishness and just enough bearishness to turn it negative. Mostly, Dow stocks are holding moving averages and not significantly breaking down, though there are a few.

I take today's reading as a reason to increase caution. If the Dow closes down significantly today we are likely to revisit lower up trend lines and moving averages.

Dow % bullish Indicator for 12/7/09 close

The indicator is still heavily weighed by neutral readings, which count as a 0. This makes the trend overall increasingly bearish. Here at 2:00 p.m. eastern the Dow is down around 100 points. A lot of the neutrals could easily become bearish and a big pull back in the bullish looking charts would turn them into neutrals. So far today this is the general trend. The indicator hovering around 0 is not something new. Last year in the end of year doldrums the same situation occurred. Between 12/2 and 12/30 there were only three days where indicator was more than 40% bullish or bearish. If the indicator should spend consecutive days outside of the -40% to 40% range, I would be much more tempted to trade a leveraged ETN one way or the other, but for now we are predictably range bound here at the end of the year.

Dow % Bullish Indicator for 12/1/09 close

The Dow % bullish indicator stood at 47.89 at the close on Tuesday. This is almost a return to the bullish strength shown pre-Dubai. A big down move in the Dow today could easily reverse this number back to bearish again as many Dow stocks hovered around 0 for the previous two days. There were pull backs to support levels across most of the Dow and Tuesday featured a nice bounce off these levels. Volume is still not great on Dow stocks, but volume does tend to be higher than last week. Given past history of the indicator and the current reading, I would say bulls should not see a big downside risk, but there is precedence for the Dow to go in either direction after a two or three day period of negative readings on the Dow % bullish indicator. Of course we are either on a shoulder or a on the way to nice new highs once again on the general markets. The Russell 2000 has been the weakest cap of the markets during the November move. Today, the Russell 2000 leads. All things considered, I think there is more of a case for an afternoon rally in the markets than a case for a sell-off. Only time will tell.