HeadlineCharts.blog.com

All charts and comments intended for education and discussion purposes only. No investment recommendations are being offered. Comments below related to this post are encouraged. | MON - Sector Strength | TUE - Interest Rates | WED - Market Sentiment | THU - Commodities & Currencies | FRI - Market Breadth | SAT - Bullish Percents | About | contact: HeadlineCharts@gmail.com |

Last week's bullish percents are above and this week's are below.   Some nice upward reversals are shown, most notable is the move by energy stocks.  This area was very strong this week.  This bull market since 2004 has been led by energy, commodities and small caps, and that pattern appears to be resuming after a break in that leadership in the second half of last year.  What I find most encouraging for the short-term trend is that the major indexes and sectors corrected down to the neutral area, but have held above the 50% level.

For a complete understanding of bullish percents there are a number of good books available, including "Point & Figure Charting" written by Tom Dorsey.  Some blogs I like to read on the weekend are Declan Fallond, TraderMike, Millionaire. 

Market Watch featured an article this week by Mark Hulbert that discussed Marty Zweig's bullish indicator of two days of 9-1 up volume.  Hulbert mentions that we recently registered another of the Zweig signals, similar to the signal received last summer, and that signal worked out quite well.  As with all signals of this type, there is no guarantee it will work again, or as well as it did last time, but it sure is encouraging to the bulls and not a good sign for the bears.  But also note the gigantic down volume over up volume shown on Feb-27 not mentioned by Hulbert, along with the high down volume on Mar-5 and Mar-15.  How does that impact the Zweig signal?

Below I have tried to better illustrate the favorable 9-1 up volume days.  The total volume on these days was decent but not enough to notice unless the up versus down volume is compared.  I really like the W pattern and the nice clean open above short-term resistance with follow through during the day on Wed Mar-21 (Fed day).   Also there is a nice close above the 50-day moving average.  Now it would be nice to see it hold and consolidate above these levels, and then register a high volume follow through day above the recent highs.

John Murphy recently mentioned how important the financials are to the market at this point.  Not only does this sector lead the SPX, but it also reveals the underlying health of the market as the mortgage nervousness plays out.  This week the financials provided a very encouraging signal as it bounced off the lower monthly up trend line on high volume.