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Futures show fractional gains

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Stock futures are showing fractional gains this morning as S&P futures are trading higher by 3 points to 1,091. NASDAQ futures are up 2 points at 1,297 and Dow futures are higher by 17 points at 9,370.

Bullish percent data

Yesterday's action had little effect on the bullish percent data and shows the NASDAQ-100 bullish percent ($BPNDX) at 59% bullish, but in bull correction status. Four other major indexes show their bullish percent charts in "bull alert" status. The S&P 100 bullish percent ($BPOEX) is currently showing 40% of the 100 stocks there having a buy signal associated with their point and figure charts. The S&P 500 bullish percent ($BPSPX) is currently in "bull alert" status at 43%. The more broad bullish percent data shows the NASDAQ-Composite bullish percent ($BPCOMPQ) at 36.9% bullish and the NYSE Composite ($BPNYA.X) 27.9% bullish. You can view these charts at www.stockcharts.com to get a feel for their ranges and historical action. Just go to the point and figure charting section and dig in!

The current status of the bullish percent data tell us we're very much in a bullish phase still for many of the major markets. The only index indicator listed above that resembles some bearishness is that of the NASDAQ-100. This index has the tendency to whip around as there are some volatile stocks associated with it and it is usually the first indicator of those listed above to turn up or down on its chart. Right now, it looks like the NASDAQ-100 is taking a rest after a bullish move off the bottom and a historically low reading of 0%. That's right, in late September, the bullish percent for the NASDAQ-100 showed ZERO stocks in that index having a "buy signal" on its point and figure chart. After a powerful move straight up to 62% bullish, the recent pullback in the bullish percent is analogous to a bull taking a rest after a good sprint.

The other indicators show a steady as you go and methodical move higher and should be a good market environment for buying stocks with good relative strength on pullbacks near support. Stocks that lack relative strength and have been out of favor RELATIVE to the market or sector's they belong offer the bearish trader some opportunity also. Since the NASDAQ-100 bullish percent is bull correction and looks like some bulls are taking a rest, that would be an area to be looking for stocks to potentially find some bearish candidates.

Jeff Bailey
Senior Market Technician
Option Investor

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