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Stocks look to add gains

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Stocks look poised to add to yesterday's reversal higher as stock futures are higher across the board as Treasuries come under selling pressure sending YIELDS higher.

S&P futures (sp02u) are higher by 5.6 points at 923.60, NASDAQ futures (nd02u) are up 974.50 and Dow futures (dj02u) are up 40 points at 8,760.

Fair value for the S&P 500 today is $0.48. That price will not change during the session. HL Camp & Company has their computers set for program buying at $1.84 and set for program selling at $-1.74. Fair value for the NASDAQ-100 today is $1.95.

Bullish Percent

Yesterday's action has the bulk of our major market bullish percent indicators from www.stockcharts.com reversing into a stage of bullishness, which should have traders investors now more bullish in their trade and account management.

The shorter-term and more volatile NASDAQ-100 Bullish % ($BPNDX) is "bull confirmed" at 32% (32 of 100 stocks showing a point and figure buy signal), after a relative low reading of 8% in early July.

The still narrow yet less volatile S&P 100 Bullish % ($BPOEX) remains "bull alert," but higher at 36% (36 of 100 stocks showing a point and figure buy signal) after a relative low reading of 8% in mid-July.

The broader S&P 500 Bullish % ($BPSPX) remains bull alert and continues to show a net gain of stocks generating "buy signals" on the point and figure charts where demand is outstripping supply. Current reading is "bull alert" at 36.4% and would currently take a reading of 66% to achieve "bull confirmed" status.

Note: Per yesterday morning's 09:00 Update, traders that may have shorted partial positions in the S&P Depository Receipts (AMEX:SPY) $92.24, should be STOPPED out as profiled.

One of the broader and more institutionally monitored bullish %, which is a very slow and methodical mover, has the NYSE Composite Bullish % ($BPNYA) "bull confirmed" at 33.27%, after reversing up just this past Monday from a relative low of 26%. This would have one looking for the markets to potentially put together a bullish move similar to that found in October of last year to approximately mid-March.

The also broad NASDAQ Composite Bullish % ($BPCOMPQ) is the only major bullish % from www.stockcharts.com that remains in a "bear confirmed" status at 29.68%, but slowly edging up from a relative low reading of 25.77% from 07/24/02. Currently, this would have a bull tending to shy away from stocks that do not have a point and figure buy signal associated with its chart, or trade below its bearish resistance. It would take a reading of 32% to get this broader market indicator back into a "bull alert" status. However, as the other bullish % charts have shown in the past, a rising tide tends to lift all boats and I'd expect this indicator to eventually reverse higher.

Subscribers can view all of these bullish % charts for FREE by visiting www.stockchart.com. To better understand/comprehend how these bullish % charts are built and how they can guide the investor/trader to understanding risk, visit the "Bailey's Basics" section of the site and article title "Understanding Risk is Key" near the bottom of the section.

Jeff Bailey
Senior Market Technician
Option Investor

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