42% of the top 1500 traded stocks are above the 50 day moving average. This is the highest number since he hit bottom in early August.
7% of the top 1500 traded stocks are above their bollinger band, although not an impressive number, this is the highest we have seen since before we started this nasty decline in early July,
The VIX which most traders view as a way to gauge the fear in the market is in the lower 20% of its’ Bollinger Band, it has not been this low since the start of the decline.
Volume was low today, which might mean we have a few down days of consolidation to absorb, but I think the low volume is simply because many players are still waiting this move out to see where it goes.
The Nasdaq which has been leading this recover, finally completed (and closed above) a new high today which is a bullish indicator, the SPY and IWM have a ways to travel before getting to a new high, but if this strength continues we should see these tests occur shortly as well.
The Nasdaq touched the 200 day moving average, although could not get over it … but this is to be expected given the move we have just gone through. It is going to take some effort to get over the 200 day, but once it does we should see a fast move to the upside.
Volatility is shrinking slowly which is most important to get the market ‘back to work’. This has a ways to go still, but as the price movement slows the day traders that make the market move so wildly will get bored and go back to longer term investing. As this happens, we will see the markets start trending in one direction or the other as they normally do instead of this up/down/up/down movement that we have seen over the past weeks. Low volatility calms nerves and gets regular investors back in the market.
All in all, one by one my bullish indicators are getting tripped and signaling health is here again.
I have to expect that we will have a pullback in the coming day or two (probably tomorrow or Monday) since we have gained roughly 5% in the past four days, but at this moment I’m not fearful of this possibility. I would look at it as a buying opportunity.