Some market indicators aren't as bearish as you might think: Chart review

I'd like to share various charts below, to demonstrate that things aren't as bearish as you might think - at least through the end of this year. First, our year 2011 forecast in general is currently showing that, once we get past October (whatever turbulence it may bring), the markets should be up for a "Santa rally" into November and December, maybe beyond. Second, look at the Baltic Dry Index ($BDI) chart below - it made a huge move up recently (kinda reminds me of how Google ($GOOG) has powered up recently! The $BDI has gotten overbought but that doesn't mean it'll crest immediately, or that it won't rebound for a first retest from a pullback.

Below that are daily and monthly charts of the Dow Transports index ($TRAN). Along with the $BDI, these tend to track economic activity, and it's positive they've been rising to challenge the 2007 highs. They've dropped back, but notice now the daily chart's volume-by-price indicator (horizontal bars) show an "air pocket" above the current price, although heavier resistance by this year's highs. Even if the Transports can't move above the monthly chart's double top, there's room to rally up more for another effort.

Last, I've added the McClellan Oscillator chart for the Nasdaq (with its summation index in a lower indicator window), and the $TRIN Arms index. The McClellan Oacillator shows the market's near-term frothy, but can do a first retest after a pullback, and the longer-term indication from the rising summation index clues us in that the market has room to move higher when it's ready. Finally, the $TRIN similarly shows that the market is overbought, but the $TRIN's moving averages are high enough that they show the market has room on the upside before it finishes working off the bigger-picture oversold condition.

It's true that other breadth indicators (like the Nasdaq advance-decline data, shown in a long-term chart at bottom) show that market isn't running strong. But once we get past possible turbulence into later this month, the new-month new money plus seasonal influences are likely to afford swing and KI$$ traders a decent rally to ride, at least into the end of this year.