Reading the S&P500, FXI, and equity markets' tea leaves confirms short-term optimism

I really appreciate Kosta (DocK to me) providing good info and the thought that we're seeing signs of improvement. Thanks! I appreciate those ... and I don't want to discount these positive signs. I'd just like to provide some additional comments on why I remain concerned about the equity markets' direction, at this time.

Many indicators I'm reviewing this weekend are confirming that equities reached a potentially significant low this past week, with investors feeling more optimistic about the immediate direction in the days ahead. But also that reasons remain for feeling uncertain about whether any bounce can lead the markets above the January 6 highs, versus another failed bounce before equities roll over to much lower levels.

These findings are consistent with the triangle idea that I presented in some detail yesterday, both here and at my UBTNB3 site (link is to the right).

The bullish percent for the SPX chart below is showing sentiment dipped to moving average potential support, while the ISEE index (chart and end-of-day data) shows that equity investor sentiment snapped up sharply into the end of last week:




It's very interesting that the ISEE's list of the "most bullish" equities includes FXI, the ETF for the Xinhua China 25:

TOP BULLISH
Symbol ... ISEE .... Puts ..... Calls
DAL .........1,539 .... 106 ..... 1,631
GM ..........1,146 ..... 276 ..... 3,162
FXI ..........1,047 .... 448 ..... 4,692

When sentiment is so bullish on something, it's normally a warning sign. The hot sentiment on FXI (not to mention GM and Delta Air Lines) doesn't give me comfort about the next big move for the equities indices generally. So even if we do see a bounce, I'm remaining skeptical.

Why don't we take a look at the FXI and DAL charts? Here we go - the FXI chart just has my standard indicators (and given how they're in bearish territory, I'd consider a bullish outlook to be - well, shall we say "premature"!). But I couldn't resist also putting a couple of wedge trendlines and a comment on DAL (which also has indicators looking weak):



I'm also posting the McClellan Oscillator and Summation Index charts and other technical charts for traders, at my UBTNB3 site (link is to the right).