Hopes, fears, fundamentals and technicals: peeking at VIX, McClellan and bullish percent charts to check equities market internals

The markets moved generally higher today, led by the Nasdaq with strength in semiconductors and biotech. GS was strong again today, although the financial sector indicated by XLF (financials ETF) didn't do as well. SWHC moved up well too (one of the few individual companies I'm keeping in my personal core portfolio), and so did our new friend, UNG.

The VIX was interesting to watch again today, as it retested under my 24.78 level again but moved back up to close above it once more. This has had the VIX bounce from the lower Bollinger Band, to the upper, and back to the lower again ... sometimes Bollinger Bands do act like rubber bands! I can think there looks like positive divergence in the indicators, and I can reference the articles about VIX that I posted last night. But what it comes down to, is what will the VIX do tomorrow, and we'll just have to get there to see it and know.

I've posted the bullish percent charts below, for SPX and NDX. These charts represent the percentage of stocks in these indicates that have bullish P&F charts using the default P&F calculations of Stockcharts.com. You can see that this graphically shows the difference in relative strength of the Nasdaq, in that its bullish percentage is much higher than that for the SPX (73 versus 54). Personally I find it quite interesting that the BPSPX bounced from its own 200-day moving average. I always like to see moving averages, even for technical charts like these, since they prove useful even when you don't expect it.

Also below are the McClellan charts, courtesy of DecisionPoint.com via Stockcharts.com. As usual, I placed on some markings - I don't have so much time this evening to chart and comment, though I sure wish I did because of the market movements so notable this week. The Nasdaq is not far from a Fibonacci level I've got for it at 1912, although there certainly can be other important levels to watch in that index. There's even an unfilled gap on that chart from the 2008 decline, so I did mark that gap again - will it get filled? Too soon to say, in my humble opinion - the answer will say a lot about market strength, of course. One note of caution comes from the Nasdaq McClellan Summation Index, which still did not make it above its zero line - it's at -27.60, even though it rose 38.83 today. So while trying to remain unbiased! I do have to ask, with this thrust upward of the markets and the Oscillator from the patterns that we've been seeing, will this have lasting power or will these levels also meet resistance before being able to establish that the bear market rally has much greater staying power than we thought just a few days ago?

Answering that from a technical perspective will require seeing the VIX' reaction from here, whether it can mark a low or get ensnared again (maybe even revisit Bill Luby's "plateau" idea); and the technical strength of market internals charts like these of course.

And something else I keep my eye on, although my limited time now doesn't permit me to post all the charts I would like - the currencies, gold and oil - so close to changing course to confirm bullish risk-taking and bullish equities, but unless I'm missing something there, not seeing actual confirmation ... yet. The market may have a few tricks up its sleeve. So just as the market taught us all not to get wedded to a bearish position, let's not turn around and get wedded to a bullish position either. It's okay, and at this point really a very good thing - to step back and adopt a "show me" attitude, either way.