Pre-Market:

Good Morning! It looks like we might be off to a slightly downward start at open this morning, with futures down and international markets mixed at 5:17 AM. This is supported by my 23 to 35 bullish to bearish candle indicator. However, don’t let that discourage, I have scoured the market summaries, oscillators, and bullish percent indices, and I see a strong bullish trend in the market as of now.

Remember, yesterday I said something big was getting ready to happen, and I thought it would probably be bullish. Well, yesterday we had a convincing healthy increase of over 2% in all the major indices across the board.

All major US sectors were up in the bullish percent index (BPI) readings except energy. In particular, the NASDAQ (59.21%), Consumer Discretionary, (61.92%) and Finance (64.56%)  each showed healthy BPI ranges below 70% (meaning they are not pressing upper bounds for a possible reversal).

Yesterday, we had 423 bullish MACD crossovers to 16 bearish MACD crossovers. A bullish MACD crossover often signals further appreciation.

Further supporting evidence comes from my chart pattern index (CPI) showing 95% bullish, with high reading of 1,707 NR7 patterns (seven day tight range trading patterns) waiting to breakout.

Just a little more optimism: yesterday the VIX declined 4.3 %, and the VIX and S&P often move in opposite directions. Furthermore, the McClellan Oscillator is the healthiest looking that I have seen it for a while (see the chart below):

Yesterday we  had 1054 to 68 parabolic SAR buy signals registered . If you are not familiar with this indicator, you may want to familiarize, it could help you chart your entry and exit points for stocks if you employed it properly.

Developed by Welles Wilder, the creator of RSI and DMI, the Parabolic SAR sets trailing price stops for long or short positions.

It is also referred to as the stop-and-reversal indicator. SAR is more popular for setting stops than for establishing direction or trend.

If the trend is up, you should buy when the indicator moves below the price. If the trend is down, then you should sell when the indicator moves above the price. Wilder recommended establishing the trend first, and then trading with Parabolic SAR in the direction of the trend.

Here is an example of a parabolic SAR below:

Parabolic SAR indicators are showing that just about all the major international markets are a buy now. I look at this as a healthy indicator for the US market, since it is my conviction that the US will follow these markets into further recovery (sorry, it’s no longer the world leader it once was).

All of the international ISHARES  (see chart below) had parabolic SAR buy signals yesterday:

If you want further evidence I could show you candle glance charts of all the major international markets, showing all international markets/exchanges except the NIKKEI have bounced back above their 20 and 50 day moving average trend lines.

Talk of international bubbles persists, and I’m monitoring, but I don’t see that as a threat as of now.

It’s getting to be winter; the bears need to hibernate for a while.