Bulls versus Bears

Although the market remains in a downtrend that began late last year, today saw a nice upward move in the S&P 500 Index by advancing nearly 3%. This is certainly indicative of a market that had become very oversold.

(click on chart for larger image)

It would be nice to see higher volume come into the market to provide some confirmation of a firmer advance on days like today. On July 15 the S&P 500 Index hit 1,214 and has since advanced over 5% to 1,284. It appears the next critical level will be around 1,300 at which point the index will reach its 50 day moving average.

The chart below shows the % of S&P 500 stocks trading above their 50 day moving average and July was a short term low at 12.02%.