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A Two-Mode Market?

Wall Street slipped last week a major indexes bounced between gains and losses as investors are growing increasingly nervous about the outcome of this tight race for the White-House.

But with the consumer confidence in the U.S. up to levels not seen in nine years, there is optimism in the Street that the U.S. economy has found its footing on renewed traction to the upside.

Also, word has it that a deal was reached with OPEC that they would freeze production at current levels, and that sparked a sharp rally in crude-oil which in turn raised the risk-appetite in the cyclical sector of the market.

But already, this OPEC deal is showing cracks and it remains to be seen if this thing can hold together.

That's the kind of stuff that can get the market to be bullish one day and bearish the next.

Check the daily DOW chart [INDU] which reflects the market in a bearish mode. Here the Moving-Average lines configuration is bearish with the red line below the green line, while the RSI strength indicator and MACD momentum bars are sitting listless on their respective demarcation lines. There isn't much the bulls can do with a chart like that.

But flip the same chart into a weekly mode which shows the MA lines configuration extremely bullish with the red line above the green. Even though the MACD momentum bars remain bearish below the demarcation line, chart-watchers who note configurations like that re convinced that the bulls are gearing up to stampede.

(click to enlarge)

When you check the NASDAQ index [NDX] you'll note that the MA lines configuration remains bullish with the red line above the green and that the RSI strength indicator is also positive in its bullish territory.

But that the MACD momentum bars are still totally neutral on top of the demarcation line suggests that the NASDAQ and probably the market as whole have lost momentum to the up or down-side.

(click to enlarge)

The commodity market [GTX] remains overbought, topheavy and ready to keel over.

The mid-cap [MID] and small-cap [SML] sectors in this market are both turning bearish. The red MA lines of both indexes are slipping below the green lines, while the RSI strength indicators and MACD momentum bars remain neutral along the demarcation lines.

Not pretty pictures for the bulls.

The bullish percent index [BPS] is melting down with all of its components bearish and this is why the bulls in this game [SPXL] are losing their mojo.

Yet, the bears in this game remain stuck at the bottom and for as long as that is the case there is no bear market in sight. But with the bulls apparently losing it, there could be some sharp downside squalls ahead.

The consumer discretionary index [XLY] is rallying strongly in spite of a bearish MA lines configuration with the red line below the green. So what is keeping this rally going are the MACD momentum bars on top of the demarcation line.

But should these bars slip below this line, watch out down below!

With the yellow metal [GOLD] continuing losing its glitter, every component of this index is bearish.

OIL [WTIC] remains quite bullish. But that has nothing to do with increased demand, but with the rumor that OPEC will cut production. But with every component of the oil-index bullish, this oil-rally could rally on a bit longer.

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