After strong rallies early in the day, all the major indices collapsed at the end.  It was still a much-needed gain, with the Dow Jones Industrial Average finishing higher by 100.75, the Standard & Poor’s up 14.94, and the NASDAQ increasing by 27.13.

In view of recent events, the finishing kick was more a limp than a show of strength.  Those looking for encouraging signs in the way the day ended are still searching.  The Dow Jones Industrial Average dropped more than 40 points in the last half hour of market action.  As the chart below shows, the recent trading for the Dow (DIA) and the S&P (SPY) has been very bearish.

So is the present sentiment, too.

Almost two-thirds of stocks are now trading below the 50-day moving average.  Stocks hitting new lows outnumbered those reaching new highs by a 2-to-1 margin, too.  With so many stocks below their moving average, that possibly demonstrates that today’s rally was a classic “dead cat bounce.”

The chart below reveals that there could be more bullish momentum ahead, but just for a short period.  But the 20-day and 50-day moving averages for the S&P are still far off from moving above the near converging levels.  Should the Standard & Poor’s 500 Index have its 20-day moving average fall below its 50-day moving average, that will be another bearish indicator for the trading community.

Interestingly enough, consumer confidence is still rising.  But a Gallup poll this week revealed that there are only 52% of Americans invested in the stock market.  That is down from 65% in 2007.  For the bulls, that means there is a lot of money and market participation still sitting on the sidelines.  For the bears, that means the individual investor has abandoned the equity markets after the lessons (and losses) of The Great Recession.