The S&P made new bear market lows today on the news that the House rejected the bailout plan. This new low gives us the opportunity to examine some technical indicators for evidence that the market's technical condition is not as bad as it seems at first glance.
As you can see from the first two charts above this post, both the 5 (purple line) and 10 day(red line) moving averages of the daily advancing issues number for the NYSE are higher than they were 10 days ago at the September 18 low at 1136. This is a bullish indication and I think it means that these markets are about to rally.
Looking at longer term divergences we see from the second chart from the top that both the 20 day moving average and the daily readings of the number of S&P 500 issues trading above their 50 day moving averages stand well above the levels reached in July at the 1200 low. The 10 day moving average of the advancing issues number also stands above that low. Finally, the 20 day moving average and the daily count of the number of S&P 500 issues trading above their 200 day moving averages (top chart) is above its January, March, and July lows. This shows a market which is gathering strength for a big move to the upside.