Pointillism is a form of art whereby the painting is started by one dot on the canvas. With each successive point, a picture comes into view and when complete, the subject is not just a bunch of dots, but a composite that is easy to comprehend. The masterpiece at left, “La Parade” is by Georges Seurat, the father of Pointillism and oddly enough, someone who symbolizes my perspective on stocks.

Many people look at the market by first evaluating the indices and taking a look at the charts of the Dow, Nasdaq and S&P 500. In my opinion, that view is very limiting and once those images are established, your ability to see the fine details and contrast becomes very difficult.

Every week, I look at over 4000 individual stock and ETF charts and like Seurat, I start with a blank canvas. One by one, a chart becomes an individual dot - some green, some red, and all the shades that you can make from each. At the end, I look at the resulting picture and that is how I form my opinion of the market.

On its surface, last week’s action seemed very bullish. I’ll give you that. Just throw enough hype at Dow 13,000 and keep saying how wonderful earnings season is going and you might be convinced this upward move is never going to end. Once you take the first look at a Dow chart, the bullish view is etched in your brain and I know it’s tough to avoid that temptation. Just remember that each index is a composite of individual companies, not the monolithic piece that gets all the attention. Sometimes the Pointillist stock market is consistent with the big picture view, and other times it isn’t.

When I started my work this weekend, I confess that I was expecting to see a bullish impression at the end, but that is far from what resulted. Last week, HEDGEfolios had 2367 UP signals and will all the happy talk, you might believe the majority of them advanced from Monday’s open to Friday’s close. In fact, only 51% headed higher and of those, I spent a lot of time analyzing 617 UPs for possible signal changes. Not only is that an extreme number for any week, but it was not consistent with the excessively bullish tone in the media. I saw a lot of the positives reflected in many of the charts - don’t get me wrong - but there was this weakness hidden in the details that I cannot ignore.