Technical signs that a major top is in continue to accumulate, some of them ominously coincident with the autumn equinox and yesterday’s solar eclipse. On the S&P chart, MACD and relative strength indicators are flashing red, and support for Dow stocks is breaking down at the 10-day moving average.

So why am I cautiously bullish nonetheless?  Take a look at the chart below, because it contains some subtle, contrarian evidence that may be uniquely significant to Hidden Pivot analysis. Notice that last week’s highs slightly exceeded the price peak recorded in May. That created a bullish impulse leg of daily-chart magnitude, and its positive implications for the next few weeks or so will endure so long as the S&P does not soon plummet below the bottoms I’ve labeled #1 and #2.

Mind you, I’m not suggesting that anyone mortgage the farm to buy stocks at these levels. In fact, I lightened up myself on long positions at Friday’s close, selling shares or call options in Citi, Merrill Lynch and IBM, three of my high-beta favorites for playing whatever upside remains if there’s a short-squeeze blowoff in the offing. As I noted here a couple of days ago, a DJIA run-up to as high as 13045 is possible based on my technical runes.

If this is indeed about to occur, the reasons for it lie beyond my imagination, since it would be notwithstanding the evident, recent slippage of the housing sector and U.S. economy into incipient recession. Actually, I would feel relieved if the S&Ps were to plummet beneath lows #1 and #2 in the next 5-7 days, since that would square with the conventionally bearish technical picture, not to mention with my sense of reality. However, because last week’s highs exceeded May’s peak, I am obliged for now to treat any merely moderate decline such as we saw on Friday as prelude to one more thrust to new all-time highs.