Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Wednesday, August 25, 2010

Bounce at June 8th low

click on above images to enlarge

Short blog tonight...In the upper chart cluster the VIX and the bonds are both still uptrending but may have a day or two of pause here if we can get some traction from the bounce we made this morning off the June 8th lows shown as the lowest red horizontal line in row 2 of the lower chart cluster.  In that particular chart the key test point if we are going to have a relief rally will probably come tomorrow when we get up to the lower blue channel line and possibly the upper black channel line.   We did break out of the 5 day downhill channel marked with the thin brown lines. 

Still looking at the lower chart cluster, we did print a quite bullish candle in  row 1 chart 3 on good volume as seen in volume bars in row 1 chart 1.  In row 3, the advance decline has passed the halfway point, the black line, on its way back to the sell area.  Looking at chart 4 row 1, we are starting to get modestly short term oversold because of the distance from this morning's low up to the red 108 EMA line.

All in all, we could easily get at least a small bounce here but any bad economic news could easily halt an up move as it has in the last couple of weeks.  We'll have to see...


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