Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Tuesday, May 17, 2011

Market Technicals Lean Toward a Good Rally Wednesday 5/17/11

Stock Market Technical Analysis

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A broad list of market intraday and daily chart technical indicators reversed at 1:30pm this afternoon shifting the bias to the bull camp for tomorrow.  In the lower VIX chart, the VIX broke out of it's brown channel but quickly reversed back into it closing well down close to the blue line.  This will be considered as a successful test of that channel line.  In the upper chart of the SPY, today's candle is a hammer reversal candle also positioned on the lower line of the pink downhill channel which would easily lend to a rally to the upper pink channel line over the next couple of days.  If the market is going to be pushed up tomorrow, I am expecting some sort of good economic data surprise to show up on the news wires in premarket.  If we rally in the morning the real test will come when the VIX candle drops down to the blue line which will be laying right on the lower line of the red uphill VIX channel which would cause an explosive lift into an afternoon rally if the VIX breaks down thru both the blue line and lower red channel line.
Alan