Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Tuesday, May 24, 2011

Holding the line 5/24/11

Stock Market Technical Analysis
Click on above image to enlarge

Today was another day of sidways choppy trading in the market but bias has shifted slightly to the bull side as of this evening.  In the top row, the top left 120 min chart shows we are still holding the light brown line secondary channel and on the day chart just to the right of it we see that the longterm uphill thin brown line channel has held the lows for yesterday and today.  Dropping to the second row, the VIX opened below its upper brown channel line then dropped down to the blue bull/bear line and bounced part of the way back up but still closed well inside the upper brown channel line which is a definite improvement over yesterday.  Also in the lower chart, the UUP drifted downward today helping the overall picture of the markets. 

Even though we are basing here for two days on the longterm day chart lower channel line, the trading has been choppy and erratic mostly because traders are focusing on 15 and 5 minute charts.  The intraday plays are coming off of that which often contradicts what the day chart says which is causing the intraday chaos.  If the overall conditions in these charts can improve a little more tomorrow, we might be able to put together the start of a new leg up because the day chart 5ema is trying to bounce from its 50ema, a key reversal point in the big picture (sorry, I didn't get this chart posted tonight).

Alan