Click on above image to enlarge
We got our first real day of improvement as I mentioned I was looking for last night. The market had a decent day today although the choppiness intraday is continuing. In the top row, right chart shows that the SPY is holding the lower line of the longterm thin line brown channel for the third day. On the left chart of the top row, the SPY will either have to break out of the downhill pink channel and be free to run in the brown channel or the pink channel will force the price down out of the brown channel. This is called a forced channel switch and it's not done until it's done. In the second row, the VIX opened at the underside of its upper brown channel line and quickly broke down through its uphill red channel causing a nice morning rally and in the afternoon dropped below the blue bull/bear line triggering a second rally that was short lived as the VIX quickly rose back up and closed right on the blue line leaving it positioned with a neutral bias for tomorrow's open.
In the lower chart, the UUP (dollar) caused a lot of concern today as it is also closed in a neutral bias if not slightly upward biased. We are certainly not out of the woods yet but if we get one more day of modest improvement it might be enough to establish an upward direction for a while. The only problem is the jobs report in the morning. If it is bad news, all bets are off.
Alan
