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In the upper chart the UUP (Dollar Index) it's easy to see that today's shooting star reversal candle meeting firm resistance at the green center line of the 5 month uphill black line channel.
In chart 2, the NASDAQ shows this morning's low not breaking the lower line of its 4-week uphill channel.
In chart 3, the TLT (bond ETF) met resistance at the center line of its long term channel which also stopped its run in late Aug as can be seen in that chart.
In chart 4, the SPY (S&P ETF) dropped through its lower line of its 4-week uphill channel but its recovery took us right up to the point where it could regain its thick brown line channel tomorrow morning.
In chart 5, the VIX (Volatility Index) shot up into its brown line channel at today's market low but could not hold it and fell well back down into its pink line descending channel into the afternoon.
All in all, we are set up nicely on many different charts to start a multi day stock rally here. However, once again be aware that when we are trading the stock market's leg up instead of the bond market's leg up we are always vulnerable to any bad economic news coming across the newswires especially in the premarket session. If we get a 3-day bad news vacuum that amazingly tends to happen right when the stock market is trying to start a new up leg, the stock market should have a nice move up for a few days. Most critical is tomorrow morning's premarket session, if we get bad economic news then we could have a nasty opening smackdown. Personally I am holding off on entering the SPY until I see we get past the first day's premarket without getting hit with bad economic news.
Alan
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