Market Monitor Update, Tuesday, 03/31/2009 12:40:35 PM EDT
by Keene H. Little
HAVING TROUBLE PRINTING?
NDX pushed above its downtrend line from last Thursday's high, dropped down for a test of it and is now trying to bounce off it. If it rallies further this afternoon we could see it close yesterday's gap with a push up to 1250.82 (currently trading near 1240). SPX's downtrend line is up near 805 (about 799 for ES). Last Tuesday's low was also near 805 so look for resistance at this level if it is reached today. Otherwise the 30 and 60-min charts are hinting of a rollover this afternoon (now bearish signals yet, just warnings).
I was looking over the VIX daily chart and wanted to point out one possible pattern that could be playing out. Since January it looks like a bearish consolidation pattern (which would be bullish for stocks). It looks like a descending triangle pattern which ideally needs one more leg up inside it to finish the wave count for the triangle (as depicted on the chart). This could coincide with a drop for the stock market to a minor new low this month and then start a multi-month rally this year. It's a pattern I'll be watching closely for more clues in this regard.
VIX daily chart: