Maybe lower Wednesday but seven down weeks looking less likely

What a difference a day makes.  Last night I wrote "I do think we're going higher tomorrow.".  And did we ever.  The Dow gained 123 points and I had my best day of the year so far, up 1.58%.  The Dow's gain completes a truly classic morning doji star pattern, and this is one of the strongest bullish reversal patterns around.

It also brought us entirely outside the steep descending RTC from the start of June, strongly suggesting that this particular trend is now broken.  In fact, looking at the Dow daily chart, it looks like we're now more in a sideways consolidation pattern than a steep decline.  And at this point I'm willing to say that point "B" from my earlier post is now also off the table (where the RTC would hypothetically intersect the 200 MA).

In fact, the indicators are also quite bullish.  Right now, the stochastic, RTC, money flow and momentum have all bottomed and turned upward from their mega-oversold levels.  That's bullish.

Then we have the VIX.  Last night I said

As I've noted before, whenever [the VIX hits its upper Bollinger band], the VIX goes lower, most often the next day or a day later. That sort of reversal would also be bullish for stocks.

And sure enough that's exactly what we got today. The VIX gapped down, the market went up.

Now while this all makes me think that a seventh straight down week for the market is looking less and less likely, I'm not so sure that tomorrow won't be down. The futures are all down at 2:15 AM, with ES down a third of a percent. It may be that the profit-takers who showed up at 3 PM today will reappear tomorrow taking us back to the 12,000 area. I am impressed however with how well that 12,000-11,950 support level held up.

Tomorrow's daily ES pivot is 1284. We're just above that now. If we go through it, look for a lower close. I would not be surprised to see a 50 point drop tomorrow, but the call tonight is not nearly as easy as it was last night.