A tale of two regressions

Last night I was so uncertain I didn't even attempt making a daily market call. Turns out the Dow went up another 145 points. Where it ended is important. This number, 12,189 (blue line) is exactly the highs from our earlier rally this month. It was also support for the April lows and even the early March consolidation we saw.

I see three things going on here. First is it looks a lot to me like we have put in a double bottom this month, and that is a bullish reversal indicator. It remains to be seen if we can break out above the 12,189 resistance line to confirm that.

Second and third are the two regression trend channels on this daily Dow chart. We exited the first, shorter one eight days ago. We saw the bullish setup, and then the trigger, and we have indeed since gone higher. Now look at the other longer RTC going from May 2nd. Today we closed convincingly above its right edge. That is a bullish setup. If we can close outside the channel tomorrow, that will be a bullish trigger. That makes two bullish technical signs.

Meanwhile the weekly chart is also still looking bullish with the RSI and stochastic both having bottomed off highly oversold levels. There's not much guidance from the VIX tonight, having fallen into the middle of its Bollinger band range.

The futures meanwhile have been sagging a bit into the overnight and are now down about 0.2% at 1:30 AM EDT. ES is at 1291.75 which puts it in striking distance of tomorrow's daily pivot of 1287. That's tonight's key number, if we do go lower into the night and bounce off the pivot, things are looking good for tomorrow. But if we go through the pivot, then watch out.

After two days of such large gains (and note the declining volume there), I'm not at all sure that we can sustain this momentum into tomorrow, but I'm thinking we have a good shot of ending the week higher. Note that the week ends on July 1st, and that is a historically bullish day.