SPX Daily Chart - 19 April 2011

     A couple of developments on the daily chart. First off, price has held the long term (green) moving average. While holding this support a bullish divergence has formed between the RSI (top panel) and the Composite Index (second pane). With this technical signal in place it does not surprise me to see a pop here. The question is whether it is the start of a new rally phase.
     If I assume that the TD Supply Line (downsloping red dashed line) will be qualified at the open today, I can make a projection to about 1337.5 which is marked on the chart in brown. What makes me think a triple top in that area is possible is the REI as shown in third pane. This indicator has been in an oversold position for more than six sessions. When this occurs the market usually needs to pop up, relieve the oversold condition, and then come back into an oversold position for less than six periods before any rally can get underway in earnest.
     In any event, my parameters for turning bullish on this time frame have been set for quite a while now - a qualified break of 1341.59.
     Bottom Line: The daily chart remains in a bearish mode (since Feb.22) with my allocation mix meter at a +50% reading.