Is the Market Due for a Modest 'Right Shoulder' Rally?

With all the grim economic news out of Europe and China and the disappointing U.S. jobs report released Wednesday, it might seem counterintuitive to expect the stock market to rally. But there are three technical reasons to suspect the market will muster a modest rally in the next few weeks.

* The VIX "fear index" is flashing an extreme of negative sentiment, which usually signals that the market is at a bottom.
* The "head and shoulders" chart pattern many see hasn't really completed the classic form.
* Time symmetry suggests another rally into mid-July.

These all may sound like obscure and overcomplicated reasons to expect stocks to rise under current conditions, but read on for the analysis. (more)