Editor's Note: This bonus piece originally appeared on RealMoney earlier today. To sign up for RealMoney, where you can read Helene Meisler's commentary every day, please click here for a free trial.

The VIX, often described as the market's gauge of fear, has fallen below 30. How could it go up when the

S&P 500

is in exactly the same spot it was a week ago? If you took out the intraday prices and looked at the S&P on a closing basis only, it would look like a flat line.

On Monday, the market rallied early and then pulled back, closing well below the session highs and leaving many to wonder if the action represented

the

failure. Doesn't feel like it to me. And if people are asking, then it probably wasn't.

Positive developments, or mere perceptions, from Iraq aren't necessarily the stuff to build a sustainable rally from. For a sustainable rally, the market needs to be oversold. If anything, it's leaning toward overbought.

We also need the 30-day moving average of the advance/decline line to be oversold, which it isn't. The A/D is heading toward an overbought level and will probably be there toward the latter part of April.

Additionally, new highs should be expanding at a rapid rate, which they're not. In fact, during the higher intraday high the S&P made on Monday (904 vs. the previous 895), the number of stocks making new tops on the

New York Stock Exchange

was 109, compared with 117 on April 2, representing a negative divergence.

(For more explanation of these indicators, check out The Chartist's

primer.)

But none of this is outright bearish. There are still a few indicators that say the momentum isn't yet with the downside. For example, the 30-day A/D chart still has a couple of weeks before reaching the maximum overbought area, meaning there's still room and time on the upside.

The market needs to change its pattern of failing at S&P 900 (or

Nasdaq

1425) before we say something different is truly happening. For now, the averages still fail when they go up, but hold when they go down. That pattern needs to change; at least that's what the intermediate-term indicators are signaling.

Helene Meisler, based in Shanghai, writes a technical analysis column on the U.S. equity markets and updates her charts daily. Meisler trained at several Wall Street firms, including Goldman Sachs and SG Cowen, and has worked with the equity trading department at Cargill. At time of publication, she held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. She appreciates your feedback and invites you to send it to

Helene Meisler.