Today's rally may not have been in the cards. But it was in the technical indicators, according to those who believe in their prognosticating prowess.

A confluence of indicators suggested a substantial rally was likely today, Jordi Visser, head of hedge fund sales at Morgan Stanley, suggested in a note to clients before the market opened this morning.

Specifically, he noted:

The 17 previous times the S&P 500 was down six days in a row -- as it was prior to today -- the index rallied the next trading day 14 times;

The S&P 500 had technical support at about1051-1061, which represents a roughly 50% retracement of the 233 points the index gained from its intraday low on Sept. 21 to its intraday high on Jan. 7.;

The CBOE Market Volatility index was up six days in a row before falling 10% to 23.51 today, suggesting some rise in fear among market participants;

The 1-day Arms Index rose above 2.40 Monday (and was above 2.0 on Friday, a rare back-to-back occurrence for the index, which measures the ratio of advancing issues to declining issues by the ratio of advancing volume to declining volume.);

The 9-day relative strength index (RSI) closed at 22 Monday and the 5-day RSI at 11. (For more detail on the RSI, go here.)

Going back to the 1987 crash, the S&P rallied eight of nine times following a session in which the 1-day Arms was above 2.40, the 9-day RSI was below 25 and the 5-day RSI below 15 -- with an average gain of 4%, Visser wrote. "With all the reasons above and the fact that the two-day period of the last day of April and first of May has been up the last 12 years, I would look to buy early weakness and use 1050 as a stop."

There wasn't much early weakness today as the market jumped after the 10 a.m. release of some less-weak-than-feared economic data, as

reported earlier. Major averages were unable to sustain their intraday highs but still posted solid gains.

The

Dow Jones Industrial Average

closed up 1.3% to 9946.22 after trading as high as 10,006.28. The

S&P 500

gained 1.1% to 1076.92 vs. its intraday best of 1082.62, while the

Nasdaq Composite

closed up 1.9% to 1688.23 after trading as high as 1697.03.

Market internals were healthy as well. Gainers bested losers 22 to 9 in NYSE trading where 1.5 billion shares traded, which is 17% above its six-month daily average, according to

Bloomberg

. Advancers bested declining stocks 22 to 13 in over-the-counter trading, where 1.85 billion shares were exchanged.

Those skeptical that a

decline

in both the consumer confidence index and the Chicago purchasing managers' index could have spurred those moves, consider the indicators mentioned above. Rest assured many institutional investors and traders were aware of them. Readers who believe technical indicators have no effect on the market should consider that if traders believe in and act upon them, there is causation.

Looking ahead, the rally signal issued by those indicators "gets more cloudy after this," Visser said in a follow-up conversation. "There's a higher likelihood of moving up from here,

but there's no magic to this stuff."

A key to whether the market can build on this rally is the level of skepticism which today's rally generates, Visser said.

"If after the first day people don't believe, that leaves room for a bigger pop the next day," he said. "My gut tells me a lot of people think this is nothing more than a short-term retracement from oversold conditions. People have accepted the market is in a downtrend and are willing to miss out."

From a contrarian standpoint, that is usually a good sign more gains are forthcoming, and such skepticism was expressed by one institutional fund manager, who requested anonymity.

"I suspect

today's advance is more technically driven -- a respite from the downward pressure over the last week," he said. "We've had a series of lower lows and lower highs, with periodic rallies that occur. My feel for the market is that we're becoming increasingly vulnerable."

Today certainly brought a respite for many big-cap names that have recently experienced withering selling pressure, including

Tyco International

(TYC)

,

Dynegy

(DYN)

,

AOL Time Warner

(AOL)

, and

WorldCom

(WCOM)

.

Another Man's Poison

Of course, for all the talk about how much fear and negative sentiment were in the market, some observers believe such sentiment remained fairly subdued throughout the recent decline, suggesting today's advance will prove fleeting.

"We are in the denial stage," commented Andreas Calianos, head trader at Semiotics Partners. "It's not that market participants are in love with stocks, it's more that they wish to deny that the bear market is not over. This is typical bear market behavior. Rallies can be fast and furious and ignite speculation."

Calianos, who works with Woody "

capitulation coming" Dorsey, noted there is "virtually no variation in the opinion that we are headed for a recovery," with the notable exception of Morgan Stanley's Stephen Roach (Semiotics Partners is not part of Market Semiotics, although Calianos does work with Dorsey).

"An increase in white-collar unemployment and a concurrent decline in consumer confidence and spending," will be the factors that turn consensus opinion toward Roach's

double-dip theory, Calianos predicted.

Of course, we did get a drop in consumer confidence for April, but the market was able to put a positive spin on that today. The unemployment report for April comes out Friday.

Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

Aaron L. Task.