Technical Analysis: Dow, S&P Stage Low-Volume Breakout
Page 1 of 1
The Dow (first chart below) and S&P (second chart) both broke out today, but there are a number of reasons to remain wary here. Volume and new highs have yet to expand, showing a hesitance to pay higher prices and buy breakouts. The equity put-call ratio closed at a very low .44, and the VIX, the options volatility index (third chart), is about 1% from its August low while the Dow and S&P remain far from their August highs, both signs of complacency creeping in. The Dow seems to be the weakest of the indexes, forming what looks to be a bearish pennant on declining volume. 8550 is important support on the index, and a move below that could target the critical 8300 level. 8606 and 8640 are resistance. 917 and 925 are resistance on the S&P, 905-907, 900 and 895 are support, and 873 is critical. The Nasdaq (fourth chart) must clear its August high at 1426.76. 1400, 1380 and 1370 are support.
Don't miss the Company of the Week - every week - at http://www.wsrn.com/COW/.
Special report: For a free introduction to technical analysis and chart patterns, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.