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Technical Analysis: Another Day Of Indecision

Ah, the beauty of an unchanged day; not much new to say from Friday. The battle remains the same: new money inflows versus very motivated sellers. Which side will win? If selling pressure picks up, supply could easily overwhelm demand at these major resistance levels. One problem for the bulls is that any spike in the market produces an equity-only put-call ratio in the danger zone below .50. That limits upside and increases the odds that the current stalemate will resolve to the downside. The Dow and S&P (first and second charts below) put in dojis, or indecision candlesticks, for the second straight day. A third straight day of dojis tomorrow would create a bearish "tri star" pattern (the Nasdaq 100's October low was a bullish tri star pattern). Resistance is 8919 on the Dow and 937 on the S&P, and 8580 and 908 are critical support. The Nasdaq (third chart) has elements of a bearish rising wedge. A break below 1440 tomorrow would be a negative, although the 200-day moving average at 1430 could provide support. A close above 1450 could be short-term bullish to 1500-1520.

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