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Technical Analysis: 90% Downside Day

About the only good news today is that volume was significantly lower than it was on Friday. Otherwise, the technical developments were all negative. To begin with, today was a 90% downside day on the NYSE and Nasdaq, a sign that the bullish 90% upside day of a week ago could be negated. However, as we said after the first 90% downside day two weeks ago, a strong rally can follow a 90% downside day, so it's possible we could see more upside. The Dow and S&P (first two charts below) fell back below the critical support levels of 8250-8300 and 870-875, which are now resistance. Support is 8076-8131 and 7931-8000 on the Dow, and 859, 852-853 and 843 on the S&P. The Nasdaq 100 and the Nasdaq (third and fourth charts) put in nasty "evening star" reversals today, a pretty reliable pattern that has marked a lot of tops in both indexes over the last three years. The Nasdaq also fell back below its December downtrend line, a double whammy. Critical support is 1353 on the Nasdaq and 1020 on the NDX, and resistance is 1378 and 1390-1392 on the Nasdaq, and 1064-1069 on the NDX.

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