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Technical Analysis: Consolidating At The Lows

Considering the lack of a bounce since Monday's big sell-off, the indexes are likely consolidating at the lows, which means we could get another leg down to 8000 on the Dow, 846 on the S&P, and 1343 on the Nasdaq. If this is just a correction of the recent uptrend, that would be the likely place for it to end. The Dow and S&P (first two charts below) continue to struggle at the critical resistance levels of 8250-8300 and 870-875. Support is 8185, 8100, 8000 and 7931 on the Dow, and 862, 852, 846 and 841 on the S&P. The Nasdaq (third chart) is consolidating below its reversal gap at 1390-1420. It would have to take out 1425 to negate that bearish breakdown. The 1400 level has capped the index the last two days. Support is 1380, 1353-1360, and 1343. The equity put-call ratio is still relatively high (bullish) at .70 today, but the VIX, the options volatility index, continues to decline, so the sentiment picture is mixed. With puts predominating at the 25 and 26 QQQ strike prices, and calls leading at the 27 strike price, there is a lot pinning the market in this narrow range. Which way that open interest heads could have a lot to do with market direction for April.

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