Technical Analysis: Volume Dries Up
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A sell-off on lower volume on Friday, and a rally on even lower volume today; this market can't make up its mind. By the end of the week, with the ISM survey on Thursday and the unemployment numbers on Friday, the market may pick up both volume and conviction. The Dow (first chart) has had a hard time establishing a lower support line, but resistance is clear: 8525. A close above that could give the market room to run. Support is 8325-8350. The S&P (second chart) has resistance at 920 and 925, and support at 906 and 893. The Nasdaq (third chart) has resistance at 1468 and 1475-1485, and support is 1410-1415. The Transports (fourth chart) look good - but they are very overbought and at resistance. Puts at 27 and below on the QQQ continue to support the market, but leading names like Microsoft, Dell, Cisco and Intel are all above Max-Pain, with calls outnumbering puts, so options sentiment appears mixed. The VIX, the options volatility index (fifth chart), has slowed its decline but has yet to turn up.
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