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Technical Analysis: Major Resistance Looms

Quite a reversal today, especially considering the bearish set-up heading into today. When today's gap down didn't hold, that was a sign the market was headed higher. But now the indexes must overcome major resistance. Dead ahead are 954.28-957 and 965 on the S&P (first chart below), and 8931.68 on the Dow (second chart), the November 27 closing high. A close above 8931.68 and the Dow would give a Dow Theory bull market signal by some interpretations. Compared to those levels, Nasdaq 1600 (third chart), the Nasdaq's main bear market downtrend line, is minor resistance. Today's equity put-call ratio was too complacent at .43, but the internals were solid. The indexes should now want to hold their recent highs of 946-948 on the S&P, 8742-8743 on the Dow, and 1548-1552 on the Nasdaq. Finally, as a bonus, a potential bullish ascending triangle in Rambus (fourth chart) if it can close above 17.

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