Technical Analysis: The Market Turns Up
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The S&P 500 (first chart below) could potentially be forming an ending diagonal or rising wedge since the start of September, which is evidence for the Elliott wave theory that the rally could be in its final stages before a significant correction. Support is 1024, and resistance is 1032-1034 and 1045. A move that fails at that upper trendline - at 1045 and rising - would look bearish. A rally that blows through that, on the other hand, would look bullish. The Nasdaq (second chart) could potentially form the same pattern, with resistance at about 1920 and support at 1880. The Dow (third chart) could also form a rising wedge, with resistance at 9700 and support at 9500. On the plus side, there was a surprising amount of put-buying today, and internals remain strong, both supportive factors for the market.