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Technical Analysis: Another Try At Resistance

Today was a strange day for internals (tracked in the Market Close). The advance-decline line and new highs/new lows were very positive, but upside volume was terrible for such a big up day. The reason? Four of the top 10 most actives - GE, Microsoft, Oracle and Sun - were down on the day. Keep an eye on the leaders. On the other hand, this cyclical bull market has had an amazing ability to absorb bad news even from leading stocks. The indexes continue to form potential bearish broadening tops (see charts below). It's possible they could break up, as happened in October 2001, but that's not the historical norm for the pattern, which requires volatility to form higher highs and lower lows within the same trading range. The Nasdaq faces resistance at 1940, with 1950-1960 the upper trendline of the pattern. 1920 is first support. The S&P faces resistance at 1049-1050 and 1055, and support is 1038-1040. On the Dow, resistance is 9800, and support is 9675-9686. One negative today was the equity put-call ratio, which just barely closed above the .45 danger zone after being very low early on.