Technical Analysis: Approaching Oversold
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It won't take much of a down move tomorrow to get the market into oversold territory. If it closes there, good news from Microsoft tomorrow night could get bought. The CBOE equity put-call ratio is finally showing a little fear, not as much as we'd like, but it's getting better. So far this pullback has been met with more complacency than other corrections since the March lows. That could change tomorrow, but if it doesn't, the top may be in for a while, and with potential broadening tops forming on the indexes, that scenario is a distinct possibility. On the other hand, a good spike in fear tomorrow could be a good set-up for Microsoft's earnings report. Jobless claims will be reported at 8:30 a.m. tomorrow, the last economic report this week. Microsoft's chart (first chart below) is pretty neutral here, with resistance at 29.43 and support at 28.80. That could be a bullish ascending triangle, but the stock is closer to overbought than to oversold, which potentially limits upside. The Nasdaq (second chart) has support at 1890, 1860 and 1840, and resistance is 1920-1923. The S&P (third chart) has support at 1025, 1015-1018, 1010 and 1000, and resistance is 1035-1040. The Dow (fourth chart) has support at 9500 and resistance at 9700.