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Technical Analysis: Don't Blink

If you blinked today, you missed the correction. Nice recovery off the lows today, although a plunging VIX (options volatility index) and a very low equity put-call ratio should give the bulls some pause here. The Dow (first two charts below) is heading into major resistance at 10,673, the 2002 peak. That should be formidable resistance; if the index can clear it, 10,800 is next. 10,600 is first support, and 10,500 is important. We would note one negative on that Dow chart: falling buying pressure (+DI) as the index is rising, a negative divergence. The S&P (charts three and four) took out the important 1147 area. Could it be set up for a run at the important resistance level of 1170-1177? 1140 is first support, and 1132 and 1127 are important supports. The Nasdaq (charts five and six) faces major resistance at 2150-2163, and supports are 2128-2130 and 2114-2120.