Technical Analysis: Downtrends Hold Sway
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The Nasdaq (first chart below) once again failed to clear its downtrend line, which should be at about 2056 tomorrow. If the index can clear that line, 2079 and 2088-2095 are next. Support levels are 2027-2030, 2020, 2010 and 2000. The S&P (second chart) is also struggling at its downtrend line, which will be at about 1142 tomorrow, with 1147-1150 the next resistance levels above that. If that's a bearish rising wedge forming on the S&P, it could retest the recent lows - which we've suggested is a possibility because of the poor internal condition of the market. Support levels are 1132 and 1126. The Dow (third chart) is another index that can't take out its downtrend on a closing basis. Resistance is 10,500 and 10,570, and support is 10400-10,420 and 10,332. Thursday's GDP report will likely be strong; it will be interesting to see if the report gets bought on its strength or sold on inflation fears.