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Technical Analysis: Surprising Strength

After a poor start to this rally attempt, the market put together some surprising strength today. About the only negative we'd note is that volume was lower on the NYSE today. The question now becomes whether first-of-the-quarter inflows can translate into continued strength. Option traders continue to show surprising caution here, which continues to support the market, but the VIX, the options volatility index (first chart below) hit new multi-year lows today, a possible negative divergence for the market. The S&P 500 (second chart) closed the week right at major resistance; it wouldn't take much upside at all next week for a major breakout. Support on the S&P is 1130, 1125 and 1118.5-1120, and resistance is 1135, 1140 and 1146. The Nasdaq (third chart) gapped over resistance on the open and kept running. Support is 1933 and 1926, and 1960-1965 is major resistance. The Dow (fourth chart) has resistance at 10,229-10,237 and 10,300, and support is 10,140 and 10,112.