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Technical Analysis: Selling Intensifies

Last week's back-to-back 80% upside days are sure starting to look like exhaustion after another 90% downside day today. It can take several such days of heavy selling spread out over some time to form a major bottom, according to the work of Paul Desmond of Lowry's Reports, so it's possible that the market could be in for some tough going for a while. The best all-clear signal at this point would be a 90% upside day closely following a 90% downside day. With the Dow (first chart below) just above the major support level of 11,030, we could get a quick answer tomorrow as to whether the market will break or bounce here. The next support levels are 11,000, 10,950 and 10,870, and resistance is 11,100, 11,200, 11,265-11,300 and 11,330. The Nasdaq (second chart) is faring somewhat better than the Dow here. Support is 2160, 2150 and 2125-2135, and resistance is 2185 and 2200. The S&P (third chart) is also faring relatively well. Support is 1260, 1255 and 1245-1250, and resistance is 1275 and 1281. Long bond yields (fourth chart) crept back above 5% again today.