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Technical Analysis: Still Waiting

The indexes continue to consolidate below short-term support, so the near-term risk remains to the downside, and the weakest month of the year lies just ahead. That said, it would take a move below 11,250 and 1281 on the Dow and S&P (first two charts below) to raise the possibility of a deeper pullback here. The Dow is also sitting just above its uptrend line here, so the bulls have some support in this vicinity. For the Dow, 11,340-11,350 and 11,384 are the levels to beat to the upside. 1289 and 1287 are the first support levels on the S&P, and 1300-1302.5 is resistance. The Nasdaq (third chart) is holding important gap support at 2115-2125 (2120) nicely. A move above 2150 on the index could begin to attract buyers. It's worth noting that Gerald Appel's 10-week Nasdaq relative strength indicator has yet to generate a buy signal (fourth chart). And finally, bond yields (fifth chart) are threatening to take out their 200-day average here, more evidence of a slowing economy.