Technical Analysis: Techs Take the Lead
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The Nasdaq (first chart below) finally broke above 2471 with a little conviction today. 2481 and 2471 should now be support, and 2500-2509 is the final hurdle for the techs to resume their uptrend. That said, despite today's significant outperformance, the techs still lag the rest of the market by a significant margin (see Gerald Appel's 10-week Nasdaq-NYSE relative strength indicator in the second chart). The Dow and S&P (third and fourth charts) appear to be what's really governing market action; as long as those three-month rising channels hold, gains will be solid but choppy. The pattern is in keeping with other years following strong mid-term years (1950-1959 and 1982-1987); the market should hold up well into mid-year if the historical pattern holds. The Dow faces resistance at 12,725, and support is 12,630, 12,614 and 12,543. The S&P is pushing its upper trendline a little harder here. Resistance is 1454 for tomorrow, and support is 1443, 1441 and 1435. The 10-year yield (fifth chart) has pulled back sharply, but has reached some support here.