Technical Analysis: Resistance Defined
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The S&P (first chart below) continues to struggle around its 2000 all-time high range of 1527.46-1552.87. This is one of the ways resistance, such as old highs or lows, works it's the "get me out, I'm even" impulse everyone who held an index fund through the downturn is now tempted to cash out. Given the extent of S&P 500 index investing, the market may need to struggle a while longer in this area before it can break through. The S&P has support at 1527, 1522 and 1515-1518. The Dow (second chart) faces resistance at 13,680, and support is 13,600, 13,560 and 13,500-13,520. The Nasdaq (third chart) continues to lead here, a plus for the market. Resistance is 2609, and support is 2592-2594 and 2576-2581. Bond traders (fourth chart) continue to price in growth, not a slowdown.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association