Technical Analysis: Rally Loses Steam
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The lack of follow-through to Friday's rally raises the possibility that the market may retest its recent lows, as buyers showed little conviction today. The Nasdaq (first chart below) faces tough resistance at 2582-2585, and support is 2566 and 2545-2555. 1516-1518 is tough resistance for the S&P (second chart), while 1500 and 1492 are support. The Dow (third chart) faces resistance at 13,500-13,530, and 13,380-13,410 is support. The 10-year yield (fourth chart) paused today, but the rise in interest rates has been strong. Inflation data due out at the end of this week will no doubt be watched closely.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association