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Technical Analysis: Stocks Hang On

The S&P (first chart below) found support today at its 50-day average and uptrend line today, a nice convergence of support for the bulls. The obvious question is whether the index can now take out its all-time intraday high of 1552.87, and the evidence for that remains mixed. This week's Investors Intelligence survey showed a 3-point drop in bulls to 53.3%, backing away from the 60% danger zone, but bears fell 2 points to a three-year low of 18.9%. All in all, another sign that the market may need a sentiment refresher before fall is over.

1525, 1533-1537 and 1540 are first resistance for the S&P, and 1507 is critical support. The Nasdaq (second chart) ended the day right at major resistance. Next up is 2635-2637, and support is 2595-2600. The Dow (third chart) has major support at 13,400, and 13,600 and 13,692-13,700 are the levels to beat to the upside. The 10-year yield (fourth chart) continues to perk up despite Monday's breakdown. And finally, the NYSE advance-decline line (fifth chart) continues to look like a negative divergence here.

Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association