RealTime IT News

Technical Analysis: A Glimmer of Hope

We'll look beyond the headlines today at a couple of positive data points. For starters, it could be just a one-week expiry-related swing, but we'll take comfort in the fact that commercial futures traders are once again long the big S&P futures contract. Also of note, while we've made much of the lack of strength in the NYSE advance-decline line (first chart below), the lack of a big move lower in the index today sets up a potential positive divergence, with the index making a higher low as the rest of the market retests its lows. Just a potential positive at the moment, but it so far is keeping the Nasdaq (chart two) on a firm buy signal under Gerald Appel's Nasdaq-NYSE relative strength ratio (chart three).

The Nasdaq has support at an uptrend line at 2577 and its 50-day average at 2566, and upside hurdles are 2600 and 2622. The S&P (fourth chart) gave up its uptrend and 50-day average today, setting up 1506-1510 as important first resistance. 1500 is first support, and 1488-1491 is critical. The Dow (fifth chart) has support at 13,325 and 13,250, and 13,450 and 13,520 are first resistance. The 10-year yield (sixth chart) turned lower today, but not enough to help stocks.

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