Technical Analysis: Markets Settle Down
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Have we finally purged fear about the credit markets? The market finally settled down today, but we wouldn't rule out a low-volume retest of last week's low at some point, perhaps a higher low. Certainly after the run-up off Thursday's low, some sort of consolidation would be healthy. Also important will be the quality of any rally from here failure to make significant headway over the next month or so could open the possibility of another leg down in October.
The Dow (first chart below) faces tough and important resistance at 13,200-13,300, and support is 13,000 and 12,850-12,900. The S&P (second chart) faces tough first resistance at 1455, with 1470 above that. 1427-1429 and 1416 are support. The Nasdaq (third chart) faces tough first resistance at 2525-2531, and support is 2500, 2487 and 2460. Bond bulls (fourth chart) don't seem to be quite done yet.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association