Technical Analysis: Bulls Get Confirmation
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We now have our second 90% downside/upside volume combination on the NYSE this month, adding to the case for a significant bottom here, as sellers have now been washed out twice only to come rushing back in to buy. The only note of caution here is that we are entering the weakest month of the year next week, but other than that, the bulls have made a strong case here.
The S&P (first chart below) still needs to clear 1470, 1480, 1488 and 1504, while 1458 and 1446-1450 should now be support. The Nasdaq (second chart) faces sellers at 2576 and 2595-2600, and support should be found at 2550 and 2531. The Dow (third chart) faces important resistance at 13,320, 13,400 and 13,450, and 13,190-13,200 is important support. Bond yields (fourth chart) may finally have reversed today.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association