Technical Analysis: One Small Ray of Hope
Page 1 of 1
The best hope for bulls here are a couple of signs that sellers may be running out of steam.
The NYSE advance-decline line (see first chart below) remains above its November and August lows, and the number of new lows on the NYSE plunged from 750 Wednesday to 216 yesterday and didn't expand today despite another big down day. If they can continue to dry up say, under 100 before new highs expand considerably, we could see a bottom begin to form.
And despite the doom and gloom, note the performance of the banks (second chart) today.
All in all, a few glimmers of hope, but they all need to develop further if the market is going to form a bottom here.
The major indexes (charts three, four and five) continue to hold their August lows, if not by much.
We continue to key on 1360-1370 on the S&P as critical support for the bulls here, while a move above 1430-1435 and 1442 would be a good start to the upside.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association.