Technical Analysis: Bulls Get Tested
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After struggling at their downtrend lines the last few days, the major indexes appear headed for their first big test since the rally began last week.
Part of the problem for the bulls here is the lack of buying pressure that could cement a low. Without that, volatility, including a retest of the lows, remains a possibility.
The Nasdaq (first chart below) managed to clear its June downtrend line before giving it back the last two days. The next support levels are 2250 and 2200, and 2280 is major resistance if the bulls can turn it around tomorrow.
The S&P (second chart) managed to clear its downtrend line today even while closing slightly lower. Support is 1253, 1240 and 1234, and resistance is 1267, 1277, 1292 and 1304.
The Dow (third chart) faces resistance at 11,560 and 11,634-11,750, and support is 11,400, 11,200-11,240 and 11,123.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association.