Technical Analysis: Bulls Take Charge
Page 1 of 1
After two weeks of going nowhere, the bulls made an impressive move today, sending the market above resistance and escaping, at least for now, the threat of a complete retest of the November lows.
The S&P (first chart below) broke decisively above 850 resistance today, which is now important first support; if it can't hold, another test of 800 is possible. To the upside, the levels to beat are 883, 900 and 918.
The Nasdaq (second chart) faces its next hurdles at 1604 and 1652-1665, while 1500-1518 is now support.
The Dow (third chart) faces one tough resistance level at 8500. A break above that could give the index room to test 9000 once again. Support is 8225-8243.
And finally, two very interesting undercurrents: the banks (chart four) are gaining strength can they really be rescued without further shareholder dilution? while bond yields (chart five) continue to back up. Are we seeing market participants take on greater risk? Gold and the U.S. dollar are rallying too some very interesting cross currents at play.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association.