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Technical Analysis: Blue Chips Take the Lead

One caution sign appeared today — despite the solid gains for blue chips, market internals even on the NYSE were decidedly weak. We'll see how the next few days pan out, but selective buying can kill a rally, particularly when the buying is concentrated in the safest issues. The Nasdaq (first chart below) seems to be having a little trouble at a rising resistance line and its five-year high of 2375. 2390-2400 is the next resistance level above that, and 2350 and 2328-2333 are support. The Dow (second chart) is pushing its spike highs from 2000 and 2001 at 11,350-11,426. On the monthly chart, 11,200-11,250 looks like an important level to hold. The S&P (third chart) is pushing its May 2001 high at 1316, and support is 1300-1303. Long bond yields (fourth chart) continue to hold above 5%.