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Technical Analysis: Searching for a Bottom

We've had all the bearish sentiment we need for a bottom, but we still lack buyers to make it happen.

The bank sector (first chart below) continues to be the most important index here — and hopefully will find support here near its 1998 lows. It's the one sector we most need to see buying in.

The Dow (second chart) is sitting on top of a support zone that goes back to the 2000 peak. We expect the index to find support between here and the 2006 low of 10,670, since mid-term election year lows have held for at least a few years since 1934. To the upside, 11,500 and 11,634-11,750 are resistance.

The S&P (third chart) is hanging on near its March closing lows of 1273-1276. Below 1270, 1257 was the intraday low. To the upside, resistance is 1304 and 1315.

The Nasdaq (fourth chart) has a lot of support around 2256-2280. To the upside, 2330, 2350 and 2400 are the levels to beat.

Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association.