Nothing to glean from today’s action: doji candlesticks (no change on the day) on declining volume reflect indecision, which is to be expected after yesterday’s big up day. A down day on Monday would suggest that a pullback could be coming, while a 2% gain in higher volume next week would confirm the rally attempt. So without much new to report today, we’ll return to yesterday’s 90% upside day on the NYSE. Since 1960, there have been 12 isolated 90% upside days (more than a month after a 90% downside day), according to Paul Desmond’s award-winning work at Lowry’s Reports. Of those 12 occurrences, four went on to become major rallies (1970, 1982, 1984 and 1991, the latter two after long basing periods). The other eight either marked a top, or occurred within 3-7% of a top, so the odds favor a grind higher to a top, perhaps later this month. The levels to watch remain essentially the same as yesterday: The Dow (first chart below) has support at 8550, 8500 and 8400, and resistance at 8700 and 8750-8800. The S&P (second chart) has resistance at 911-915 and 925, and support at 900-902, 895 and 885. The Nasdaq (fourth chart) has resistance at 1391-1400 and 1426, and support at 1375 and 1347-1350.
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