It’s been wrong twice in recent years (2001 and 2003), so take it with a grain of salt, but the January barometer – the theory that January’s performance dictates the market’s direction for the year – says 2004 could be another good year for stocks. Keep your fingers crossed. In the short-term, the market has flirted with oversold levels for the last three days; if it wants to bounce, it has a chance. There hasn’t been the kind of fear we’d like to see, as evidenced by the low equity put-call ratio, so our guess is that the market may eventually have more work to do on the downside. However, the internals on both exchanges were positive today despite the red closes on the major indices, which we take as a sign of possible accumulation here. And with Monday the first trading day of the month, institutions will likely be putting money to work. The Nasdaq (first two charts below) has support at 2058, 2040 and 2000-2010, and resistance at 2080, 2100 and 2120. The S&P (charts three and four) has support at 1128, 1125 and 1121, and resistance at 1132-1134, 1140, 1144 and 1150. The Dow (charts five and six) has support at 10,417-10,438 and 10,350-10,368, and resistance at 10,540, 10,600 and 10,650.
