The Nasdaq (first chart below) put in a bullish island reversal today, gapping over a previous gap in the opposite direction to create an “island” at the recent lows. The minimum expected target for such a reversal would be the recent high at 1425. 1401 is first resistance, and 1368-1375 is support. The Dow and S&P (second and third charts) are once again back at the critical resistance areas of 8250-8300 and 875-880. 8380 and 886 are next resistance levels above that, and then 8522-8550 and 895-901 above that. Support is 8050-8100 on the Dow, and 858-862 on the S&P. The equity put-call ratio came in at a low .53 today, but still above the .45 danger level. More of a concern is that the QQQ, the Nasdaq 100 tracking stock, is approaching an area (27 and above) were calls greatly outnumber puts, so supply could overwhelm demand at that level.
Don’t miss the Company of the Week – every week – at http://www.wsrn.com/COW/.
Special report: For a free introduction to technical analysis and chart patterns, visit http://www.internetstockreport.com/guest/article/0,1785,2571_5/00051,00.html.