Technical Analysis: Another Day Above 10k

The market’s resilience in the face of mixed economic news the last two days is positive. Also on the plus side, the equity put-call ratio remains above the .45 danger zone despite “Dow 10,000” headlines on front pages everywhere this morning. However, we’d note a few negatives here. First, the Nasdaq rally has occurred on falling volume so far, suggesting that for techs, it could be a bounce in a downtrend. Second, new highs remain far from their recent peaks, while new lows are higher than their recent lows, a negative divergence when the Dow and S&P are making new highs. And third, the Nasdaq and NYSE TRIN readings both ended today at 1 or higher, which suggests that significant volume is going into declining stocks. The Dow and S&P (first two charts below) are firmly overbought here. 10,050-10,060, 10,100 and 10,200-10,250 are resistance on the Dow, and support is 10,026, 10,000-10,008, 9976, 9950 and 9900. The S&P (second chart) closed right at its recent high. Next resistance is 1083-1093, and support is 1071, 1067, 1064 and 1058-1060. The Nasdaq (third chart) closed at 1950 resistance. Above that is 1955, 1958-1960 and 1967-1972, and support is 1940-1942, 1935, 1930 and 1915-1920.

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