Technical Analysis: Another Day Of Dojis

Another day of dojis, unchanged candlesticks reflecting indecision on the part of traders, and who can blame them? With a ton of resistance and calls overhead, and just as many puts below, the market is truly trapped in a trading range here. The Dow (first chart below) continues to look like yesterday’s false breakout above 8522-8525 marked exhaustion. Support is 8360-8400. The S&P (second chart) continues to look like it is “wedging out” to end this rise, with resistance at 925-930 and support at 909-910 and 897. The Nasdaq (third chart) has support at 1459, 1435 and 1420, and 1485 is resistance. The banks and Transports (fourth and fifth charts) continue to look vulnerable, but also continue to hold up. This morning’s high opening equity put-call ratio readings emboldened traders to buy the dip, but the combination of the high TICK and TRIN on the bounce suggested distribution. The only thing we can see supporting the market here is the high number of QQQ puts at 27 and below. Other technical signs at these levels suggest a top.

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