Technical Analysis: Dow Holds Support

The Dow (first chart below) held its lower trendline beautifully today. That line – at about 9050 for tomorrow – is critical support for the market. 9100 is first support, and above 9200-9250, the Dow could run. The Nasdaq (second chart) climbed back into its channel today; a nice reversal. Now it needs to hold 1700 support, although 1690 and 1680 are possible supports below that. 1727-1747 is one big resistance zone. Also in that Nasdaq chart, note how a combination of an oversold 5,3 stochastic and an RSI of 50 has been worth a good bounce – or more – the last five occurrences. The S&P (third chart) faces resistance at 990, 993 and 998-1002, and support is 979, 976 and 962. Put-buying continues to support the market, and it could continue to provide support for the next month or so, with August puts greatly outnumbering calls at 31 QQQ and below. However, September and October are wide-open at this point, with little in the way of open interest, so we’ll be watching to see how the post-August expiry picture develops.

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