The Dow (first chart below) and S&P (second chart) both broke out today, but there are a number of reasons to remain wary here. Volume and new highs have yet to expand, showing a hesitance to pay higher prices and buy breakouts. The equity put-call ratio closed at a very low .44, and the VIX, the options volatility index (third chart), is about 1% from its August low while the Dow and S&P remain far from their August highs, both signs of complacency creeping in. The Dow seems to be the weakest of the indexes, forming what looks to be a bearish pennant on declining volume. 8550 is important support on the index, and a move below that could target the critical 8300 level. 8606 and 8640 are resistance. 917 and 925 are resistance on the S&P, 905-907, 900 and 895 are support, and 873 is critical. The Nasdaq (fourth chart) must clear its August high at 1426.76. 1400, 1380 and 1370 are support.
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