Technical Analysis: Downtrends Hold Sway

The Nasdaq (first chart below) once again failed to clear its downtrend line, which should be at about 2056 tomorrow. If the index can clear that line, 2079 and 2088-2095 are next. Support levels are 2027-2030, 2020, 2010 and 2000. The S&P (second chart) is also struggling at its downtrend line, which will be at about 1142 tomorrow, with 1147-1150 the next resistance levels above that. If that’s a bearish rising wedge forming on the S&P, it could retest the recent lows – which we’ve suggested is a possibility because of the poor internal condition of the market. Support levels are 1132 and 1126. The Dow (third chart) is another index that can’t take out its downtrend on a closing basis. Resistance is 10,500 and 10,570, and support is 10400-10,420 and 10,332. Thursday’s GDP report will likely be strong; it will be interesting to see if the report gets bought on its strength or sold on inflation fears.