Technical Analysis: Fear Stays High

So much for yesterday’s bounce being the start of something. However, a number of positives remain: the equity put-call ratio was very high at .95 today, the NYSE internals held up well, and the decline has seen no expansion of new lows. With tomorrow being the first of the month, we wouldn’t be surprised to see a pop here. On the downside, we still have last week’s bearish “three black crows” to cap any rally, and we have a market that has refused to rally after almost a week of oversold conditions – that suggests a trend change. The possible completion of five waves down on the daily charts suggests that the decline may resume after a rally. Support on the Nasdaq (first chart below) is 1776-1780 and 1757-1760, and resistance 1821-1824. On the S&P (second chart), support is 990 and 984, and resistance is 1000-1002, 1006, 1010 and 1015. The Dow (third chart) faces resistance at 9350-9380, and 9200 is support. The banks (fourth chart) have done an amazing job holding up under the circumstances; a plus for the bulls there.