Finally, a long-overdue bounce, but we’d note a couple of negatives today. First, upside volume was extremely unimpressive, with neither exchange registering 80% upside volume. Second, the chip index (first chart below) pierced a critical support today – 393.8, the top of the index’s first leg up off the October 2002 lows. With that “wave 1” violation, Elliott Wave theorists take the view that the index’s 15-month rally was corrective, meaning that new lows are likely on the index eventually. The Nasdaq (second chart) climbed back above its 200-week moving average today. Support is 1860, 1853, 1840-1842, and 1829, and resistance is 1883-1889 and 1894-1900. The S&P (third chart) has support at 1090 and 1084, and resistance is 1097, 1100 and 1106-1107. The Dow (fourth chart) has support at 10,000-10,008 and 9960, and resistance is 10,162 and 10,215-10,220.
