Despite being oversold, the market has sliced through one support after another the last couple of days. The only positive is that the breakdown has occurred on lower volume, but that may well be the only one. The Nasdaq (first chart below) looks like it could hit 1273 before putting in a good bounce, duplicating the December decline from the mid-January high. Resistance is 1330 and 1350. The Dow and S&P (second and third charts) broke 8000 and 850 support today. The next strong supports are 7500 and 800, but the market could bounce before then. 7850, 7700 and 7600 are possible supports for the Dow. 8000-8050 and 8200-8250 are resistance. For the S&P, possible supports are 835 and 800, and resistance is 850 and 870-875. The VIX (fourth chart), the options volatility index, is in a strong uptrend and may not stop for a breather until it gets to 45-47. The equity-only put-call ratio is improving, closing at .78 today, but at this point we may need extreme readings in that sentiment indicator closer to 1.0.
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