Yahoo’s earnings didn’t provide the evidence of a strong recovery that investors were hoping for, setting up a good test for the market here. Every other bit of mixed news has been bought in this rally, so it will be interesting to see if the Yahoo news gets bought too. The Nasdaq (first two charts below) appears to be in a wave 5 up off the lows, and our best guess is that that pattern needs at least one more high to complete. If today’s low of 1735 holds, that would be a good sign that another high could be coming. Today’s high was just under the Nasdaq’s May 2002 high of 1759, a strong resistance level, and just above that is equally tough resistance in the 1770-1800 level. The Dow and S&P (third and fourth charts) must clear their recent highs of 9352 and 1015. Support is 9150 and 9108 on the Dow, and 998, 994 and 984 on the S&P.
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