Technical Analysis: Pullback

Stocks pulled back on lower volume today, and they were certainly due. While some test of the recent lows wouldn’t be out of the question, we’re not sure the market has the time to accomplish that here, with monthly inflows set to support the market later this week. The Nasdaq (first chart below) should have solid support at 2535 if its gets that low, and 2576, 2600 and 2631 are all tough resistance levels. The S&P (second chart) has support between 1452-1460, and 1480 and 1488 are important levels to the upside. The Dow (third chart) needs to clear 13,360 or so to break its downtrend, and 13,200 is important first support. Bond traders (fourth chart) don’t quite see stocks as attractive yet, so a little caution there.

Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association