Technical Analysis: Selling Nears An Extreme

Today was the third straight day of 80% downside volume on the NYSE; the only time we can recall seeing four straight was at the July 23, 2002 bottom. We also had another high equity put-call ratio reading today, and the new highs and lows are approaching bear market bottom levels. Now all we need is a turn. The Nasdaq (first chart below) broke its March lows of 1897-1900 today. Next support levels are 1880, 1840-1860, and 1822. Resistance is 1908, 1918-1922, 1930 and 1940. The S&P (second chart) also broke its March lows of 1087-1091. 1075-1080 is now critical support. Resistance is 1100 and 1107. The Dow (third chart) also broke its March low of 10,007, and took out its closing low of 10,048. That places a lot of pressure on the Transports (fourth chart), which would issue a Dow Theory sell signal if they close below their March closing low of 2750.8, according to Richard Moroney of Dow Theory Forecasts. The Dow faces resistance at 10,007, 10,048, 10,108 and 10,217-10,250, and support is 9850-9900.

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